discuss How will all these new TLD's effect the value of the main TLD's

[deez007]

Hey Folks

I was wondering about all these new TLD's that are being created. I'm looking at it from two point of views...

1.) The availability of more naming conventions for names that have already been taken by the main TLD's could reduce the value of the main TLD's

2.) The availability of all these new TLD's would increase the value of the main TLD's because they would have even more exclusivity.

What do you guys think?

 

[garptrader]

From personal experience, I believe the new TLDs have had a significant effect of diverting sales of brandable .COMs and search phrase .Net domains. While my portfolio quality has generally improved over time, this year's sales are likely to be the worst in years. Historically November has been a pretty good month. I recall in 2011 having five or six sales in November. This year I had only one low $XXX sale in November. In prior years, yes there were more low $XXX sales than high $XXX sales and $XXXX sales have never been regular but at least occasional. This year I have only had one $XXXX sale and only three sales over $500 - the fewest since I was a newbie and a considerable drop from several years ago. What I see at Godaddy is that if you type in a keyword, you used to get a number of brandable .COM alterntaives which sometimes would convert into premium listing sales. Now the end user gets bombarded with new TLD alternatives instead. How many of those actually convert I do not know as I still believe more than 90% of new TLD registrations are in the hands of investors. I believe domain investors are paying more attention to new TLDs than traditional TLDs though the end user for the most part is not interested in paying for an aftermarket new TLD - particularly one priced higher than more traditional TLDs (try typing in a dozen keywords at Godaddy auctions to see what I mean). The launch of hundreds of new TLDs (rather than one per year) in my opinion has created a massive oversupply and at some point we will see the number of new TLD registrations reverse course. There just is not enough end user demand - unless there is a seismic shift in the way domains are viewed - as branding tools to promote a business' products and services. Given what companies spend on all kinds of normal operating expenses, $5k is really no big deal for a relevant domain. But instead they are more often viewed like a hosting account or logo you pay $XX for. End users still often view a high $XXX price for a domain name as extortion when they will give no thought to spending that much for other operating expenditures.

 

[Casey L]

gTLDs will still increase in value, but so will the best nTLDs. In time, new businesses will brand themselves around a nTLD (coffee.club) and people will familiarize themselves with the popular ones. I believe gTLDs and nTLDs can exist in synchrony without either depreciating, however only the good nTLDs and well branded domains in those nTLDs will survive.

 

[deez007]

Thank you guys both for your input.... both of you make some really interesting and valid points indeed.

 

[garptrader]

I thought about this a little further. There are currently more than ten million new TLD registrations. Many of those have already gone through one renewal cycle and many have premium renewals. Premium keywords had phased acquisitions where early access pricing meant paying significantly more (i.e. high $xxx or more) for each domain. Later stages before general availability still meant paying low $XXX prices. So even though the more popular new TLDs tend to be ones with lower renewals and initial acquisition costs, I would estimate that the average new TLD has a total cost of around $50.

That means that in two years close to $500 MILLION has been spent on new TLDs which otherwise would have largely been spent on already existing extensions (.COM, .Net, etc). Going forward, renewals of new TLDs will cost investors perhaps $150-$200 million annually which otherwise might have been spent on .COM or other already existing extensions. How long is that sustainable if end users don't come to the rescue quickly? That remains to be seen.