This is my second post about the great domain name data coming from DomainsBot (see Post 1). This post concerns the study of value of domain names in the secondary (for-sale) market. (Disclosure: I am Chairman of the Board of Directors of DomainsBot.)

It has long been thought that the shorter the domain name, the more it is worth. Wrong. One surprising result is that resale value actually increases as the name gets longer for one- and two-keyword domain names, up to a point.

Here is the full DomainsBot Investigation #1, with lots of graphs and full explanations. Below is a synopsis of the results.

Summary

We examined 4304 domains containing up to 3 keywords sold on AfterNIC from January 2003 to September 2005.

We decided to test two truisms about the value of domain names:

1. Is shorter better?
2. Are fewer keywords better than more?

Conclusions

• The proposition that fewer keywords and fewer number of characters mean more valuable domain names is generally upheld, but there are surprising and significant exceptions
• Value is significantly affected by whether a domain name contains “lexical” components (or “real” words”), or “short” (non-grammatical) components
• The importance of “lexical” component grows as the number of keywords grows
• Two-character domain names are exceptionally valuable
• One-keyword domain names longer than 2 characters gain in value as the grow longer, up to about 8 characters; the top domains of this area are “lexical” names made of two or three syllables
• Two-keyword domain names gain in value as they grow longer, up to about 11 characters, then descend in value
• One-keyword domain names are worth on average about 3 times more than 2-keyword domain names, and 4.5 times more than 3-keyword domain names

Posted by Antony in: Domains