new gtlds Why Gamble on New gTLD Domains Today?

[News]

The new gTLD domain names have been on the market for over a year now. There have been some publicly reported aftermarket sales, but I think it is a very small percentage of the weekly sales (by volume and value). I am still mostly on the sidelines when it comes to investing in new gTLD domain names. I didn’t invest .com domain names in the 1990s. I didn’t even buy great .com domains until the mid to late 2000s. Despite this late entry, my business has still grown and flourished. There are plenty of other examples of people who have . . .

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[Name Trader]

There is one huge difference with the renewals of .com domains compared to the renewals of the new GTLD's. Which is the new GTLD's are much more expensive to renew. This makes the holding of marginal domains unlikely with the new GTLD's. Couple that with the withholding of domains and premium prices, and the best way to play this market is as a Registry. Which in itself explains why many of the old domainers now own Registries/Registrars. Also with the new GTLD exposure still being very limited, compared to old TLD's, it isn't surprising you have taken this position. It's my position also. Although I have a dozen or so new GTLD domains. As a Domainer most these new GTLD's are not so attractive, because if you cannot find your domain in one GTLD, you might find it in another. I personally don't find much to my liking with this entire scenario. But I have dabbled in a few.

 

[sOliver]

There is one huge difference with the renewals of .com domains compared to the renewals of the new GTLD's. Which is the new GTLD's are much more expensive to renew. This makes the holding of marginal domains unlikely with the new GTLD's. Couple that with the withholding of domains and premium prices, and the best way to play this market is as a Registry. Which in itself explains why many of the old domainers now own Registries/Registrars. Also with the new GTLD exposure still being very limited, compared to old TLD's, it isn't surprising you have taken this position. It's my position also. Although I have a dozen or so new GTLD domains. As a Domainer most these new GTLD's are not so attractive, because if you cannot find your domain in one GTLD, you might find it in another. I personally don't find much to my liking with this entire scenario. But I have dabbled in a few.

You make some very good points. However, the registries have to manage thousands and thousands of names. And they're only human, which means mistakes will and have happened. Grave mistakes. A lot of premium names have been given regular prices or very low premium prices.

If you listen to one of the recent talks on DomainSherpa about gTLD (DnSeattle event etc) you will hear one of the registrars confirm that some businesses are willing to pay 5,000 per year for certain premium names. Just let that sink in for a minute. And apparently that is not rare, it's a normal occurrence and sales are often in the mid 5-figure range. And as a business owner, I would do the same if I were in a business with a high profit margin like insurance or real estate.

So, if you find names that have a regular renewal fee but are in fact a premium names, you got a winner.

Find the low hanging fruit. Just dont get too much into it. Its easy to waste money on names that will never be worth anything because of excitement (happened to me a few months ago, wasted like 500 on a bad extension).

You need to keep a cool head and put in a lot of research before hitting that buy button. I believe if you follow that concept, there's A LOT of money to be made, not just by registrars, but individuals who do their homework.

Also dont invest into extensions run by random registrars. Donuts Co is the most established gTLD player. Stay away from those consumer extensions like fail, wtf, xyz, .. complete waste of money driven by marketing.. which will run out eventually.

 

[equity78]

Not sure I would say it is a normal occurrence that people are dopping five figures on new gtld names.

 

[sOliver]

Not sure I would say it is a normal occurrence that people are dopping five figures on new gtld names.

Well if you believe what the registrars are reporting then it is, but you're right they have a stake in this so its best to take everything with a grain of salt.

But honestly I wouldn't be surprised if it was true.. some names are definitely great for branding. And once consumers are used to to seeing longer terms on the right side of the dot, it will pop up everywhere and become "accepted". If you want to stand out today, its definitely a good investment.

 

[sOliver]

But its true, the registrars will be the big winners. We'll also hopefully see extensions being used in a completely new way.

Google owns quite a few new extensions. Overall they own 42 extensions, most of which are related to their services like Youtube or Nexus, but they also own quite a few which they intend to sell to companies. For example .fly, .how, .soy, .ing, .dad and many other. Will be interesting to see how they auction the names off. Apparently they will also make family gmail names available like "smith.gmail".

