The Unemployed Alcoholic Blog

Domain name valuation will remain one of most controversial topics in the internet business for years to come. Today’s question is whether Sumo.com is worth 150 thousand USD. The most obvious answer is YES, because that’s what someone just paid for it on Sedo. However, it is interesting to me to try to figure out WHY someone would pay such a price for this one. At first site (haha funny! I bet I’m the first person to say that!), it would seem that the buyer overpaid, but let’s look further.

Let’s start with the basics. “Sumo” is a CVCV that’s fairly easy to type in on my keyboard. It could work as an abbreviation for a four-word company name, or it could be a category website related to the sumo style of wrestling.

Let’s further assume that the proposed site will be one that’s related to the sport. Where could commercial value come from? A purely informational site with ads would not make enough money to cover such a large up-front expense. Hence, some sort of product or service must be offered on the website. Sumo equipment? Possibly. Sumo lessons? Perhaps. Could it be a wealthy sumo gym/club owner trying to cement a solid brand identity for his establishment, possibly franchise his business nationwide? I really have no idea… We start running into problems when we consider the potential audience. The sport is most popular in Asia, and is only practiced professionally in Japan (according to Wikipedia), a country of some 130 million people (not very much on the GLOBAL scale). Sumo is not an Olympic sport either. Will the acquisition be worth it in the long run? If I knew who the end-user is, perhaps I could have a better idea about this one…

Lastly, we must remember that sports domains ARE indeed some of the most sought-after on the internet. Live Current / Communicate.com, for example, turned down a $6M offer for domain Cricket.com, which is yet to be developed. Of course, the prospective audience for this one is much greater than for sumo.com, but so it seem is the difference in perceived value.

So, is sumo.com really worth $150k? If I had an extra 150k laying around, I probably would not take it. But I am clearly not the guy that’s about to start a nationwide franchise of sumo gyms and stores in Japan. If such a guy does exist, he would be at the top of my list of “Likely to gain the most value from owning sumo.com”

There are always multiple ways of looking at things, and usually good arguments can be made to support several side of every story… The market will prove you right or wrong. The market is the ultimate authority.