Hi , tonight, I would like to introduce geo domains.
Before I start, I would like to mention that I am not a so-called "professional domainer". I have been buying domains as a hobby since 2002 (my first domain was granulomata.com, which has since being dropped). I am more of a domain collector than a flipper. I rarey sell (when I do, I sell big). I mostly buy.
I have been reading DNJournal (
http://www.dnjournal.com ) / following Sedo sales and noticed that many of the so-called geo domains are usually sold for a lot of money. For example Melbourne.com was sold for 700K USD a few years ago.
However, what really inspired me was the story of the Castello Brothers (Michael and David Castello). These 2 brothers build at city domain network (
http://www.ccin.com). Their marquee geo website is
http://www.palmspirings.com . According to them , they make over a million USD /year from adverstiser money. This basically gave me the motivation to research into the world of geo domains.
What are GEO domains?
Geo domains are basically domain names that are describing a geographic region. It can be a city, country, state, province or region. The extension of the domain don't matter (can be .com .net .org. us. .info .tw....etc).
Pure geo domain refers to a geo domain that only has the name of the location without any add-on. An example would be Osaka.com . On the on contrary OsakaCars.com is NOT a pure geo. There should be no extra noun or descriptive words in the domain.
Geo+Keyword domain refers to a Location+Keyword domain. Example is TaipeiRestaurants.com . TAIPEI is the geo , RESTAURANTS is the keyword
Why are geo domains so valuable?
Geo domains is a BRAND. They describe a city. They are like virtual real estate, in the literal sense. Domainers call every domain a virtual real estate, however, geo domains are real estate literally. They describe the country, city, state people live in. The whole city is BRANDING the domain for you. The more vibrant the city, the less work you have to do to brand your geo . For most other domains, they need a physical product before marketing the website, Geo domains don't.
For example, if you are the owner of CarsForSale.com , you will need to have cars before you can start promoting the website and generate revenue. Same thing for Flowers.com. You need to have flowers as a product to promote the site.
However, in geo domains, the city/people/industries are your products. The more vibrant the city, the better your product is. The only thing that is required is to have a decent website, SEO and finding the advertisers.
How to evaluate a geo domain?
Geo domains value are based on many factors, but here are some of the common ones:
1. Population size
- Without considering other factors, the bigger the population of a city, the more valuable the geo domain is. It means you have a bigger audience to what you put on your website. A simplified rule of the value of a pure geo .com domain is 10 USD cents / person. So a city with a population of 10,000, the .com domain will be worth 1000 USD. For a population of 100,000, the domain will be 10K USD. Of course, this is an over-simplified formula.
2. Features of the city
- The number of tourists/ year visiting the city, how many different local industries, the average income of the household, any cultural / historical significance are all important factors taken into consideration when evaluating a city.
3. Extension of the domain
- Needless to say, .com is king. Followed by .net and then .org. For specific countries, the country extension might be more valuable than .net or .org. For example, Osaka.jp is more valuble , my opinion, than both osaka.net and osaka.org. However, Osaka.com is still by far the most valuable.
4. Pure geo vs geo+keyword
- Pure geo (Taipei.com) is always more valuable than geo+other words (TaipeiPlumbers.com). Pure geo .com is the ultimate representaion / electronic billboard for the city.
How much are geo domains worth?
For the sake of this article, I am only going to discuss about pure geo .com value.
On average , for a city with a population of 10K~20K, I think we are looking at mid X,XXX . In my opinion, these geo domains are not worth buying unless you live locally and plan to develop them.
For a city with population between 20K-50K, the price can be expected to be 10,000 USD +. These cities usually have more industries.
When you are talking about cities with population of 50K ~100K, then the value of geo grow exponentially. I would think a .com of these cities will generally be worth 30,000~80,000 USD.
Finally, when we talk about a major city such as Sydney, Chicago, Taipei, we are talking six figures. To put into perspective, Melbourne (Australia) has a population of 4.14 millon. Melbourne.com was sold for 700,000 USD in 2007.
How to make money from a geo domain?
Whatever you do,
DO NOT PARK A PURE GEO .COM !
Parking is the most inefficient and wasteful way to utilise a pure geo .com domain. For example, look at
Germany.com.... what a wasteful thing.
The way to monetize a geo is DEVELOPMENT.
The source of income is from advertisers, especially hotel / restaruants. Imagine this, the average going rate for a banner on a website is 1000 USD / month (for a medium sized city). If you get 10 local hotels to be your advertisers, that is 1000x10=10,000 USD/ months of revenue.
However, for you to get advertisers, you must do the hardwork. It means putting unique local contents on the website + calling up/meeting local businesses and let them know about the benefit of the large audience their businesses can reach by advertising on your website.
In conclusion, pure geo .com domains, when proper development and maintainence and marketing are done (which is very very hardwork), can be considered as 100% profitable / no risk domains. They are in the same class as keyword .com domains (flowers.com , pets.com , cars.com )except pure geo .com do not need a product to be successful. The city itself is your product. The key to GEOs is
DEVELOPMENT.
For more information , please visit the following links and read the interviews:
http://dnjournal.com/cover/2006/december.htm
http://www.chefpatrick.com/developin...domain-part-1/
http://www.chefpatrick.com/developin...domain-part-2/
http://www.chefpatrick.com/developin...domain-part-3/
http://www.chefpatrick.com/developin...domain-part-4/
http://www.chefpatrick.com/developin...domain-part-5/
http://www.domainsherpa.com/fred-mer...net-interview/
http://www.domainsherpa.com/toby-har...era-interview/
http://www.domainsherpa.com/michael-...cin-interview/
http://www.domainsherpa.com/david-ca...cin-interview/