Back on February 6, we posted a poll that asked readers to choose their interest level in the new gtlds. Readers had a choice of strong interest, moderate interest or zero interest. The poll ran til April 1 and in total 240 readers voted.
The results were :
- 132 Zero interest
- 70 Moderate interest
- 38 Strong interest
So now that the new gtlds have been out for over two months and new names are coming to general availability every week, has your opinion changed on the new gtlds ?
Leave a comment and thanks to all those who voted.
zero interest still
Zzzzzzzzzzzz
zero interest still
Most reply according to whether they are regging or not. I won’t be so still zero interest there but .buzz is the first one I’ve seen that depending on what was in front of it would tempt me to click.
Interesting to read about but I don’t view the new TLDs as prudent investments.
I didn’t think I would but then I thought if there is a chance to make a few dollars then I have to say yes, it’s worth the gamble.
It paid off for me for .co and .xxx
Zero dot interess
.co .net .com .org .shortcctlds (.ca .in) for the win!
Zero*Interest
(touch phone)
I’m interested in a few of them, but for the most part I’ll keep stalking .com expirations. Of course I’m not as dedicated/obsessed/knowledgeable as you guys, but I don’t think anything will replace .com as the TLD of choice.
I think domain investors, which are the large part of readers of this blog, should hold their zero interest position, because most registries are preventing arbitrage. Let’s see the new survey results, but I agree that they shouldn’t be interested.
The million dollar question: will registrants become interested in new gTLDs ?
Zero interest ….. well maybe unless it could impact my dot-com. I suppose if I owned SuperNinja.com I might consider Super.Ninja as brand protection. But , the more somebody else promoted Super.Ninja, the more hits my dot-com would probably get. ……. So, I guess I’m back to zero interest.
I’m not afraid to admit and actually proud to say that I voted Moderate interest then and I vote Moderate interest now. I’ve already had three profitable offers for new gTLD names that I bought already, but have not sold any yet, because the offers were from domainers and I know I’ll get more with some patience. The names I’m buying are mostly for outbound sales and will be over time.
I noticed at least one of these new names is averaging $0.30 a day parked, which pays for its renewal, and perhaps three others. If your curious, I’m buying names like a.repair, asbestos.contractors, lll.domains and safe.glass, without paying a lot of money. I’m pretty confident that with a little time, I’ll find interested end users who buy each and every of these names for more than I paid with a satisfactory ROI. Do your homework and buy names that have dozens of potential end users and advertisers.
At the end of the day, I already feel it was worth the risk, because it’s only a piece of my plan and it has some very interesting potential. Reminds me a little of some awesome wines I have aging in my cellar!
Zero
I voted zero interest before. If there was a 4th choice of “negative interest”, something even lower than zero interest, I’d pick that one based on what’s happened since the first poll. 🙂
George I am bit curious as to what has happened ? I know you are not a fan of the new gtlds in anyway, but I would say a bunch of so so strings have generated what ? Conservatively $50 million dollars, that may be real conservative but if we take it that people paid from $12,500 to $19.99 for an new gtld and I am using a number of 500,000 regs not the 552,000 that have been regged as not to include the Uniregistry domains that went into the root. 500,000 x $100.
I think there are going to be a lot of new gtlds that barely get by and maybe after their 3 year surplus not be able to make it, but there will probably be another company to just take that string and add it to their portfolio of offerings.
I think, and again just my opinion, the 10 most popular new gtlds from a registration standpoint and adoption as developed websites have not even been released yet.
Until we see what Google and Amazon do, I think its too early to say that a baseball game in the first inning is already over.
Bottom line is some people out there in the world are going to use these domains, now that does not mean that is good news for domain investors as they may all be handregs and registry auction wins.
Don’t be so fast as to count these registrations as legit paying Registrants. Unless a solid third party audit is performed by the likes of PricewaterhouseCoopers LLP.
We’ve seen how Frank Schilling did his straightforward, registered his own names and let everybody know about it. That way you discounted them; BUT what if the other Registries employed stealthy methods? I’m not saying that they did, we just don’t know. There have been fingers pointed at Beverly Hills Company that has been registering premium names similar to Schilling’s, which doesn’t appear to perturb the Registries. We also know that insiders who attended ICANN meetings in the past, such as Berkens have been extra-ordinarily lucky in securing names; and not only quality, but quantity as well. I just don’t see Berkens as a person that will be gong-ho in buying these names like that; if he wanted, he would have applied for his own strings. It appears the more insider you are, the luckier you are in securing these names.
