IT.COM

interviews Expert Exchange: An Interview With Frank Schilling

Spaceship Spaceship
Frank Schilling is one of the most recognizable names in the domain name industry. He has built a domain name portfolio that consists of hundreds of thousands of domains, including some of the most valuable digital properties on the Internet. Frank is also CEO of Uniregistry, the domain name registrar and marketplace that administers many new gTLDs.

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Recently, the news broke that Frank's company is to delete 230,000 new gTLD names, with a further 10 million names to be released. This news sparked an incredibly popular debate regarding the future of new gTLDs.

In this interview, we talk to Frank (@Frank.Schilling) to get his views on new gTLDs and whether there is now an opportunity for investors to buy new gTLDs. We also discuss the Chinese market, and Frank gives valuable advice to new domain investors.

Some of the questions below are inspired by the questions that were raised within the new gTLD debate on NamePros.


NP: With the news that you are releasing 10 million names, will the list of the 10 million names that are due for release will be available to download or view at any point?

Frank: Firstly for new folks I should clarify we aren’t necessarily deleting 10 million registered domains. We are removing registry locks from those millions and force deleting hundreds of thousands of names.

Keep your eye on the domain names newswires as there will be a page this month with downloads and ample time for you to review. There will definitely be a land-rush, but I think your readers have the luxury of being patient and moving in slowly. Never register more names than you can afford to carry and balance your desire to get everything with temperance and patience.


NP: Are new gTLDs being adopted by end users and investors as much as you expected at this stage of their lifecycle?

Frank: Collectively yes. The numbers are public and more than 24 million new gTLDs are registered. There are undulations in there but it will be 50 million in a couple of years. Kevin Murphy masterfully revealed that much of the “growth” in naming is happening around new gTLDs.

That’s an exceptional result and much quicker than I anticipated.


NP: Can you share any new data about your large gTLD sales?

Frank: We’ve retailed names for tens of thousands each and sold millions of dollars in new extension SLDs. We see other customers selling new gTLD names that they just bought for hundreds of dollars and turn around only to flip them for thousands. I personally know of several $500,000+ deals.

New gTLDs are real. Just as real as any other name. Some sales have been reported publicly and we will announce more with the next tranche of Uniregistry Market activity.


NP: What changed in recent years that made domain names a desirable investment asset? How have gTLDs affected this notion?

Frank: I think the phenomenon began with a decline in parking revenues. Exasperated domainers switched many names from parking to sales only. More sales pages placed in front of more people lead to an increase in awareness that domain names could be bought (and subsequently sold). More people selling, more brokers attracted more buyers. New buyers putting tens of millions to work. It’s a small industry at the end of the day and a few hundred million dollars can really move this market. That happened here, and it happened in China.

New names are still “new” in the minds of consumers, and many would-be purchasers inquire on a premium new gTLD name, hear the price, then put their thinking cap on and try to buy an unregistered version rather than paying a domain’s resale price. That will change as we go from 24 million names registered in new gTLDs to 50 million and then 100 million.

Sales prices will increase and sales will happen more frequently as good names disappear and get vacuumed up. Today, .COM sales still dominate the sales charts at the brokerages. However as a long term holder (and nobody in this business thinks more long term than I do), I think .COM is being marginalized by new gTLDs and that trend will accelerate over the next 10-15 years.

Think about it. As an investor, if you pay $10,000 for a .COM name, your thoughts are “can I make 50k soon?” and “how safe is my investment for my kids?” .COM is going to have company and margins on sales will squeeze as new extensions become more popular and using an alternative ending as an anchor site becomes more viable. One day, living on a new gTLD alone will become a viable option. Today it feels too soon to the old folks.


NP: What single factor influences gTLDs purchases more than any other?

Frank: Well on the domainer side it’s greed and fear. Greed to get in early on a great opportunity (which these names represent) and fear of missing out on that opportunity. But for regular registrants, this is a breath of fresh air. If they see the name in the rotation at their retail registrar and the name feels viable, registrants immediately get-it.

That natural daily registrant flow (people adopting these new name endings as their preferred anchor site) is what is making these names more mainstream. It’s as natural as the tide coming in. Lots of water drops. People taking a name here and name there, new sites getting built and sites getting more popular.

These names look desirable to the eye and the natural force of attraction brings new registrations and will grow us to 50 million and 100 million registrations next.


NP: For those investing in gTLDs, what would you recommend as their best means of lead generation for sales?

Frank: Every day we get offers on new gTLD names. When I look down at the traffic and revenue stats (my famous AMR and ADT metric), I’m shocked that more often than not their profile looks better than .COM! More traffic and more revenue than my average .COM. I’ve heard people postulate that this is because domainers are searching the names to see if they are available, but that’s absurd because you could argue that .COM names get traffic for that reason.

