--- title: "Premium Domain Names Evolving Into An Asset Class" description: "Why premium domain names are hard to value, why they are scarce and undervalued, and what is holding them back from becoming a recognized asset class." url: https://gritbrokerage.preview.multisites.ai/post/premium-domain-names-evolving-into-an-asset-class publisher: Grit Brokerage contact: https://gritbrokerage.preview.multisites.ai/contact offer: https://gritbrokerage.preview.multisites.ai/inquiry --- [Market insights](https://gritbrokerage.preview.multisites.ai/blog?topic=market-insights) # Premium Domain Names Evolving Into An Asset Class Michael Law argues premium domains are scarce, undervalued and still not a formal asset class. Appraisals can be off by orders of magnitude, and there is no Kelley Blue Book for domains. He cites education and liquidity as the two barriers and expects prices to keep rising. By Grit BrokerageOct 8, 20203 min read ![Premium domain names shown as a digital asset class like real estate](https://gritbrokerage.preview.multisites.ai/_astro/a53ed9_54d43a7124ba48e088c658e661c88cda.DVSIEcMq_1dTVNE.webp) Premium domain names are extremely valuable (if you’re not sure what qualifies as ‘premium’ see the first part of [this blog post](https://gritbrokerage.preview.multisites.ai/post/why-prices-of-premium-domain-names-will-continue-to-appreciate)). However, unlike most other assets, it is extremely difficult to put a specific value on any domain name as each and every one is truly unique and the price can only be determined based on what a potential buyer is willing to pay combined with what the domain owner will sell for at that specific time. While there are appraisal tools for domains, they can be wildly inaccurate and off by orders of magnitude. There is no _Kelley Blue Book_ for domain names like there is for cars. Even the most experienced domain investors and brokers oftentimes appraise the same domain name far differently based on their interpretation of the word/string of words and how they perceive it possibly being used. While being very difficult to appraise, premium domains are also perhaps the most scarce and undervalued assets in the world today. Domain names are the base layer, the underlying foundation upon which the entire Internet is built. It is true that there is an unlimited number of domain possibilities mixing different letters, numbers and length. But again, we are talking about premium names that have been registered for many years that dozens if not hundreds of businesses would prefer to have over their current domain. For example, my first name is Michael and even when I got into this business over a decade ago Michael.com was not available to register (it was registered in 1994). There will only ever be one Michael.com and it just so happens to be in possession of a company called MicroStrategy, the same company that sold Voice.com for $30,000,000 last year. The CEO of MicroStrategy is also named Michael (Saylor) and he was just recently on [an episode of DomainSherpa](https://www.domainsherpa.com/saylor/) discussing domain valuation. Saylor was reluctant to even sell Voice.com for the $30M because in his words “A great domain name, in the .com English sphere is like having clear ownership forever of one or more city blocks in Manhattan built on granite.” Why aren’t domains their own asset class already? Okay so premium domain names are selling for hundreds of thousands of dollars to millions of dollars on a daily basis..they are their own asset class now, right? Not quite. From my perspective, two factors stand out and they are correlated. 1. Education - most business executives today still do not realize how significant of an impact utilizing the exact brand matching .com will make for their business. If your company domain name does not exactly match your company’s brand you are fighting an uphill battle by having to spend more on advertising to rank in search engines, leaking traffic and emails to the domain you should be using along with many other problems. Slowly but surely times are changing and we are observing and helping many companies upgrade to that perfect domain. As domain brokers representing some of the top domains in the world it is still a struggle and mind boggling at times to understand why it is so difficult to convince massive companies to acquire the generic domain that matches their brand name. 2. Liquidity - looking at the major asset classes of today (stocks, real estate, precious metals, etc) they all have one thing in common, which is that you know exactly what each asset is worth in $dollar value. While the uniqueness of domains makes it almost impossible to put an exact value on each one, we can see the tide rising and lifting all boats. Resale and auction prices for premium domains are increasing almost daily and we are seeing savvy investors spending more on domains than ever before. Digitalization of the economy has been pushed into overdrive this year and there are a lot of technologies being developed that will continue to help educate the world on the true value of an asset as useful as a premium