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 . . .

Source

 

[Kate]

There will be no second coming of .com. The ship has sailed.
Besides, the opportunities are all around you. Taking the hard road is your call though.

The supply vastly exceeds the needs of the primary market, but you are already focused on the secondary market. Be careful, holding domains costs money. Perhaps every domain purchase should come with a warning like that, like they do for cigarettes - IMHO.

 

[bmugford]

What is your new gTLD strategy ?

Avoid them. As far as investing goes.

The registries have stacked the decks against domain investors. Higher renewal prices for domains with less demand is a losing formula.

Brad

 

[Kate]

...
Why would I wait on anything that I felt could have future value and then find out later it's unavailable or offered at an outrageous price tag?

Because it's never too late. But right now the odds are stacked against you, and it's almost certain you will lose money.
I am more a believer in the fast second principle, than the first mover advantage. This has been proven time and again.

Speaking of price tag... you want to make sure the TLD has provisions on capped pricing or you'll run into another .tv scheme that will bleed your wallet.

It is rather interesting to see lots of new investors coming into domaining are very attracted towards buying gtld domains instead of focusing towards investment on solid dot coms that can also very economical for most of them.

Typical...
Buying new extensions for resale without prior experience in selling .com is like wanting to run before learning to walk.

Domain names are like brides: they look sexy the first evening, much less over time when you realize the dowry has to be paid every year. And your domain names can't love you back ! But Bob Parsons loves you.

 

[equity78]

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

 

[bmugford]

Why would you "avoid investing" in domain names like Career.Training, Higher.Education or Kids.Furniture?

Because they generally don't make sense as an investment. Pretty much any great combos are registry reserved or come with high registration and/or high renewal fees.

Which of the ones you listed do not come with premium registration and/or premium renewal fees?

Brad

 

[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.

 

[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.

 

[Jasonn]

The registries have stacked the decks against domain investors. Higher renewal prices for domains with less demand is a losing formula.

Brad

boom...end thread.

 

[sOliver]

What I have not seen mentioned is what happens to developed websites using a gTLD if the company behind it goes down. I care now that I bought one I would like to develop

There are a few scenarios I consider probable:

1. The operator has to inform ICANN 30-90 days in advance (just a guess, but there will be something like that in their contract) of a pending bankruptcy. ICANN will then try to find a buyer in advance. We're already seeing some companies like Symantec sell their extensions to XYZ or Donuts is buying up extensions too. So it's not unthinkable that some companies will try to use that as an opportunity to increase their reach.

2. ICANN cannot find a buyer and it will temporarily suspend the extension until a buyer has been found. It will use its remaining $225.7 million funds to keep the extension in a "zombie-state" (not alive, nor dead).

3. If ICANN can't find a buyer after 180 days (again made up the number, we'd need an actual contract for real numbers), the extension will be suspended completely. Current participants/owners will be stored in a database and will be granted the right to acquire the name before the general public should the extension ever find a buyer.

4. Worst-case (and very probable!): ICANN will shut down the extension after Chapter 12 has been filed if there is no buyer and all names will be lost. Once re-opened, no rights will be granted to acquire previous names.

ICANN has no more ties to the government, they are in it for pure profit and have been given a free hand, so they can do whatever they think is right to increase their profits.

• http://www.zdnet.com/article/us-government-finally-lets-icann-go/

They also don't always act in the interest of domainers and may simply shut down extensions for good:

• https://www.apc.org/en/news/icanns-new-proposal-will-endanger-domain-owners-an

All of this is just speculation. I only invest into extensions that already have > 30-50k names and are operated by Donuts Co to avoid this kind of guessing game. IMHO: Don't invest into names from operators like Mind+Tech Ltd, XYZ, etc - they have a greater risk of going bankrupt, but no company is really 'safe' from bankruptcy. Do your homework on the operator.

If you could get your hands on the actual contract, we'd know for sure. Maybe ICANN has a PDF somewhere that we could download, but I didn't manage to find anything and didn't want to go through the trouble of applying for an extension

There were over 1,200 applicants, but in the coming years the number of extensions could easily go to 2,000 or more. With increased numbers ICANN could make it a numbers game and lower some of their fees. But that is also unlikely, they're a commercial company.

I've read an article somewhere that the blockchain could be used in the future to replace organizations like ICANN but I don't really see that happening for a LONG time unless there is some kind of international cyber conflict and the current cyberwar ends badly for America and they will rewrite the current laws.

 

[sOliver]

.XYZ have 1,043,418 registrations and Daniel is a true marketer. I believe in Him and .xyz.
And I did sold 1 .XYZ for $250. Someone from Germany that wanted to own his first name and he is NOT a DOMAINER.

COM still accounts for 75% of all sales for many holding companies, so I'd rather hand-reg a COM than a XYZ any day.

You are already pointing out a flaw in your answer. XYZ is driven purely by marketing and pricing strategy. Their marketing budget will run out eventually and then all you have is the most useless letter combination there is. Businesses will never buy XYZ domains. XYZ will always be a consumer extension and anyone here on NP who wants to make money should stay away from it. Sure, a few first-names will always sell. Like Paul.co sold for like 15k, so paul.xyz may sell for a few hundred. That is not worth my time.

