In the Marchex (MCHX) earnings call today a question was asked about how the new gTLD’s will effect .com’s values specifically those domains held by Marchex. and how the continued movement of consumers to smart phones will also effect the values.
Here is the question which was asked by Andre Sequin of RBC Capital Markets, LLC, Research Division:
“In terms of the value of the domain portfolio, how do you think the introduction of the new gTLDs, which will be happening here in the next 2 months, will impact the value of the domains you hold? And then coming at it from a slightly different angle, does the shift to a more mobile world and a broader use of smartphones have any impact on the value”?
Here is the answer by Russell C. Horowitz , Founder, Chairman, Chief Executive Officer and Treasurer of Marchex
“We’ve done exhaustive due diligence as part of our process with Archeo. And in looking back at the new TLDs and potential impact,
“I think I’d liken it to the fact that, in the past, when new TLDs have been introduced, whether they’re .biz or .info, they really haven’t impacted the value of generic commercial .com domains.
“When we look at the new TLD introduction, it’s possible they’ll grow the market to some degree.””
“But the feedback we’ve received from folks who have both made investments in that market and other folks in the domain space, as well as based on our own experience and the fact we continue to see very high demand in terms of the Archeo assets, it kind of tells us that commercially relevant .com domains continue to have substantial value, and we don’t believe the new TLDs are a significant factor that impacts that value.”
“In terms of taking kind of the question further into mobile and its importance, what we’re seeing is that publishers with multichannel strategies really require a key domain to be part of that strategy.”
“And so even with mobile and the evolution, it doesn’t seem to be impacting, again, the value of commercial generic .com domains. ”
“The .com generic domains are really key elements of any large brand and for any new business coming online.”
“And we think it’s important as they look at kind of multichannel opportunities that include mobile that, that continues to be a key part of it. ”
“Nothing’s happened that changes our view.”
You always have to be very careful trusting the ‘insight’ of people whose entire business revolves around one thing, as it pertains to that one thing.
It’s like the domainers in 2000 who said that search engines would be second to people typing in generic keywords. Absurd, Ray Charles could see that wasn’t true but that was the narrative among those who wanted to believe what they wanted to believe.
I happen to agree with Marchex here, but their incentive to be Pollyannaish in their interpretation of facts is enormous.
Maybe I’m going to go out on a limb here but am of the position that new gtld’s are going to have a significant impact on the domain industry. I think .com’s will not hold their value over time and new domain holders that buy marketable domains and put a business behind them will also do well. The crowds may be sticking with the traditional web for now but the youth may be swayed by the popularity of new domains and new destinations that will dictate the future of the web.
In the US, 800 numbers are really hard to get today. But if given the choice when picking a toll-free number, I think most companies would likely want one (if they could get it) over an 866, 877 or 888 number.
I have an 800 number from a company I started in 1990 that, even though that company is long gone, I’m holding onto, just in case I want to use it in the future.
For this reason, I don’t see .COM losing its value at all. Everything that is first in a person’s mind, whether its a domain extension, search engine, online merchant like Amazon, or even something like the memory of a first relationship, never loses its value. You just don’t forget something that has had such high value and significance, overnight … or ever, for that matter.
Hello MHB,
” What happens when 1800 extensions spawn 100,000 marketing campaigns using a cutesy http://www.whatever.whocares that we all know will leak traffic to http://www.whatever.com? ”
Its called the Homogonization Phenomonon,leading to .COM Recognition Response in my observation.
Gratefully, Jeff Schneider (Contact Group) (Metal tiger)
Hello MHB,
R.E. = ” The crowds may be sticking with the traditional web for now but the youth may be swayed by the popularity of new domains and new destinations that will dictate the future of the web.”
My observation is whats important is what (Non HOLDER) Corporations of Monopoly TLDs stick with and reinforce in youths minds , that will dictate the future of the web.”
There will be both Domestic and International Backlash to these Monopoly TLDs, Bet On IT !
