The telegraph.co.uk has published a featured story on an interview of .XYZ CEO Daniel Negari in a story entitled “Fierce struggle for internet’s future is like Wild West” with the subtitle: “The floodgates have opened for billions of new domain names to rival the iconic dot-coms, prompting a ‘Wild West’ land grab. One successful speculator, Daniel Negari, talks to the Telegraph about the profit – and lawsuits – it’s brought him”
Here are the more interesting quotes from the story:
“Entrepreneur Daniel Negari launched a start-up in the US based around his purchase of dot-xyz and dot-college. The former has already made him $6.4m”
“He has “several” others that he’s bought from the original winners on the open market that are yet to be announced.
The competition is “fierce”, says Negari, and has created a “Wild West” scenario where investors are making a land grab for the future of the internet.
“His company, gen.XYZ, has been created to monetise his TLDs by selling domains wholesale to registrars for $8 each. Dot-xyz already has 840,000 registered domain names; they’ve sold well in emerging markets where internet users are not conditioned to see dot-com as the only reputable choice.”
“In China for example, the letters dot-com don’t mean anything to them. With dot-xyz, it also doesn’t mean anything, but at least they can remember it because they know their ABCs,” Negari said.
He believes that the new TLDs “will slowly chip away at the dominance” of dot-coms. “It gives people a better naming option.”
The problem being that dot-com has been around so long that it can be hard to claim short, memorable domain names that haven’t already been registered.
Promoting this issue has caused problems with the company that manages dot-com, Verisign; it’s suing Negari for false advertising over a video (shown below) which claims it’s “impossible” to buy the right dot-com address.
The lawsuit also takes issue with claims that dot-xyz is the most popular of the newly-launched TLDs. They argue that many of the 800,000 domain names were actually given away for free to make it look more popular in league tables of registrations.
“This is the Wild West,” said Negari. “There’s upstarts like mine that are coming out and saying ‘hey, dot-com, we’re here to play’, and then the 800lb gorilla’s pounding on its chest and saying ‘oh, we’re just going to crush you’.
“That’s why they’re suing me, right? If you read the lawsuit it’s pretty much rubbish. It’s focused on them trying to bully me, to be unfair, to slow down the competition.”
Verisign has not publicly said what it’s motivation was for bringing the action, and was not willing to provide a comment for this story when contacted.
Negari denies claims that he gave away domains because of any ulterior motive, and says that even once they’re removed from the equation dot-xyz is still the most popular new TLD. It would have around 500,000 registrations compared to the 200,000 under the second largest, dot-club.
“They’re suing for false advertising, and that’s one of the items… claiming that dot-xyz is actually not the number one new domain extension, when in reality it is, even if you take out the free domains. We’re still number one by far,” Negari says.
“That was a registrar promotion that we had limited involvement with. The registrar came to us and said ‘hey, we want to buy a certain amount of domain names’ and we were like ‘great’. And then they decided to give it away to their customer base. I’m not going to say no to that.”
Despite the problems surrounding the lawsuit, Negari hopes that dot-xyz will become as common a sight online as dot-com is today, and that such expansion is vital because of the increasing number of people online and soaring demand for domain names.
“I think that over the next five or ten years there’s going to be over a billion domain names in existence, and right now there’s 300m domain names in existence,” he said. “ There’s people in China coming online today who have never had reliable internet access.
“My dream and my passion behind dot-xyz is for it to truly become for every website everywhere. We made my application fee back in a few days, really. It’s been an amazing run. The economics of the business are fantastic. There’s no better business in the world.”
Noor Manji says
Mike,
In your opinion, do you think the new gtlds will lower the values of .coms few years down the road? or will it actually increase the value ?
Bryan says
Noor the GTLD and .com realms are not exactly equal you have .com with the grandfathered $8 renewals regardless if you own dog.com or dog3907u43980uy9ei.com you pay only $8
Now with the GTLDS if you have something premium I have seen prices of upto $110,000 for annual renewals, for the most part you are in the $250 – $5000 range for the top notch names in the string, if they are not already reserved.
So really they will never be equal, .com is integrated into society, and marketing to a memorization T, GTLDS still have some work to do. You are looking at least 5 years out before you see major changes, now if you want to invest your money in such a space, then it is your’s to lose lose or gain from just like any investment risk.. The domainer has a disadvantage in the fact if you are carrying premium domains at say $500 per year, in year 5 you will have paid $2500 in renewals already, and against a broad portfolio that is required you will have difficulty breaking even. There are a few dozen guys who have tried it, and you can ask them Year 2, they are second guessing carrying all those premiums.
Acro says
Could this be related: 840,000 domains X $8 = $6,720,000
The article does not make reference to profit, this is revenue.
Jagan says
Good catch Acro.
Anticareer.com says
Love to see a cash flow statement and see how much of that $6.4M actually got deposited into a bank account and how much of that was ghost sales producing no cash. This guy is a smoke blower.
peter says
We all know how much rubbish he has talked already.
I think his renewal maybe tell something , but people have to be careful about that too as knowing horse boy he will come up with a new crap that changes real numbers.
Michael Berkens says
I agree the $6.4 made is revenue not profit
M. Menius says
In the most recent Domain Sherpa interview, Michael B. mentioned a number of new TLD spaces that had been given away by the registries in their initial promotion. It was more than just .xyz. In lieu of the questions around new tld’s, it would be great to have actual true numbers on legit registered domains – minus these freebie promotional giveaways. The freebies radically skew the numbers and the public’s perception of market adoption.
Domainer Extraordinaire says
In a video interview I saw Daniel lead the interviewer to believe he sold 800,000 at $8 a pop. Did this interviewer assume the same or did Daniel just out and out lie?
Gary B says
This guy is a canival barker. Sometimes that startegy works. Sometimes it just make you a carnival barker.
Bryan says
The only domain Daniel needs is Clown.xyz because that is what he comes off as, I have a few .xyz that were placed in my NetSol account that I am waiting the day that they delete, most likely he will find a way to renew them, but his registry will be in for a shock of a lifetime when hundreds of thousands of domains delete.
This is really a circus, .science, .berlin were others that gave away free domains also.
I kept an open mind about GTLD’s, and know enough when the people pushing them have to place free domains in your account then claim $6M in profits, then do not want to discuss financials since they are a private company, it really becomes comical.
John McCormac says
The problem for .XYZ is that it has to maintain the velocity of new registrations if it is going to cope with the deletions from the opt-out registrations and discounted registrations. The opt-out registrations are effectively no-demand registrations. Most of them end up parked on PPC and unused. Traditionally, discounted registrations can have a retention/renewal percentage of somewhere between 6% and 20%.
John says
1970’s: “XYZ” = eXamine Your Zipper
Now: “XYZ” = eXamine Your Zone