So to answer your question, if you pick good names that make sense, the leads will come from the natural traffic of people guess-typing these names. You can also list the names at Uniregistry market and we will broad match premium strings in our search results.

Uniregistry is growing, getting more audience and will become a large retail registrar in the next 5 years. You can cross list at other markets as well. Good names will get found, though. You deserve to pick the best name. Don’t be afraid to spend thousands of dollars for a truly great name. You’ll often have more real value and lower carrying costs than thousands of average of marginally good names.


NP: What are your thoughts on the Chinese market? Has Uniregistry changed any strategy (either acquisitions or sales) in light of last year's Chinese domain craze?

Frank: I have to tell you, Uniregistry (and Frank Schilling Inc.) don’t adjust to anything. We just do what we believe in for the long term, what we truly feel is the right thing and the good thing and then we wait. We positively cleaned up when the Chinese market exploded and grew last year. We just sold more of the inventory that we believed in all along.

When the market paused in China, we didn’t change a thing, we just sold less names. Hotspots constantly flare up in this industry and that drives growth. You never know where those hotspots will flare up. It’s like surfing. You have to be in the water with your board because another wave will come eventually and what a ride it will be!

Many domainers miss opportunities because they are afraid to sell. You have to let go, because other opportunities will come. Better to sell for less profit than not sell at all. China will absolutely flare up again. It’s no secret I love people (all people) but I have a special fondness for the Chinese. They have this "can-do swagger" that I see in my Russian and American friends. Those three groups should get along better because they are so much alike deep down.


NP:If you started domain investing in 2016 with a small budget of $5,000, what type of domains would you buy? What's your top tip for anyone just starting out in domain investing?

Frank: I would pick anything where I can generate a sale. For some people that will be flipping new gTLDs, for some it’s grabbing expired .COM inventory at NameJet or GoDaddy auctions. It’s all good. You just need to focus on that thing which you really believe in because you can’t sell the opportunity if you don’t believe in it.

I personally believe in new gTLDs. If you have time to invest cold calling potential buyers, the sales pitch on a really great gTLD is more compelling, delicious and newer than a two-word .COM. I’ve taken a lot of criticism from my colleagues for “pumping up” new gTLD names, but I believe in the overall opportunity.

And I "always" think about that new $5,000 domainer you describe. The key with new gTLDs is to get a much much better name than you could in the .COM; don’t settle for compound phrases. You have to know what you’re doing here and some of this can’t be taught. It’s all instinct. I am proud to see people with good instincts making $$$$$ with new names.

I participate in the .COM expiry market and think it’s hard to get those great deals that once were there. There are still deals, though, and I would never turn my back on .COM. I’d go mining for crazy good new gTLDs. Make offers on the best of the best new G's and continue to try to get deals on expiring .COM. The secret with names is "the shorter the better."


NP: If a domain investor is struggling to sell more established extensions, would you ever recommend that they invest in new gTLDs, given the fact that they can be more challenging investments?

Frank: Not everyone in this business has good instincts. We all know those portfolios; names which don’t make sense, such as theme portfolios and long tail portfolios. Half the folks in this business don’t have the right instincts and that has created this strange Plutocracy. Now, it’s getting better out there because new gTLDs add new inventory and even people who aren’t as good at this look like rock stars when short names are available.

You should never speculate in names if you don’t have an interest in it and if you can’t afford it. Never risk more than you can afford to lose.


NP: Do you think that the news of your company deleting so many domains will have an influence on the renewal rates of other new gTLD investors? How would would you recommend investors evaluate their portfolios to see which new TLDs to drop?

Frank: It may very well do so, but that’s an opportunity because once again, we‘re very far sighted. I don't do things because I’m worried how they are perceived. I’m thinking about what this space looks like in 20 years. The 10 year olds are who I’m thinking about - seriously.

We just do what we do and what we think will be best for our spaces. If people judge that negatively and let their names expire, then there is another guy standing in the background who will register the good ones.

Each investor should apply their own methodology and weigh their risk appetite against their faith in the names they registered and reconcile all that against the amount of time they can carry the renewals. We do the same thing here. Then we dollar cost average the entire revenue stream over our expenses and that’s the business.

In our case these deletions are strategic because we now have sufficient distribution that we think we can drive much more volume and future registrations by letting all the best names out. People will register these good names, they will build sites and speculate, then new people will try to copy and emulate them and that will grow all our spaces larger. In a year we will be much bigger. It’s like a forest fire; it brings renewal as it burns out the underbrush. Consider this a controlled burn.

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Thanks to Frank for taking the time to talk to us about this wide range of topics. It's clear to see Frank's passion for new gTLDs, and it's great to see one of the industry's most successful investors publish their thoughts for everyone to read.

This interview has been edited for length and clarity.
 