If that is the case, then, we cannot rule anything in, or out, without more information. One thing is apparent, no Fortune 500 Comapanies are even gossiping about the new gTLDS, they are not trending on Google, Facebook, Twitter, Pheed, Local News, CNN…. my kids are not talking about them, neither is my Gardener, Tailors, Friends, nobody. Who is buying them?
So, your math about revenue is nothing but a guess work.
My position has not changed from zero.
@Joseph Peterson,
People read blogs religiously. Not necessarily for the topic. Most people are like me, they check everything out, comments and all. The currency is not in “interest”, but habit.
I think. Then again, once I thought I was wrong about something, and when I checked I was right; I was wrong.
@Domenclature,
I agree that cynicism is warranted in life — and particularly regarding the domain industry. Registries would naturally be tempted to inflate their numbers for the sake of domain-investor perception (for one thing). And it’s efficient for large companies to buy up media (including bloggers) who will pay them back with good will.
That these things are happening to some degree in some quarters seems indisputable. But not all registries or all bloggers will behave in the same way. Alongside bribes and Potemkin villages, there are authentic domain registrations happening and sincere opinions. As with all politics, the real story is to be read between the lines.
@Joseph Peterson,
Oh, I agree.
I’m saying the same thing you said.
Raymond: for many/most of these registrations, that registrant is the only person in the universe who wants it. That doesn’t make it a domain name that has any value as an investment.
Let me try to elaborate, as this topic of “domain name liquidity” and its relationship with valuation is something that I’ve been thinking about for a while. Domain names (like some other assets, e.g. art) have widely varying privately-held valuations by individuals in the marketplace for their own use. For example, I might value Example.com at $10,000 (keeping it, not for resale), whereas you might value it at $25,000, and Sally might value it at $4,000, etc. All those personal valuations are unobservable, for the most part (unless there’s a public auction, or something like that, where some market participants make bids, which *partially* reveal clues as to their internal valuations; e.g. I might bid $5,000, but I still haven’t revealed my true valuation of $10,000).
So, there’s all these people holding personal and private (unobservable) valuations. Because this is a marketplace where the assets can be bought bought *and* sold (i.e. traded), when making decisions we not only take into account *our own* personal valuations, but also try to take into account our expectations as to *other people’s* personal valuations. e.g. to revise things, even though I might value Example.com at $10,000 for myself, if I had very strong data indicating that there were 50 other people out there that valued Example.com at $75,000, I might use that data to revise my purchasing behaviour to pay more than $10,000 — e.g. I might step up and be willing to pay $25,000. I might pay $50,000 or even more (depending on my research, and risk tolerance). There’s uncertainty and probabilities involved in all this, clearly (i.e. the quality of one’s research).
So, ultimately there’s an entire statistical *distribution* of valuations, you can imagine some kind of demand curve, with the quantity of buyers vs the maximum amount they’re willing to spend. This is something that is *unobservable*, but which we can, through research, try to do a good job at estimating.
To give an example, there might be 1000 people in the entire world willing to buy AA.com for $100,000. There might be 500 willing to buy it for $250,000. There might be 100 willing to buy it for $1 million. There might be 3 companies willing to buy it for $5 million. And then there might be 1 company willing to buy it for $10 million.
When we’re making our acquisition decisions, we can’t just rely on that “long tail” buyer at the extreme edge of the demand curve. e.g. the “meet.me” sale, there might have been no one else in the entire world that would have bought it at that price. Obviously when Mike bought it, he paid much less than what he sold it for, but he had some ideas when he bought it that there might be someone out there in the “tails” of the demand curve. It was quite fortuitous, and in that case, paid off. There’s a time dimension involved in all this, obviously, too.
So, trying to simplify, we might ask, to try to use intuitive rules to guess at that demand curve, how many people out there in the universe would pay $100 for a certain domain name? Or $1000 for a certain domain name? Because one can’t observe or poll the entire universe of buyers (and since valuations are private, remember), one can try to simplify even further.
If one had a group of 100 “domain experts” (or colleagues, or whatever), how many in that group would be willing to pay $100? Or $1000? Sometimes, the decisions should be “no-brainers” for that group, at the $100 or $1000 level. e.g. if offered a 2-letter .com, *all* 100 of those domain experts (100%) would be willing to pay that $100. Even at the $1000 level, all 100 of them would be willing to pay it. You can imagine raising that price, just in this group of “experts”, and the percentages would start dropping, e.g. at $250,000, perhaps only 60% of them would be willing to pay it. And so on. We can then try to extrapolate these kinds of numbers (or our expectations at what the numbers might be if we ran it as a thought experiment) to the entire universe of buyers (i.e. “domain experts” *and* end-users alike).
