Domain names financial valuation

Domain names financial valuation

Domain names, like brands, are strategic intangible assets that ensure the positioning of your company in its market, strengthen its reputation, its brand image.

Companies are now implementing real strategic management of their domain names, usually associated with brand management. This management entails costs related to the deposit, renewal, monitoring and defense of these intangible assets. Thus, like brands, the financial valuation of domain names deserves to be integrated into the management strategy of these assets.

To do this, Finantis Value analyzes different criteria:

  • portfolio strategy, protection and defense of domain names
  • the semantics of the domain name, its meaning, its universal nature or not, its structure (in particular, ability to be memorized or understood without being spelled)
  • the geographical scope of the extension,
  • seniority,
  • its ranking when it is available (which is based on criteria such as referencing, links pointing the domain name, traffic data …)
  • the SEO performance on the basis of key words
  • the market addressed by the domain name and its relevance regarding this market,
  • the website’s analytical data, number of visits, site retention time, visitor acquisition flow, pages generating the most traffic, conversion rate, etc.
  • associated economic activity
  • possible interference
  • e-reputation

Finantis Value realizes, from these data, the financial valuation of domain names by adapting the methodologies used for the valuation of brands (ISO 10668 standard). If the domain name is identical to the name of a trademark, it cannot be dissociated from it. Its valuation will therefore necessarily be linked to that of the brand.

In other cases, three methods are particularly considered:

  • an approach based on historical or reconstitution costs: acquisition costs of the domain names, operating costs (renewal, associated services, SSL certificates, …), costs of protection and defense of associated rights.
  • a market-based approach relies on transactions carried out on trading places and / or comparable domain names.
  • a prospective approach related to income attributable to those assets

The value of a domain name is rarely reduced to that of its purchase price and renewal. In fact, the activity associated with the domain name has a direct influence on the value of the domain name.

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