What is being valued, and as of when
Two questions come before any number, and getting either wrong makes the rest of the work irrelevant.
What is the asset? A domain name on its own is not a developed website, not a business, and not a trademark. A valuation of the string, a valuation of the string plus the traffic it carries, and a valuation of an operating site sitting on it are three different exercises with three different data requirements. The report says which one it is doing.
As of when? The valuation date is the controlling date, and it is set by the legal theory rather than by the expert. Registration date, transfer date, date of loss, date of trial — each produces a different comparable set, because the resale market moves. Which date governs is a question for counsel, and an expert who picks one without asking has made a legal decision in the middle of a technical report.
One editorial note about this page. It publishes no prices, no ranges and no rates. Reported sale figures go stale the day they are published, and a number quoted on a static page becomes a liability in cross-examination. What follows is structural: the approaches, the data sources, the adjustments and the limits.
Three approaches, and why one dominates
Valuation of an intangible asset is conventionally organized into market, income and cost approaches. In the United States the national standards for how appraisals are performed and reported are the Uniform Standards of Professional Appraisal Practice, published by The Appraisal Foundation, which extend beyond real property to personal property and business valuation. Whether and how those standards apply to a domain name in a given matter is context-dependent and a question for counsel rather than something to assert on a web page.
Market approach — comparable sales. The dominant method for domains. The expert assembles arm's-length transactions in names sharing the attributes that drive price, then adjusts for the differences that remain.
Income approach. Where the name carries traffic or produces revenue — advertising, affiliate, lead value, or the cost of buying equivalent traffic through paid search — it can be valued off that cash flow. This inherits every limitation of the underlying traffic evidence, which is a substantial inheritance.
Cost approach. Rarely determinative, because reproduction cost bears no relation to value for a name whose scarcity is the point. It has a narrow role in the carrying cost of a portfolio or a defensive registration program.
The attributes a comparable has to hold constant
A comparable is only comparable in the attributes that actually move price. The ones that have to be identified, held constant where possible, and adjusted for where not:
- Extension. Different extensions do not trade at parity. A comparable in another extension is a different asset class, not a discount.
- Length and construction — character count, and whether the string is a single dictionary word, a two-word phrase, an acronym, a numeric string or invented.
- Language and market. A term with commercial meaning in one language may have none in another.
- Commercial category, and the advertising economics of that industry.
- Hyphens, digits and plurals — each typically a discount factor.
- Existing traffic, revenue, links, age and prior development.
- Encumbrance. A name that reproduces a third party's mark is not freely saleable, and a valuation that ignores that values an asset the seller cannot lawfully deliver. In a trademark matter this is frequently the whole dispute rather than a footnote.
- Date of the comparable, adjusted to the valuation date.
The excluded rows matter as much as the included ones. A defensible comparable table records what was rejected and why, because that is the first thing an opposing expert will reconstruct.
Asking price, reported sale, appraisal: three different things
These get conflated constantly, including in reports, and separating them is most of what makes a valuation credible.
An asking price is a number one party published. It is evidence of what a seller wanted. It is not a transaction and it is not a market clearing price. Listed prices, make-offer landers and lapsed listings are not sales, and mixing them into a sales table contaminates the whole exhibit.
A reported sale is a transaction someone disclosed to a publisher. It is closer to evidence, and it carries the disclosure's own reliability problem. Public sales databases in this field state their own limits plainly: one long-running published sales chart describes its lists as the highest-value cash sales reported to the publisher, expressly not a complete record, because many sales are kept private at the insistence of buyers, sellers or both (DNJournal). Another widely used database accepts user-submitted sales and states that accuracy is not guaranteed.
An appraisal is an opinion of value, reasoned from data, by someone who will state and defend the method under examination. Only the third of these is a valuation.
Automated appraisal tools are not a valuation opinion
Say it plainly, because the tools are free, instant and frequently attached to demand letters: an automated domain appraisal is an algorithmic estimate, not an opinion of value, and it cannot carry a valuation in a contested proceeding. The problems are structural and are the same for every tool in the category.
- The model is undisclosed. Features, weights and training data are proprietary. The expert cannot state the method and the other side cannot test it — which is the reliability question a court asks about expert opinion in the first place.
- The training data has the same coverage gaps as the public sales record. Private sales are absent by definition.
- The output is not reproducible over time. Re-run it later and the number changes, with no changelog explaining why.
- The tool cannot see what matters here — the encumbrance, the traffic, the revenue, the litigation posture, or the valuation date.
- The vendor is often a marketplace participant that earns commission on sales, which is an interest in the number.
An automated estimate can properly appear in a report as a data point about what a public tool reported on a stated date, with its stated basis. It cannot be the conclusion, and presenting it as one invites exactly the cross-examination it deserves.
Income, encumbrance, and portfolios
Where the income approach is used, it stands or falls on the traffic and revenue evidence beneath it, and that evidence has well-documented limits — referrer loss, residual attribution buckets, platform data retention windows, thresholding of low-volume data. A name whose income is asserted from a traffic estimation service rather than from logs or account records has an estimate resting on a model, and the report should say so.
The monetization channel is itself a technical question with a documentary answer. Published measurement work found that most crawled typo domains monetized through pay-per-click advertising, with revenue concentrated across a small number of advertising partner identifiers. That identifier is both linkage evidence and, where account records are produced, revenue evidence.
Encumbrance. Where a name reproduces someone else's mark, comparables drawn from unencumbered names overstate, sometimes dramatically. The clean-market comparison values something the holder may not be able to deliver.
Portfolios are not the sum of their parts. Bulk disposal realizes less per name than individual sale over time. A portfolio valuation that sums retail estimates for each name is not a portfolio valuation; it is a list with a total at the bottom.
What a domain valuation cannot establish
Comparable-sales thinness is the central problem, and it is not solved by looking harder. Domains are heterogeneous. For any specific name, the set of genuinely comparable arm's-length sales is often small, sometimes empty and frequently stale. An expert who cannot find close comparables should say so rather than reach for distant ones and adjust his way across the gap.
- The public sales record is a selected sample, not the market. Private sales are absent by design, and what is visible skews toward what a seller or venue chose to publicize.
- Reported prices are not verified transactions. A reported figure may be gross or net of commission, may bundle assets beyond the name, may be an installment total, or may have been reported to establish a market.
- Related-party and wash transactions set no market price.
- Currency, date and commission adjustments are routinely omitted and materially change a result.
- No published standard prescribes a recency window for comparables in this asset class, so the window used is stated and justified rather than assumed.
- A value opinion is not a damages figure. What a party is owed is not the expert's statement to make.
What the report contains, and what a retaining attorney should expect
The report carries: the definition of value and the valuation date; the approaches considered and the approaches rejected, with reasons; the comparable set as a table, each row with its source, date, venue and verification status, including the rows excluded and why; the adjustment schedule, shown rather than described; the income analysis with its inputs where the data supports one; a reconciliation of the approaches rather than an average of them; and a limiting-conditions section written before the conclusion, not after it.
Behind it sit the primary records: escrow or marketplace transaction records, which are the only category in which a completed sale is substantiated by an underlying document rather than by a report of one; registrar transfer records; traffic and revenue data; and the registration and archive history establishing the name's own past. Those primary records generally arrive by subpoena or by a party's production, not by browsing.
US-specific: the opinion is governed by FRE 702 as amended effective 1 December 2023 and FRE 703 on the bases of an opinion; aggregator pages are authenticated as what they are, a page published on a date, rather than as proof a transaction occurred. Bill Hartzer has testified in domain-related legal cases and has provided expert witness reports in others, and has worked in this field since 1996; the current record is at hartzer.com.