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Some thoughts about the value of gTLDs, long term potential, and "toxic" registries

Located in gTLD Discussion, started by pfj, Jul 12, 2016

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  1. pfj

    pfj Established Member

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    Inspired by the thread asking about whether .bet should be considered a flop, I'm interested to see which TLDs members of NamePros think have the best potential and strongest value. I started writing my response in that thread, but then began thinking more broadly about this, and thought that perhaps it deserves its own thread. I know it's ground that's been covered before, but I'm curious to see what other people think.

    My opinion is that "transactional" TLDs are probably among the most valuable - i.e. those where there's a clear purpose which is "go to this domain name to do this specific thing". This is assuming that we are talking about registering either generic names, or names with a strong value (2 character, 3 character etc). On this basis, TLDs such as .bet, .loan, .hotel, .news, .training, .flowers, .shoes are some of the stronger ones out there.

    Secondarily, I think there is also relatively strong value in "industry focused" TLDs such as Lawyer, Accountant, Hosting, Rentals, Wedding, etc However, I think that it will be a long time (years, not months) before we see these types of domain reach their full potential. Some of these are a bit of a strange fit too - flowers.wedding doesn't make much sense, but wedding.flowers does. Equally Shoes.Wedding is a bit cumbersome, while wedding.shoes works quite nicely.

    I'm speaking from an English-language perspective here, though, so I can see that for people whose first language is not English, there may be a different take on this. This in itself opens up an interesting point - the vast proportion of the new TLDs launched so far are English language. This suggests to me that for the long term, speculators who are able to leverage their knowledge of non-English languages to acquire strong keywords in non-English TLDs may benefit. Equally, acquiring non-English keywords in very strongly transactional generic TLDs is probably a good move. NYC.Hotel is great, but niuyue.hotel is also potentially strong.

    On that logic, TLDs like .bet, .loan, .hotel, .news, .training, .flowers are some of the stronger ones out there.

    .xyz has made a strong play for universal recognition, which increases the overall value of the domain extension, as it means that (hopefully) people become familiar enough with the idea of addresses ending .xyz that it's not a surprise when someone says over the phone or in person "visit our site to find out more info - oursite.xyz is the address". My impression is that the xyz registry - and some of the other highest performing by volume registries - have a potentially significant developing problem around low quality registrations - unless people see strong and well regarded "superbrands" using .xyz for specific campaigns then the whole extension risks becoming regarded as trash, as happened to .info a few years back.

    However, I think we're still in the early stages with all of this - it's probably going to take another couple of years before we see widespread crossover and consumer awareness for new gTLDs, and that will change things considerably. As referenced above, I think the key thing here is well-known brands using innovative TLDs for specific campaigns.

    So for example (and I'm pulling this off the top of my head) I think that (say) Red Bull, the energy drinks brand, using RedBull.club (which diverts to their main site) is boring, and people are likely to forget the .club part of the domain, and just google for red bull. However, if they used "youcan.fly" in a viral "Red Bull gives you wings" ad campaign then people might notice and remember the unique domain. Similarly, Adidas.football is kind of boring (though potentially a good example of the "transactional" type domains referenced above) but Football.University would be a great domain for them to use as a brand for a specific ad campaign engaging with young footballers who want to develop their skills.

    These are very basic examples, but I think we will see stronger crossover when brand marketing teams get innovative with domains and inspire curiosity amongst consumers.

    More generally, I think one of the biggest issues that gTLD investors face is pricing. A lot of interesting extensions have truly WTF pricing. There are interesting extensions which are underperforming, largely because of the prices set by registries. I think if pricing issues were addressed, some of these would become much more interesting for speculators.

    I also think we are going to see a significant number of independent registries fail or otherwise shutdown - or be acquired (i.e those not operated by Donuts, Famous Four, Minds + Machines, Rightside, Uniregistry etc) - there are a number that I have been tracking which I do not see as being sustainable over the long term, bearing in mind the potential operating costs involved in running a registry. It will be interesting to see how this plays out over the next few months, as smaller registries which launched in 2015 hit the one year registration mark and people don't renew their impulse buys. Some of them will potentially be snapped up by larger registries/investors who can reboot them, others I think may merge/consolidate, and still others will just shut down. Either way, the future for these underperforming "indie" registries is potentially uncertain, but there could be value in tracking/monitoring them on the lookout for bargains.

    So, a few questions which I think all domain investors should consider when looking at gTLDs:

    Which categories of domain extensions do you think have the best value, and why?

    Which extensions do you think are underperforming because they are too expensive, but would become more attractive for investment if the registries dropped the price?

    Which gTLD registries are "toxic" because their future is too uncertain, and so unsuitable for investment?
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
  2. dordomai

    dordomai Top Contributor VIP

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    Most if not all. The registrant has virtually no rights and in some cases registries were taking back domains from investors with some lame excuse. This alone makes them unsuitable for long-term investment.

    Then good keywords are either premium or reserved. Not good for speculators.
     

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