They also own ".mov", which I believe they may use for augmented movies and stuff (based on what they stated to ICANN). Or .foo could become a git repo extension. Lots of money is thrown around but a few things will stay with us I guess

 

[mhdoc]

I don't know that it would make sense for a domainer, but for someone like me who prefers to develop, a few gTLD's may make sense.

I picked up Bugs.expert a few days ago. I have the idea of making educational membership sites by curating existing science and natural history videos into lessons & courses for students of all ages.

I thought I would have to use multiple sites to cover enough subjects to maintain interest. So I had started accumulating domains like HabitatMap.info. (Habitat maps open the door to all sorts of ecology related subjects.)

If you do a search for bug images & videos you quickly see I could build courses for years without running out of material to curate.

The dot com and dot net are existing pest control sites. The dot org is educational, but very different from what I have in mind. The time & money saved by only using a single domain and having all my content in one place will more than make up for the $40 renewal fee.

It looks to me like the proliferation of good names on "bad" extensions opens the door to guys like me with shoestring budgets to have a chance at success.

 

[Asfas1000]

So, if you find names that have a regular renewal fee but are in fact a premium names, you got a winner.

Not so sure about this, gtld registries can change the renewal fee any time . Creepy.

 

[Rado_Ch]

Registered names in the gTLDs dropping come their renewal was an expected occurrence. What surprises me though is registries not putting enough/any effort in one of the big causes for that - lack of education for the mass audience. They are basically offering something completely new to the Average Joe but not taking their time to explain what it is and what their benefit is. Truly, some extensions are just too stupid to ever catch on but seeing that millions of online users still have no idea that you can have a website outside the traditional extensions I think that its only natural to want to generate demand before you create a huge supply...

 

[doubleU]

Not so sure about this, gtld registries can change the renewal fee any time . Creepy.

As I understand it, the original pricing tier used to first register a new gtld must not increase.

 

[sOliver]

As I understand it, the original pricing tier used to first register a new gtld must not increase.

That is correct. Else they would lose credibility. So if you buy a premium domain at a $100 renewal fee, it won't be a $500 renewal next year.

However, domain discounts that apply to regular domains do not apply to premium domains.

I'm quite happy with my recent acquisitions.

 

[cocaseco]

Of course they don't have to "catch on". All they have to do is bring a profit to the investors that is better than their other options and it is a winner. There are several ways to get there, including one of high initial prices and not worrying about renewals.

 

[Asfas1000]

That is correct. Else they would lose credibility. So if you buy a premium domain at a $100 renewal fee, it won't be a $500 renewal next year.

I remember a case when someone bought gtld's for $xx and then the registry decided they were premium and asked for $x,xxx starting the next year.

 

[Nick]

I'd have to go back and re-watch it, but I think Frank Schilling mentioned something about a variable renewal fee for some gTLD in his last appearance on Domain Sherpa. It was actually sort of unclear and I think Mike was trying to get him to clarify, but didn't.

 

[Nick]

I'd have to go back and re-watch it, but I think Frank Schilling mentioned something about a variable renewal fee for some gTLD in his last appearance on Domain Sherpa. It was actually sort of unclear and I think Mike was trying to get him to clarify, but didn't.

http://www.domainsherpa.com/review-20150615/ starting at about the 50:40 mark.

"This shows you the problem with variable priced registries. When you put the name out there early...'oh it's a variable priced renewal'...I'm forever scarred when it's a variable priced renewal. "

 

[Asfas1000]

OK I found it. This is the post

http://onlinedomain.com/2014/11/13/...ewals-will-be-as-high-as-5400/comment-page-1/


So technically the registry can take any domain away from me, any time, by pricing it very high ?!

 

[lock]

The dot com buyers of the 90s also bought into dot TV and the miscellaneous islands eg dot nu they also bought into dot xxx dot shop with new dot net. The history of other extensions has not been successful for investors. Since the new gtld names have been released dot net has taken a beating. Want to buy something tomorrow will you chose an established dot com to do business or will you enhance your risk and do business with an obviously new site? After 2 years when they start to expire you will see a pattern and that will be they aren't going to be renewed. Domains are one of the largest scam industries on the web due to false invoicing many of the domain sales have occurred due to company administrators paying bills not due to direct sales but due to sending thousands of random invoices to register similar names to what they currently use.