domain. We are getting there. There is no doubt in my mind that premium domain names will continue to appreciate until they have carved out enough of a slice of the economic pie that they will be seen as their own asset class. As this happens, there is huge upside for those individuals and companies that have the foresight to acquire these digital assets, and a lot of opportunities left behind for those that don’t. ! ## Questions this post answers ### Why is it hard to value a domain name? Each domain is unique, and its price depends on what a buyer will pay and what the owner will accept at that time. The post says appraisal tools can be wildly inaccurate, off by orders of magnitude, and there is no Kelley Blue Book for domain names. ### Why are premium domains not yet an asset class? The post names two correlated factors. Education: many executives do not see the impact of an exact brand matching .com. Liquidity: unlike stocks or real estate, a domain has no exact dollar value, though resale and auction prices are rising almost daily. ### What did the MicroStrategy CEO say about Voice.com? MicroStrategy sold Voice.com for $30,000,000 the previous year. CEO Michael Saylor, on DomainSherpa, said a great .com English domain is like having clear ownership forever of one or more city blocks in Manhattan built on granite. ### What happens if a domain does not match the brand? The post says the company fights an uphill battle. It must spend more on advertising to rank in search engines and may leak traffic and emails to the domain it should be using. ## Terms in this post - [Generic domain](https://gritbrokerage.preview.multisites.ai/glossary/generic-domain) - [Premium domain](https://gritbrokerage.preview.multisites.ai/glossary/premium-domain) - [Domain name](https://gritbrokerage.preview.multisites.ai/glossary/domain-name) - [Brand name](https://gritbrokerage.preview.multisites.ai/glossary/brand-name) - [Liquidity](https://gritbrokerage.preview.multisites.ai/glossary/liquidity) - [.com](https://gritbrokerage.preview.multisites.ai/glossary/dot-com) ## Keep reading - [Digital Assets - Domains, NFT’s, Hype & ValuationThis post compares NFT art with premium domain names as scarce digital assets. Beeple's Everyday sold for $69 million at Christie's, while the highest recorded domain sale, Voice.com at $30 million, is less than half of that. Grit Brokerage argues domains offer lifetime utility and remain undervalued.](https://gritbrokerage.preview.multisites.ai/post/digital-assets-domains-nft-s-hype-valuation) - [Why Prices of Premium Domain Names Will Continue to AppreciateGrit Brokerage defines premium domains and gives three reasons prices should keep rising: more people and business moving online, a growing pool of investors paying more, and scarcity, with registered domains near 400 million. It also sees short term opportunities for buyers with cash during economic uncertainty.](https://gritbrokerage.preview.multisites.ai/post/why-prices-of-premium-domain-names-will-continue-to-appreciate) - [How Much Is My Domain Worth? Domain Valuation ExplainedA domain is worth what a specific buyer will pay for it. Start with comparable sales of similar names, then adjust for length, extension, keywords, and brand fit. Treat automated appraisals as rough guides. The same name can be worth far more to an end user than to an investor.](https://gritbrokerage.preview.multisites.ai/guides/domain-name-valuation) - [12 Case Studies - Founders Discuss How and Why they Acquired a Better Domain Name for their BrandThis post collects public interviews with founders and executives who acquired a better domain for their brand. Cases include DataRecovery.com for $1,660,000, Ring.com for $1,000,000 in 2016 and Voice.com for $30,000,000 in 2019. Grit Brokerage says the companies it sold premium domains to call the move one of their best decisions.](https://gritbrokerage.preview.multisites.ai/post/12-case-studies-founders-discuss-how-and-why-they-acquired-a-better-domain-name-for-their-brand) - [33 Domain Name Upgrades & Acquisitions in 2021This post lists 33 domains that changed hands in the first half of 2021, mostly one word .COMs bought as upgrades from two word names or other extensions. Disclosed prices include Angel.com at $2,000,000 and iBox.com at $1,560,000. Grit Brokerage says it brokered more than 15 one word .coms since January 1.](https://gritbrokerage.preview.multisites.ai/post/33-domain-name-upgrades-acquisitions-in-2021) - [Domain Assets - Shifting End User PerspectiveDomain broker Michael Law explains how Grit Brokerage responds when buyers say a premium domain does not fit their budget. The post argues a premium domain is an appreciating asset with lifetime utility, SEO, security and brand alignment, not a recurring expense like a web hosting bill.](https://gritbrokerage.preview.multisites.ai/post/domain-assets-shifting-end-user-perspective) ## Buying or selling a domain? Call, text or email. Responsiveness is our trademark, and a broker answers, not a form robot. [Talk to a broker](https://gritbrokerage.preview.multisites.ai/contact) [Call (442) 500-GRIT](tel:+1-442-500-4748)