Go where the big money is and participate in EAP for some quality names if you want to truly get into new gTLDS. Yes that means shelling out 200 or 300 and sometimes even 1k+ but the return can be easily 5k if you have done your research. It's all about research and checking what has sold in the past still has good demand from businesses.

Also, its always more profitable to develop names. I have acquired many names for development, because thats just what my company does. I buy quality names and turn them into sites that bring in passive income.

Domaining for me personally is just a side-business. The same way I invest into companies with personal money, I am investing a little company funds into domains that I believe will appreciate in value once the market has accepted them.

 

[Premium gTLD]

Avoid them. As far as investing goes.

The registries have stacked the decks against domain investors. Higher renewal prices for domains with less demand is a losing formula.

Brad

Completely depends on the name. There are many extremely brandable and ultimately game changing new gTLD's.

Why would you "avoid investing" in domain names like Career.Training, Higher.Education or Kids.Furniture?

 

[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.

 

[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. "

 

[mhdoc]

Perhaps I should mention the difference between a for-profit corporation and a non-profit is the for-profit pays dividends. The non-profit does not. Creating a non-profit & paying you and your friends high saleries with lots of benefits is a time tested path to wealth

 

[pdevananth]

Why do people expect a big aftermarket sale in new gTlds with in a year?

I am not sure how many big after market sale happened so far in .com within a year of registration?

If I am an end user and if BuyGold.com is available for $30K and Buy.Gold is available with $1000 annual renewal fee, I would go for second one as I can register a better name for 30 years.
I hope my customers won't question me why didn't use 30 years old .com name. .com,.net 10 years old 30 years old are domainer's trick to attract another domainer.

If someone can't remember Buy.Gold then definitely he can't remember BuyGold.Com also.

You can't refuse that these introduction of new gTlds have already damaged the sales of domains with hyphen or numbers or lengthy domains. I strongly believe this list will expand.

 

[donnied79]

Reason for people gambling on new gTld is very simple imho, and it's because is very simple to check what's available and register it instead of study and buy good domain at a fair price in the aftermarket to sell them to endusers.

 

[BrandChimp]

.whaterver is just like #Whatever. Simple as that.

Remember the old subdomains or "dashes"? Visit promo.Brand.com or Brand.com/promo.

They will be used to promote products and generate leads.

I dont think they are "Brandables" as you don't want to kill your Brand by adding the word "dot" in the middle of your name.

 

[pdevananth]

Buy hyphen gold vs Buy dot gold?

Not a lot of end users want to kill their brand name. I'd go with BuyGold! (you don't have to say .com)

Who

Buy hyphen gold vs Buy dot gold?

Not a lot of end users want to kill their brand name. I'd go with BuyGold! (you don't have to say .com)

You can buy buydotgold.com also lol

 

[mad409]

@The OP of this thread. Why would I not gamble on new gTLDS?

Why would I wait on anything that I felt could have future value and then find out later it's unavailable or offered at an outrageous price tag?

Why do people invest new stocks? Right, speculation!

Anything in life is a gamble, so why not dabble a bit and see what happens?

Looks to me gTLDS are gaining ground slowly but hey it's early. No pain no gain IMO.

 

[DANEYAL]

It is rather interesting to see lots of new investors coming into domaining are very attracted towards buying gtld domains instead of focusing towards investment on solid dot coms that can also very economical for most of them.

 

[sOliver]

I found something about bankruptcy on ICANN.org:

a trustee, receiver, liquidator or equivalent is appointed in place of Registry Operator or maintains control over any of Registry Operator’s property, (iv) execution is levied upon any material property of Registry Operator, (v) proceedings are instituted by or against Registry Operator under any bankruptcy, insolvency, reorganization or other laws relating to the relief of debtors and such proceedings are not dismissed within sixty
​

and

Release of deposits: Registry Operator has: (i) ceased to conduct its business in the ordinary course; or (ii) filed for bankruptcy, become insolvent or anything analogous to any of the foregoing under the laws of any jurisdiction anywhere in the world; or
​

Very much looks like ICANN will indeed take over the operations when an operator goes bust:

ICANN may, upon notice to Registry Operator, terminate this Agreement if (i) Registry Operator makes an assignment for the benefit of creditors or similar act, (ii) attachment, garnishment or similar proceedings are commenced against Registry Operator, which proceedings are a material threat to Registry Operator’s ability to operate the registry for the TLD, and are not dismissed within sixty (60) calendar days of their commencement,​

 

[Premium gTLD]

If you have an investment time frame of weeks, then you shouldn't be purchasing any premium domains.

 

[Kate]

If you want to cash in on new extensions, the best way would be to buy shares in the registries. Every registration is a winning ticket for them. But that doesn't mean all those companies will be financially healthy.

The registries are the new domainers. They understand that the real money will be made at the top of the food chain.

 

[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.