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Much of the risk associated with domains revolves around under what business model they were purchased under. For example, if I purchase a high value domain and I'm looking at building out a site then the investment is more in the business behind the domain rather than the domain itself.
 If I purchase a domain as a part of a large portfolio that I'm hoping to sell at a premium to end users then I'm adopting the stock sales business model. In fact, this is the model that both NameMedia and Dark Blue Sea have adopted for their large portfolios.
If a professional investors purchases a domain based upon a cashflow stream generated by PPC revenue then they will want to get a return not just today but tomorrow as well. This is predicated upon the premise that the purchased domain will have consistent revenue and traffic into the foreseeable future. What if it doesn't? This is the professional investors conundrum.
Let's expand the concept of risk a lot further. Remember that professional investors are unlikely to know about web logs, EPC rates, CTR or even how a domain is generating cash. What they are investing in is often a cashflow stream so let's examine the risk profile of two domains.
Domain A.com earns $10 per day and has been for the past 2 years. The traffic is consistent, it is not potentially trademark infringing. Domain B.com earns $70 on Sunday and then nothing the rest of the week. In fact, B.com doesn't have any traffic other than on Sunday and is not trademark infringing.
On average both of these domains earn the same and have exactly the same traffic and legal risk associated with them. From a pure investment perspective which one is riskier?
To answer this question we need to dig a little deeper. Let's imagine that A.com can earn its revenue ultimately from a Google, Yahoo and direct source. No matter what the source it seems to earn $10 per day. On the other hand B.com only earns its $70 per day from Google and nothing from Yahoo and direct sources.
Clearly if Google "falls out of love" with B.com then this is a much riskier investment than A.com which can maintain its revenue line from multiple sources.
Currently when domain portfolios are sold they are typically sold on last months stats and multiplied by some factor. These statistics are normally dumped out of one of the parking companies and sent onto a potential buyer. This then means that the domains are earning revenue from a single source and their capital value (ie. sale value) should be discounted accordingly.
In order to get a more accurate picture of a domains value a domainer would have to send traffic to multiple sources (many in fact) in real time and roughly at the same time to determine the true value of a domain at these varying monetisation streams. If this was done, then the domainer could then normalise the data, calculate the splits across the major monetisation feeds and then alter the risk profile for a domain for a potential buyer. This is a complicated way of justifying a higher price for type A.com domains for professional investors.
Not wanting to blow my own trumpet this is exactly what ParkLogic has done for many domainers that are earning greater than $5K per month. It means that domains that are managed by ParkLogic will potentially have a higher sale value as this type of information is now available to our customers.
For example, where in the past an A.com type domain may have been sold alongside a B.com domain for 2 years revenue domain owners will now be able to segment their portfolios on a risk basis. So that A.com domains sell for 4 years revenue while B.com domains may sell for 18 months.
From our perspective the name of the future game is creating a future mechanism that will allow and encourage professional investors to purchase domains just like the purchase securities. A key component of this is to provide a standard metric that can be used industry wide for assessing risk.
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