 

[sOliver]

That's why you don't go with registrars such as Hexonot and don't register extensions like "surf" owned and operated by dubious companies like Mind + Machines Ltd. Ltd already says it all, it's a small company that will not do business in your favor.

Donuts Co is much more professional (in my opinion). They had a very detailed business plan and did a lot of planning before launching those extensions. The same cannot be said for crappy extensions such as surf. The idea that a domain like web.surf would even sell for more than $1 is beyond me btw.

Stick with the established players only. This is just like any other business. You don't do business with a company that could go bankrupt any day now.

Donuts has the finances and the people to support this industry. They want domainers and developers to get their hands on the names to spread awareness. They rely on us and know they cant afford to play games with us.

 

[Name Trader]

Donuts has the finances and the people to support this industry. They want domainers and developers to get their hands on the names to spread awareness. They rely on us and know they cant afford to play games with us.

I don't think even Donuts are looking out for Domainers. What will happen after awareness has been spread by us? If they feel that a domain you registered should have premium pricing, what do you think they are going to do?

But I would agree with your advice about going with the strong Registries rather than the weak ones.

 

[daj]

Bottomline is 97% of all internet users know nothing about the new gtlds, ask them about .info, .biz, .co, .me, .ws, etc. that have been round for years & years and I guarantee you most of them have no clue about them.

I see 99% of these new extensions going absolutely nowhere, even if developed.

 

[sOliver]

I don't think even Donuts are looking out for Domainers. What will happen after awareness has been spread by us? If they feel that a domain you registered should have premium pricing, what do you think they are going to do?

But I would agree with your advice about going with the strong Registries rather than the weak ones.

Donuts is not stupid. They know that their pricing strategy can only work if they have the numbers. It's all about the numbers. They would rather sell a million domains than a few thousand at a $500 renewal. They are already lowering the prices on many extensions. $16.99 seems to be a price many are willing to pair and renew at. They noticed that many domains were not renewed this year, so their reaction could be to lower prices or offer frequent discounts (which they're already doing!).

They also understand that the money that comes in from EAP is going to come in ONCE and they use that money to fund and market their extensions.

.xyz and .top have proven that domainers want low prices. XYZ is a consumer extension, so it makes sense it would cost less than a COM. Whereas .villas, .estate etc are usually registered by companies with a little more money and it's understandable they'd cost $30-$80 at first. The target group is also a lot smaller so they have to charge a bit more because the numbers will always be lower.

But a great deal of buys are pure speculation at the moment and will only be renewed if they decrease, not increase prices. Businesses are already starting to cut expenses this year. We're most likely entering a recession soonish. That are factors that have to be considered by a registrar in order to survive.

Of course they have a lot more data to take into account and are testing different pricing models, but they will most likely lower prices or risk losing many customers. A repeat-customer is always better than a one-time customer.

Being a registrar is not an easy task I assume, but it must be fun going through all of that data and testing different pricing strategies. I guess we'll see.

 

[mhdoc]

In 1998 when I talked to people after I published my first website everyone asked "Whats a website". A couple years later that changed to "Why would I want a website?"

Things gradually change. The best resources are taken by early adopters. Of course they make the most mistakes too

 

[Asfas1000]

In 1998 when I talked to people after I published my first website everyone asked "Whats a website". A couple years later that changed to "Why would I want a website?"

Things gradually change. The best resources are taken by early adopters. Of course they make the most mistakes too

Very well said. But, by publishing a website, you were not risking anything, right ?

 

[mhdoc]

Well, at the time I was just coming out of a chapter 7 bankruptcy and had to borrow the $120 from my mother. That was $35/year with a two year minimum (Netsol) plus I paid $50 to have someone handle the registration for me to make sure it was done right Then I signed up for a hosting account at about $9/month and didn't make any money from the site until about 2007 when I heard about AdSense.

Its been very kind to me since then and well worth it. By the time lots of people can see something is a good deal, the real deals are long gone.

 

[Chris Aguilar]

I am in a unique position as I get to see what people hold in their portfolios and I'm seeing more and more of the new gTLDs being purchased by domainers. So far, I'm seeing a lot of .click and .link being purchased. A few other extensions I see being purchased are .events and .xyz

In my portfolio I'm all in with the new gTLDs. I'm sure when everyone was buying .com in the mid 90's everyone thought they were crazy. I don't want to miss out on this boat.