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The views expressed on this page by users and staff are their own, not those of NamePros.
I appreciate the interview, but points like this are nonsense -

Frank: Collectively yes. The numbers are public and more than 24 million new gTLDs are registered. There are undulations in there but it will be 50 million in a couple of years. Kevin Murphy masterfully revealed that much of the “growth” in naming is happening around new gTLDs.

The truth is a handful of extensions are grossly inflating the numbers.

There are 24M regs because the majority were free, 1 cent, or at least under 50 cents. It is a great cheap option for spammers/scammers. That is probably why so many new gTLD are on the Spamhaus most abused TLD list.

Then there are many of those 24M that are registry owner/reserved as well.

If you want to go by raw numbers even .TK has 20M+ registrations. There is not always correlation between number or registrations and value.

If .COM was always priced at under 50 cents, I could not even imagine how many registrations there would be.

Brad
 
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If the gtlds are so great and he registered 230k of them to resell then why is he dropping them? It's easy to say one thing, but I'll listen to the actions of what the person does (or does not do) with their cash.
 
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Some astute domaining advice from Frank in my opinion. Not just in regard to the new Gs but domaining in general. Even for people like me and yet to invest in the new extensions, there's plenty of wisdom in Franks' comments if one is ready to listen. Thanks James!
 
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I don't think Gtlds would be doing for the next 5-10 years atleast.
 
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I appreciate the interview, but points like this are nonsense -

Frank: Collectively yes. The numbers are public and more than 24 million new gTLDs are registered. There are undulations in there but it will be 50 million in a couple of years. Kevin Murphy masterfully revealed that much of the “growth” in naming is happening around new gTLDs.

The truth is a handful of extensions are grossly inflating the numbers.

There are 24M regs because the majority were free, 1 cent, or at least under 50 cents. It is a great cheap option for spammers/scammers. That is probably why so many new gTLD are on the Spamhaus most abused TLD list.

Then there are many of those 24M that are registry owner/reserved as well.

If you want to go by raw numbers even .TK has 20M+ registrations. There is not always correlation between number or registrations and value.

If .COM was always priced at under 50 cents, I could not even imagine how many registrations there would be.

Brad

The interview is superb and excellent IMO .

But @bmugford I love your review, you are absolutely correct. Frank is a marketer, and he is doing nothing more than to blow his trumpet.

Thanks for your reveiw on Frank.
 
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wow, interesting, thank you.
 
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NP: Can you share any new data about your large gTLD sales?

Frank: We’ve retailed names for tens of thousands each and sold millions of dollars in new extension SLDs. We see other customers selling new gTLD names that they just bought for hundreds of dollars and turn around only to flip them for thousands. I personally know of several $500,000+ deals.

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Excellent interview.

But....GTLD names selling for $500K? Am I reading it wrong?
 
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No. Never happened, never will.

Excellent interview.

But....GTLD names selling for $500K? Am I reading it wrong?
 
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Never register more names than you can afford to carry and balance your desire to get everything with temperance and patience.

Great advice for all investors, irrespective of industry.

I think .COM is being marginalized by new gTLDs and that trend will accelerate over the next 10-15 years.

The trend will accelerate but will they ever edge out .com or relevant ccTLDs? I think not.

One day, living on a new gTLD alone will become a viable option.

One day living on Mars will become a viable option too.

Don’t be afraid to spend thousands of dollars for a truly great name. You’ll often have more real value and lower carrying costs than thousands of average of marginally good names.

Again, excellent advice, if I had to start today I'd get 10 great names, sell 5 for excellent ROI, rinse and repeat.

The secret with names is "the shorter the better."

Hardly a secret anymore, this was always apparent. Though given the length of some of the ntlds Keystroke Length [KSL] becomes even more important.

You should never speculate in names if you don’t have an interest in it and if you can’t afford it. Never risk more than you can afford to lose.

Again, good advice, irrespective of industry, the fact that he's said so again in such a short interview must give everyone pause.

I’m thinking about what this space looks like in 20 years. The 10 year olds are who I’m thinking about - seriously.

If you have a 20 year timeline, ntlds are a good bet?

We just do what we do and what we think will be best for our spaces. If people judge that negatively and let their names expire, then there is another guy standing in the background who will register the good ones.

There's one born every minute?

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Good interview guys, one gets to learn so much from what people say.

I don't have an issue with alt tlds, my main issue with ntlds is pricing - if they were all $5 reg and renewal, they'd make a great investment but since the registry is pricing them out of the reseller market, one has to wonder whether it's better to pay $10k for a .com that can be used today or $1k/yr for 20 years for an ntld that might become viable after a few years.

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The trend will accelerate but will they ever edge out .com or relevant ccTLDs? I think not.
Indeed. Discarding the ccTLDs is a very US-centric view...
 
