YP.com was acquired by AT&T for about $3.85 Million in cash according to BusinessWire.com.  AT&T got a real deal here.  First, yp.com will be of value for mobile searches, will give SEO benefits to YellowPages.com, and most of all eliminate a competitor.

Matt Panella of Domain News comments that Alexa rankings of 70,000 implies for traffic figures of 1,000 to 3,000 visits per day.  Alexa is notoriously wrong on statistics due to self-selection bias, limited browser reach etc (for some discussions see: http://spottedwalrus.com/articles/79/the-alexa-issue-a-problem-a-solution/, http://paulstamatiou.com/2007/03/07/why-you-should-completely-ignore-alexa-stats,  http://slashdot.org/article.pl?sid=07/07/23/152243 ).  

While I do not have access to YP.com’s traffic statistics, a traffic rank of 120,000 can get more than 100,000 searches per day and multiple times that in page views.  That is a fact.  No doubt Matt is using what information he has available, but considering it is Alexa, take it with a pound of salt. 

For example, Halloween.com had an Alexa ranking of around 52000 in October 2008. Traffic logs show many orders of magnitude over the “implied” traffic of 5000 visitors. Let me repeat that traffic implied by Alexa is off by many orders of magnitude. Another site with a traffic rank of in the 120,000 range gets 2 to 3 orders of magnitude more traffic per day than Alexa reports.  Remember two orders of magnitude means 100 times what is shown.  

So what is the point?  The point is that basing a domain price on Alexa statistics is a bad idea because the data is just not that good.  Alexa may be good for comparisons between like sites with similar demographics, but not absolute numbers.  If you are selling a domain based on Alexa traffic estimates you are probably getting taken to the cleaners.  If you are buying based on Alexa traffic statistics, you may be getting a good deal.

Likewise, anyone selling a domain name solely off of current traffic statistics is missing the boat.  When I sold Movie.com (or Miami.com or Casino.com or Gamble.com or Honeymoon.com or Flying.com or Racing.com or hotel.com or reservations.com or reservation.com etc.), I didn’t sell it based on traffic, that would have been the height of stupidity.  Domains – particularly one word, easily brandable domains – are priced based on what can be done with the name.  It would be like selling a vacant lot at the corner of a busy intersection based on the number of people who come to it instead of basing the price on the the potential traffic.  A lot on the ocean in Palm Beach (even with the current real estate mess) is a lot more valuable than a lot at the corner of Tomahawk Rd and Route 187 in McNary Arizona.  Nothing against McNary but the demands is higher for the ocean.  Domains are the same.  News.com is certainly more valuable than a domain like “this-is-the-current-california-news-site-number-1-for-news.ad”.  It is easier to remember, easier to type etc so consequently more brandable.  

Let’s be clear, under no circumstances should anyone sell a short, brandable domain name based solely on current traffic without considering the uses to which it could be put.

AT&T is all about market-share and traffic growth and yp.com will add to that.  In short, AT&T got a deal on yp.com.  Yes, current market conditions may have impacted the sale price, but it will pay off for AT&T in the mobile space and SEO.

Look at YellowPages.com (see http://christianriley.com/2004/11/yellowpagescom-price/).  Some people thought they were over-paying, but in retrospect, it appears they got a good deal. 

(see  http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20090114005473&newsLang=en)