If I ran that experiment say for a 3-digit .ca domain name at the $1,000 level or below, I think the numbers might be below 50%. If I ran the experiment for IDNs dot-coms at the $1,000 level, maybe only 15% of a group of “domain experts” would value a certain domain name that much. If I ran it for a .cn domain name, the percentages would once again be different.
All of this is trying to measure or estimate a demand curve. We’re all doing this, in one form or another. And remember, as I said before, time is also a dimension….long-term vs. shorter term (e.g. domain flippers have much different behaviour than others, because they’re focused on the short-term).
Now, before we get to new gTLDs, look honestly at *existing* gTLDs, like .com. There are 113 million dot-com domain names. How many of those would have any “liquidity” or “investment value”? Of course, it depends on how we define liquidity and investment value……all goes back to that unobservable demand curve.
But, let’s try to simplify…..suppose we got 100 domain name experts, and parsed through the 113 million domain names one at a time, and asked them “would *you* pay $100 for that domain name?” We record how many times we hear “yes” for a certain domain name, and then move on to the next domain name. Then, we keep only those domains where 90% of the experts said “yes”, throwing out all the rest. Of the 113 million domains, maybe only 500,000 would survive? I’d call those 500,000 (or whatever that number is) the “liquid domain names”, i.e. the ones I want to focus on acquiring. Of course, for many, I’d have to pay a lot more than $100, but at least there’s a huge consensus that they are actually in demand (and have value at slightly below a ‘no-brainer’ standard) at some bare-minimum standard. Others would have different criteria, clearly (depending on their risk tolerances, research quality, etc.).
Now, if we take a new gTLD domain name, even for many of the so-called “best” ones, you’re not going to get anywhere close to a 90% pass rate even at the $100 level (i.e. take a look at how many are sitting unregistered). Even if you take a look at the *registered* ones, that person might be the most extreme “long tail” buyer already, i.e. kind of like the “meet.me” buyer, or the “AA.com” theoretical purchaser for $10 million — i.e. no one else would have paid more.
In other words, if we try to picture the “demand curve” for these new gTLDs, most of the entire universe of buyers (even for the registered ones) is stuck at a valuation of $0. Even amongst “experts”, most of them would not pay $100. When we’re trying to estimate where the right-hand side of that “demand curve” stops, for a very large proportion of the domain names, it’s at reg-fee or less! In a lot of cases, I expect that a speculator/investor who purchases one of these domain names will simply be “left holding the bag”, because they thought that there was this deep demand curve (i.e. lots of people in the universe of buyers willing to pay more than $100, or more than $1000, etc.), but in fact what’s more likely is that the number of buyers at even those low prices is maybe 5, 2, or ZERO! What is the *cost* to waiting for those 5 buyers to “show up”? Or the cost to go out and *find them* proactively? (i.e. outbound sales efforts, phone calls, etc.) And remember you’re competing with the registry itself, and other gTLDs offering similar choices. What if the universe of buyers isn’t 5, but actually zero??!!
Registries can afford to sell that “worthless” domain name to that 1 person on the right-hand edge of the demand curve, at $10/yr, and that registrant will have little hope of seeing any value come out of it, as an investment (it’s more of a disposable purchase to them, a consumable item, rather than anything that holds long-term value). A registry can make a good business out of this (e.g. a million mostly worthless .mobi or .co domains out there; remember, even for .com domains, I wouldn’t touch more than 99% of them). A registrar can make a good business out of this. But, domain investors? Be careful.
For new gTLD registries, I think many of them believed that demand would be a lot higher. Now they’re facing the reality, namely that they’re going to have to spend a lot of marketing dollars just to find the reg-fee buyer (i.e. paying $10/yr or whatever). Or, they’ll try to engage in “low cost” marketing (e.g. spamming). That *reg-fee* buyer might be the entire universe of demand for the vast majority of domain names. As for the “premiums”, the same analysis as above happens, i.e. the entire universe of buyers at a given price level might be 5, or even zero! Good luck trying to find them!
I’m rationally choosing to not play that game, where the odds of success appear to be very low to me. And I’m not surprised at all that many others are not playing that game either, given how many times they’ve been burned in the past. Folks are rational, and eventually learn from their past mistakes.
BTW, I’m not saying that my portfolio is perfect. I’m sure that if I gathered 100 domain experts (since I can’t poll the entire universe of buyers to measure a domain curve) and went through each name, there are probably a bunch where less than 90% of those experts would pay more than $100 (e.g. some of the .ca names, or some “brandable 2-worders”, etc.). But, there are also many where 100% of those experts would pay more than $1,000. And a high percentage would pay more than $10,000 for some. And a smaller percentage would pay more than $100,000 for some. And so on. If I delved into the new gTLD space, I’d really be taking a big hit not just in *quality* but in *liquidity*. Giving up the liquidity of my cash for the uncertainty and illiquidity of new gTLDs, with apparent low demand and low expected returns? I can put my cash to work in better places, where the opportunities are better.
