Studies & Opinions
Dot-com
Is King with No “Adult Effect”!
Alex
Tajirian
January 14, 2004
A first-of-its-kind comprehensive statistical
study of domain-name prices by DomainMart revealed three significant
findings:
-
There are two pricing clusters of gTLD extensions (com, net,
org, biz, info), dot-com being notably higher than the rest.
-
Prices of adult domain names do not exhibit any significant
price differences from comparable non-adult domain names.
-
The length of a domain name is not a significant predictor
of its value.
Using robust statistical techniques, we found
that dot-com prices are significantly higher than comparable names
with other gTLD extensions. This is not unexpected, but it represents
the first time that such a finding was confirmed by scientific statistical
analysis. Although we did not detect significant price differences
among the other extensions, this does not mean that all comparable
names with various extensions are equally valued. One possible explanation
of the lack of price variations is the paucity of data on other
extensions, making it difficult to statistically discriminate among
them. As more sale data become available, we will be able to further
refine the valuation model.
We did not find any pricing
differences between adult and non-adult comparable domain names.
Moreover, the findings were robust to various measures of “adult.”
This was a pleasant result as it suggests rationality in domain-name
markets, reliability of price data, and robustness of our appraisal
model. It would have been hard to justify, for example, a premium
for adult domain names while controlling for other significant factors
that influence price. Thus, we conclude that there is no “adult
effect” associated with domain-name prices.
The study confirmed anew
that the length of a domain name is not significant in determining
its price.
For more details on pricing
domain names, see Pricing
Of Domain Extensions.
Topic tags: appraisal/valuation
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