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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:

    1. There are two pricing clusters of gTLD extensions (com, net, org, biz, info), dot-com being notably higher than the rest.

    2. Prices of adult domain names do not exhibit any significant price differences from comparable non-adult domain names.

    3. 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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