Buying and Selling a Traffic Portfolio - Part 6

In the previous five parts in this series I’ve covered a lot of ground on how to better buy and sell a domain traffic portfolio. In this article I’m going to expand upon the “Domain Risk Index” (DRI) which is a tool that helps you make better buying and selling decisions.

We developed the DRI as a domain and portfolio analysis tool a number of years ago for ParkLogic clients. In summary, the Domain Risk Index (DRI) mashes together about twenty different metrics to produce an index between 0 and 100. Zero represents HIGH risk investment and 100 is a NO risk investment.

The various metrics are weighted according to their impact on an investment’s return. Investors are typically interested in stable returns and the index allows them to gauge the amount of risk that they would like to take on.

What we then did was take a large sample of domains that statistically represents the Domain Industry and graph the results on a chart over time (orange line above). The blue line represents the ParkLogic account owner’s performance on the scale.

Domain Risk Index

As can be seen from the sample chart there was a surge in stability at the beginning of October that has now tapered off into a time of instability. This needs to be viewed in light of the fact that the peaks and troughs are from 54 to 58 on the scale.

So what’s the point in all of this? Let’s image that you have a portfolio of domains that you are wanting to sell that is around 80 on the scale. This means that from an investment perspective it is MUCH less risky compared to the typical industry portfolio. This then logically translates into you being able to ask more money for your portfolio than the typical industry sale.

For example, if the industry is typically selling a portfolio for 2 years revenue then you now have a justification for why you should be asking 3-4 years revenue. It’s playing the capital value game with good solid independent metrics behind it that gives both the buyer and the seller that they are getting a good deal.

So what else can you view as a part of the DRI? We also provided some of the additional metrics that make up the DRI. For example, if you would like to see what is happening on EPC trends for the industry versus your account then it’s a button click away (see below).

For the trend graphs, anything above 50 means there is an upward trend anything below 50 means it’s trending downwards. The higher above 50 that greater the increases in the trend and reverse is true if the chart is well below 50.

EPC Trend

As can be seen from the EPC trend chart there was a surge in higher paying EPC rates at the end of October that is likely due to the rush up until Christmas. What’s interesting is that this sample portfolio did not experience the same impact (blue line).

What’s great news for domain owners is that the CTR trend also increased at the same time and as can be seen from the chart the domain owner experienced an uplift in CTR.

CTR Trend


By using some of these charts a buyer can purchase portfolios when the trend lines are down and sell when they are high. This is similar to what many of us do with our stocks. Buy low, sell high.

There’s a lot of information tied up with DRI and its charts. Further information on the definitions is available under the DRI Terms and Definitions link below the chart.

Over the years we’ve found that buyers and sellers that use tools like the DRI have an informational advantage over others in the market. This allows them to make smarter selling and purchasing decisions and take advantages of the fluctuations in pricing.


Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.
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