The value of .co.uk compared with the same in .com

[wb]

Hi all,

Found a couple of reasonably priced keyword domains recently, which have sold for pretty decent figures in the .com variations (they are not USA/international specific, so the higher price is not from that).

I realise that it does depend on demand, however as an approximate percentage or from anyones experience, what is the value of a .co.uk domain when a .com has sold for a certain amount?

Think I have made it clear, however if not...

.com sells for $2000
.co.uk is worth say 50% of that = $1000?

Thanks

 

[crabfoot]

Putting accountant head on ... achieved.

Rationally, it depends on keyword search values. Search volumes should give an estimate of expected revenue, so they should give a comparative evaluation.

So, go to keyword tool, search key words on exact, location US, and exact, location UK.

Example keywords: penetrating oil

Exact searches for US in October, 1900

Exact searches for UK in October, 720

Assume .com sells for $2k, and that the selling price represents about 14 months expected income.

Ratio will give a price of 2000 * 720 /1900 = $758 for the co.uk

But that is very simplistic - penetrating oil is used to free siezed metal parts mostly, but also refers to oil used to preserve garden furniture. Whatever, it gives an idea.

Other keywords can vary widely, because UK/US usage differs.
For example, an American does not use a fishing rod. He uses a fishing pole. An Englishman always uses a rod for fishing, but he might also use a pole in specific situations (in UK fishing, a pole is used without a reel for catching small fish).

Durex means Sellotape in Australia, Scotch tape in US - if you know what I mean.

You need to know that terms are exactly equivalent before you can use the approach.

 

[wb]

Ah completely forgot about getting a comparison by using the keyword tool!

All makes sense to me - thanks

 

[crabfoot]

Can't get the accounting head off -

The population ratio will not work. Search volume will always be proportionately less for the larger population.

This is because it can be economically viable to provide a service to a large population with a common language, when a small population will not sustain a business, and it is necessary to trade in another language to maintain that business.

So small businesses in US have historically survived by additional mail order trade, when similar businesses in UK and Europe have died because they have satisfied their sources of demand. Dead businesses increase the need to search, "paper" advertising decreases the need to search.

Thus, the ratio "Search volume / population" will always be lower for a large nation, compared to a smaller nation.

There will be linguistic links - Canadians are likely to find US suppliers for searched items, Austrians will similarly find German suppliers. And vice versa - I know of a couple of Canadian businesses that have been going for years because they trade into the US, when similar US concerns have gone to the wall.

Conversely, Scandinavians and people from the Low Countries are likely to find suppliers in English-speaking markets, because of the high proportion of people who speak English as a second language.

 

[getmein]

I don't think there's a reliable percentage, because even when you have the same keywords that have sold in .com and .co.uk e.g. software ($3.2 mil Vs $250k) - they rarely sell at the same time (2005 V 2009). Added to which, each transaction is unique - and no percentage can reflect the motivation (or lack of) of buyers and sellers to transact at a level.

I think the only general observation I'd make is that the % discount of .co.uk to .com tends to grow at the top end.

 

[retired_member12]

Perhaps Sedo might be best placed to post some statistics.

 

[retired_member13]

Some reasons why values differ

I'd have said that when it comes to a comparable domain, .co.uk generally achieves between 1/20 and 1/6 (or circa 5%-15%) or the value of .com, for the following reasons IMO:

• The .com market is far more developed (or further down the path of being integrated into the economic model in the US), so the competition for .com domains is correspondingly higher. This is demonstrated by the fact that there are roughly 8 million .co.uks registered, versus 80 millions .coms, so there is far less chance of being able to hand register a meaningful .com.

• The .com market is structured in such a way that it has more opportunities to establish market value. In the US every expiring domain is published by the registry, with a time and date that it will be deleted, and pretty much every decent name goes to auction. In the uk market the zone file is closed, and there is no real established market for expiring .co.uk domains, so the .co.uk market does not have that constant drip feed of sold prices for expiring names to help set markers for price. It's also worth noting that a lot of top end sales in the domain world are never publicised, so public sales figures (like those from expiring auctions) are doubly crucial, as it's one of the few times that the big players are forced to show their hands.

• .com domains have a larger potential market, and no-one would dispute that .com domains get far more type in traffic on average than ccTLDs. This makes them easier to monetise with domain parking - therefore making it easier for owners to hold huge portfolios of names that are self financing without the same pressure to sell. This is especially true for informational domains where the only transaction required is for the visitor to click on an advert, so having type in traffic for "average" domains is a huge advantage in the .com world (even though many commentators estimate that a large percentage of this traffic is actually down to domainers).

• Until recently .com domains have been far easier to transfer to new owners, which created a far more active market at the bottom end of the market, and like the housing market, it is the money that filters in at the bottom of a market that ultimately finances the big ticket sales at the top end. This really held back the secondary market for UK names.

• There is a larger pool of domain investors for .com names, and as many members here will have experienced first hand, many of the best prices are achieved when 2 or more potential buyers are heavily emotionally invested in buying a particular name at auction or in a closed bid situation. At present there isn't really the volume of serious buyers needed for this to happen regularly in the .co.uk market.

• .co.uk as a trading market lacks the publicity of .com - look at the number of blogs focussed on active domaining from a .com perspective versus .co.uk

• American investors tend to be both more risk minded & more open to new investment vehicles, and this is enhanced by the fact that .com names present a more obvious immediate ROI due to some of the points listed above.

Anyway, I could keep going as there are loads of other contributing factors, but I'll leave it there for the minute before this turns into a book..

One thing I do think is that .co.uk shows a lot of promise for investment over the next few years, and all of the above points count in favour for anyone looking to establish a decent UK portfolio in the current market climate.