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I’m thinking about what this space looks like in 20 years. The 10 year olds are who I’m thinking about - seriously.

main spending power is 45+.. will be in 35 years.

I don't care what happens then.
 
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"I think .COM is being marginalized by new gTLDs"

Wrong. Com is still the king of the domains.

But, .net and .org values definitely take a hit when there are other viable domain extensions available. In fact .net total registrations actually dropped in Q2.

When the .com is already registered and you can get a .xyz for a penny, some people will jump on that.
 
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NP: Can you share any new data about your large gTLD sales?

Frank: We’ve retailed names for tens of thousands each and sold millions of dollars in new extension SLDs. We see other customers selling new gTLD names that they just bought for hundreds of dollars and turn around only to flip them for thousands. I personally know of several $500,000+ deals.
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Not seen any of such NewGTLds sales in your 5,745 published sales: https://namebio.com/blog/full-list-42-6-million-sales-uniregistry-released/. except if you have just sold such [/QUOTE]


New gTLDs are real. Just as real as any other name. Some sales have been reported publicly and we will announce more with the next tranche of Uniregistry Market activity.

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Absolutly fact; New GTLDs are same as every other names.
 
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"I think .COM is being marginalized by new gTLDs and that trend will accelerate over the next 10-15 years."

There is too much uncertainty about what will happen tomorrow, let alone 10 years later.
To get the cake, the strategies should be flexible and act quickly, not wait, just like the Chinese.
 
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I'm not sure the dropping really means anything. The registries simply kept too many names back. It simply means they were a little too greedy, nothing more. In fact, you could even see it as a strategy allowing them to have 2 land rushes.

You see that concert tickets sometimes. Pre-sales go out, but then later you see better tickets go on sale with the 2nd wave of tickets. Why? Because they know the die-hard fans will buy a ticket no matter what .. then they save the better seats for those who need more convincing.

The real judgement is whether the actual sales are strong/sustaining or not. To which the answer could be yes, or could be no .. I personally do not have the needed data to answer that question. It depends on how many of these domains are actually getting developed and sold to end users. Because if it's just domainers reselling to domainers, then the market will eventually collapse under the weight of renewal fees.

IF sufficient numbers of end users do start using these extentions then there will also be a strong marketing traction for these gTLD's to take off from. A few weeks ago I saw a medium sized local business use a LLL.co at the end of their TV ad. Certainly one company like that makes no difference, but if another CMO sees that ad and starts using MCN.co instead of MyCompanyName.com, then .CO awareness wins. Everytime they send out emails from a .CO the awareness grows.

That's why not all gTLD's are equal at all and talking about them as a general category is wrong. With some extentions having $1 flash sales (for 1st year registration), domainers will snap them up by the thousands, but 99.9% will never be used, as such you can't really compare the number of registered domains as a measure of success.

At the end of the day some gTLD's are being used, and I think that as more and more businesses get on to the internet finding their .COM's taken or priced well beyond their reach, they will turn to SOME of the gTLD's.

Another completely separate argument however, is the number of gTLD's and their application. Like .MOBI, at first everyone thought every single company with a .com needed a separate mobile site. This ended up being wrong. Will the same thing ironically happen to the .IO trend once .APP becomes available?

Each gTLD will have their own obstacles to whether they get enough critical-mass to get off the ground or not, but as a whole, I think it's just a matter of time before the world starts accepting some of the more successful gTLD's in general. The numbers of people and businesses NOT seriously online yet really make it unavoidable.

That in no way means the death of .COM ... .COM will certainly grow even stronger .. it will have an ever growing number of domains registered .. but that in itself will put it more out of reach to some and feed the gTLD's ... .COM's market share will certainly be lowered by the pressure of better domains on some of the more relevant gTLD's being available to the 80+% of the world still needing a digital presence in the next decade or so.

At the end of the day this whole debate is moot. Are the gTLD's a success? That answer totally depends on each individuals definition of success. More importantly, there really isn't much transparent raw data, so much of these discussions and debates are pure speculation.

What we truly need to look for is end usage growth .. that is the biggest indication of long-term success .. I think that is happening. But whether it's happening fast enough for some to actually call it a success or failure is what I think most people are actually debating without even realising it! ;)


But all that's just this relatively new domainer's 0.00003 bitcoins worth .. so take it with a grain of .SALT! ;)
 
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Wasted precious time by reading this interview.
 
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I like toptip for Domaining.
 
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I personally know of several $500,000+ deals.

This is the most important thing he said. There are companies who see the value in the new gtlds and are willing to pay top dollar for top names.

A strategy is to adjust the price considering how much money the respective industry makes, and considering your domain, address the best companies in a sector: tiny businesses ($100) - 2 words ngtlds, small ($1000), medium ($10,000), large ($100,000), industry leaders ($1,000,000).
 
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