Hello MHB,
As Danny Welsh over at JointVentures.com has asked = ” What happens when 1800 extensions spawn 100,000 marketing campaigns using a cutesy .whatever.whocares that we all know will leak traffic to .whatever.com? ”
ANSWER = Its called the Homogonization Phenomonon,leading to .COM Recognition Response in my observation.
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
Grim
If you want to use the 800 number as an example, I’m find with that.
They are now called as a group toll free numbers and I can tell you two years ago when we were looking for a toll free number for RightoftheDot.com we wanted the number to end in ROTD and we couldn’t care less which number for the prefix we got.
The only one was available was an 855 number, which was fine with us
Hello MHB,
As the .COM backlash response takes hold on the MonopolyTLDs the bad PR Heat the holders of Monopoly TLDs will recieve will make them run from this whole Monopoly TLD Folly. The ship will be abandoned 1-2 years out. Time stamp this please.
Gratefully, Jeff Schneider (Contact Group) (Metal tiger)
Hello MHB,
The Chinese Ministry is itching for ICANN to slip up here. The implications for an Intl. takeover of ICANN almost happened once already. If they launch this (as is )I can gurantee Their foot on the banana peel will topple their domicile.
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
Hogwash!
from domannamewire dot com:
“It sold just $863,000 worth of domain names last quarter, which gave it $6.3 million in domain sales for the year. ”
Of course it will be hard to pin-point exactly how much the upcoming New GTLDs are affecting dot com sales to an extent, I am sure some investors are seating at the sidelines “the confusion and uncertainty” are there and smart money doesn’t likes that, we can’t blame the domain market SLUMP entirely to the economic crisis if in doubt look at the “stock market’ new highs…
As for MCHX: remember these are the same people that said the zip code’ dot coms were the next big thing…
I still think holderss of premium dot coms will do alright but you better have a cushion to wait for the long run…
Domo
These are Mwrchex words, I have a different opinion as well.
Yes Michael, Hogwash as far as the CEO’ words.
now more than ever it makes sense (specially to large companies) to somehow incorporate/complement “try to participate” in the selling/distribution of new GTLDs, even if only at the safe “shovel and picks” level …
hundreds of “mini landrushes” coming to the market.
Hello MHB,
The Trusted and most adopted Brand or symbol in World Marketing is the Universally appealing .COM Extension. It transcends Borders and languages and is used By all countries corporate ruling classes to Market to the Masses.
The markets are in a confusing uproar and are rushing to the .COM Control window to weather the storm ahead.Record .COM Sales and Joint Ventures are gaining traction as we speak. Just ask Ron Jackson where the traction and momentum is and it becomes very clear that the Smart money is rushing to the leading pole position .COM.
The Smart money is not sitting on the sidelines as some would like to believe. LOL
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
“The .com generic domains are really key elements of any large brand and for any new business coming online.”
“Nothing’s happened that changes our view.”
– those words are the facts
Publicly held companies owning .com’s is an oxymoron in my book 🙂
– there will be fire sales from these guys – but not because of the diminishing value of .com’s –
– bottom line is a generic / commonly used .com gives a small business a chance to compete with its larger competitors – that is what .com’s are – where all other non.com’s (except for maybe .xxx) are nothing more than a cleaner address to a business – i.e. SmallBiz.co vs. facebook.com/SmallBiz
R.E. = ” bottom line is a generic / commonly used .com gives a small business a chance to compete with its larger competitors – that is what .com’s are ”
I have to agree Brian
After all All the Big .COM holders got Big by Leveraging the tremendous amount of unlimited Traffic that courses through the .COM Channel. Its the largest traffic stream in recorded history which you have a Direct Connection to as a .COM Foundation Holder.
Good points Brian
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
@ MHB
These are Mwrchex words, I have a different opinion as well.
And what might that opinion be ? That the american public is going to support closed Monopoly TLDs ??
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)