In conclusion, I’ll stick to the liquid “investment-grade” domains, and nearly all of those are in .com.
Thanks for the reply George, look I agree there is no liquidity and that most people domainers especially new domainers need to stay away unless they have a very high risk tolerance. I think for the very best names there is some opportunity that could play out in the longer run, as the net will change over time. I think for those who have been well versed in finding opportunity in alt extensions its worth a spec. Kind of like your portfolio is Blue Chip stocks and index funds but someone might want a penny stock to play around with, which they know up front is high risk, high return. I just think you have to have the best of the best, because you have been around a long time, there are companies that will occasionally make a meet.me type purchase. I would not mind own content.marketing or socialmedia.marketing, at reg fee or dress.sexy for example. I don’t think you can own anything less than the very best unless you are regging something for protection. I will say I am interested in .media, its a niche I have traded in for years and have a few media.com names that have gotten multiple offers, I would take those in .media just as a protection to not give a potential prospect the opportunity to trade around me and go with that over my .com.
I own 2 new gtlds, I am interested in .media as I said, and not sure I will go after anything else, not because there are not some other intuitive matches, but I am not going to pay up for something like you say has little to no liquidity.
Just as an aside, I noticed I used the phrase “right hand edge” for the demand curve in a couple of places….although in other places I used “extreme edge”, etc. Often a “demand curve” has price on the vertical axis, and quantity on the horizontal, although when I was first drafting my comments, I was drawing things out the other way (with number of buyers on the vertical axis, and price on the right hand side). So, in my “draft”, the right-hand edge would be that “high price” unique buyer. But, since many people would put price on the vertical axis, the “right hand edge” would instead be at the top left in that graph. I then edited out “right hand edge”, making it “extreme”, but missed a few places. 🙂 Anyhow, I hope folks didn’t get confused.
Moderate … Moderate.
Of course, the question will mean different things to different respondents:
(1) “Interested” in the sense of optimistically investing in nTLDs for resale?
(2) “Interested” in the sense of paying attention to discussions and developments within the domain industry?
(3) “Interested” in the sense of having a financial interest in nTLDs as a registry, registrar, market place, or broker?
(4) “Interested” in the sense of armchair curiosity … regarding how they might be used online?
First of all, anybody who reads blog posts like this one (and especially anybody who responds) is at least moderately interested in the sense of #2 — whether they say “zero interest” or not. Zero interest would have been not to read this blog post in the first place, right?
Of course, there is a lot of hype from people who are interested in the sense of #3. And some of us are skeptical regarding #1 (the investment outlook). So that makes the hype something of a turnoff for domainers, causing many people to round down to “zero interest” in protest.
Personally I’m “moderately interested” in all 4 senses. I’ve bought some nTLDs. I regard them as riskier than average investments, but I’m curious to see what happens to the internet.
Interested or not, these nTLD initiative is causing a big redistribution of spending within the wholesale domain market, and that affects any domainer who occasionally sells to other domainers. Such sales are less frequent now because some domainers are buying from new registries instead.
Moderate interest seems prudent.
Great points Joseph, thank you.
I came fresh and a bit wet-behind-the-ears to this, with a small pot of venture cash to invest for my future pension. I knew nTLDs would be a gamble but felt the old convoluted .com names which so many people seem to put an artificial value on have had their day. I was conscious I’d make some mistakes but treated this as a learning exercise. So, I’ve learnt that the long extensions like solutions, ventures etc are unlikely to make much impact, I even paid a premium price for managed.solutions and now realise this is too broad to be brandable. However, I’m optimistic that short, catchy names like hips.tips (for slimming) will eventually find a place in the new order. I’m in this for the long haul. Many domainers have their heads in the sand, still clutching at dumb sounding .com names that will eventually die away once end users see they have a real choice. I think it’s a mistake to group all nTLDs in the same bracket. Many will wither on the vine (.rich – ha!) but the city extensions have a bright future and will be highly brandable.
I am quietly registering some good direct nav and a couple of brand able. With caution and conservatively. I have not seen any organic traffic on the new names. Time will tell, bust or boom for some of the new registrars.
While I believe there may be some success stories with the gTLDs, there are far better places to invest one’s money. For that reason I remain at zero interest, not because I don’t think there will be successes, but because the successes will be so few and far between that investing in them has to be one of the poorest investment decisions one can make, reserved only for those who believe that investing in lottery tickets each week is a good decision.