I think it’s pretty clear that I am not really investing in the new domain extensions. More importantly than this, I think readers should understand why I am not investing because I do think there are some good reasons for people and companies to use the new extensions.
My domain portfolio is relatively small compared to others who invest in domain names for a living. I continue to maintain a portfolio of somewhere in the ballpark of 500 domain names, but probably closer to 400 domain names. I also tend to actively reach out to prospective buyers to sell my domain names. For instance, I bought BeerSigns.com at auction this weekend, and I already received interest from a few people I contact.
Even the most ardent new gTLD supporters and people within the space would likely admit that the vast majority of the domain name using public does not know about the new domain extensions or knows very little. I am sure registrars are trying to sell these new extensions and new gTLD operators are advertising their extensions, but it is going to take time to educate prospective buyers. When it is time to generate revenue from the sale of my domain names, I have no interest in educating prospective buyers about the new extensions.
One thing I have learned over the year is that it is hard enough to convince a person or company representative to pony up for the perfect .com domain name. You might own a valuable domain name and are in discussions with the company that is very interested in buying it, but they either can’t afford to pay close to your price or don’t agree with you on a valuation.
If I can’t sell a universally agreed upon valuable domain name to a company, I am not confident that I educate a prospective buyer about the new gTLD domain names and then convince that person to pay enough money to make it profitable and worthwhile. Even if I am able to do this on occasion, I have no confidence that I could build a large enough portfolio to replicate the model at scale and make money. Further, I would need to make this happen at a pace that makes it sensible to put my valuable .com portfolio on hold.
I would imagine the education process might be easier if there were great domain names available at hand registration fee, but it seems that most of the logical names have been reserved by the registries and have silly prices. Sorry, but I am not going to pay $x,xxx or $xx,xxx for a non .com domain name and pray that I can find someone before having to renew at a higher price than .com.
There are probably people out there who are willing to take a risk. If I operated a different type of business and had a portfolio of thousands or tens of thousands of domain names, it would make more sense for me to diversify. This isn’t the type of business I operate.
When I reach out to prospective buyers, I want to only have to discuss the price. It is challenging enough to negotiate a fair price for my domain names without having to educate prospective buyers about the right of the dot. I simply don’t have the desire (or patience) to do it.
I am not close minded about the new extensions, and I hope to see them become mainstays in weekly sales reports. I see smart uses of them, and I can only assume that will continue and grow. When that happens and the education becomes unnecessary, I could see myself investing. Until then, I will stick to buying .com domain names almost exclusively.
Agreed – it is challenging enough to sell .COM domains and much more so for alt TLDs as many end users utilize Facebook, Youtube and Twitter as their internet presence (with the same handle as your domain name). While one-word .COMs do sell for attractive prices, two and three-word .COMs and alt TLDs are a different story.
Just as an example, I own a two-word ten-character .COM where the service revenue to a typical customer could be thousands of dollars. There are developed sites on the .Org, .Info, hyphenated .COM, hyphenated .ES, some three-word versions, Facebook & Twitter handles, a CCTLD version, etc. But attempts to sell the domain to end users at $XXXX were unsuccessful. Domains continue to be looked at by the majority of individuals outside this space as $XX items and the thought of paying $XXXX or more is insanity – even though they will pay that much for website development costs. I recently received a quote of $599 for a one-page site and yet I have developed minisites with an hour’s work.
I hold zero new TLDs and I see no reason in 2015 to hold them as investments – far too much supply and very little end user demand at prices which justify paying premium renewals.
On the other hand, if registries want to offer them, I see no issue with them doing so and pricing them as they wish. Unfortunately however, the new TLDs have zapped domainer to domainer sales as too much domainer capital has been invested in new TLDs which might otherwise have gone to acquiring aftermarket domains in already existing extensions.
“I am not close minded about the new extensions”
…but you don’t want to educate your readers about why they don’t need to be investing in new TLDs.
Although it’s a matter of one’s particular strategy, this seems more of a personal choice. I don’t like lima beans, for example, but I would try – say – escargot. That makes me less of a meat and potatoes person, is where I’m getting at. 😀
Sticking to .com investments is a personal choice based on my business model.
On my blog, I make money from advertising. I write about all sorts of domain industry topics – from news to advice based on my business ventures and what I see in the industry and marketplace. I write about the new gTLD domain names because it is industry news or something I found interesting.
That being said, I see more opportunity to profit from domain sales by buying and selling .com domain names.
In short, as a domain industry blogger, I find the new TLDs interesting. As a domain seller, I am not interested in spending time trying to educate people about the new extensions.
Obviously, your strategy is something you’ve defined and found to be profitable and effective.
I’m curious about the very subject of your post though, because it conveys a message of indifference towards an existing, large, and expanding side of domain investing.
Twenty months after the launch of gTLDs, they are far from being a curiosity of sorts. Whether one chooses to invest large – like Konstantinos – or small, or anywhere in-between, gTLDs interest a large group of domain investors and have spawned companies directly or indirectly involved in this part of the industry.
Nobody is questioning why you don’t like pastrami when someone else does. The real issue is when you never tried pastrami, but you choose to ignore its goodness. 😀
“indifference towards an existing, large, and expanding side of domain investing.”
Why should I change my strategy when it is working? If I had an unlimited amount of money annually for domain name acquisitions, I would probably put some money into the new gTLD extensions. I don’t, so I focus on what sells for me – .com domain names.
“The real issue is when you never tried pastrami, but you choose to ignore its goodness.”
I think “goodness” is debatable. When I start regularly seeing 4, 5, and 6 figure verified cash sales reported in the new gTLD extensions, then I will likely agree about “goodness.”
I am glad to see people selling their domain names, but the overall profit is what matter the most. Anyone can make a multi million dollar business selling $20 bills for $18. If I sell a new gTLD domain name for $1 million, that’s great… unless I have invested $10 million and that is my only sale.
Having sold plenty of non-com TLDs over the years, I often wish I had spent more money when I could, to acquire others that were being offered. That lesson tells me that there is always a window of opportunity to selectively acquire domains that have long term potential. As a domain investor, putting all your eggs in one basket is not a flexible strategy, regardless of how effective it has been. The argument is over your statement about educating buyers: perhaps you must educate yourself first in order to educate others. 😉
” I often wish I had spent more money when I could, to acquire others that were being offered.”
I wish I would have bought 50 NNN.com domain names 5-8 years ago and put them on the market in 2014-2015. That would have been an 8 figure profit to allow me to retire and live on the interest.
Agreed, hindsight is always 20/20 😉 So why not seek out and invest in a select few gTLDs? You will gain experience in the process, and 5 years from now you might have a healthy gTLD domain portfolio that appreciated, or made a few such sales.
Another point: In its final years, TRAFFIC polarized domain investors due to its approach towards gTLDs. Other conferences such as NamesCon thrive on the diversity, and Howard’s new conference isn’t repeating the mistakes of TRAFFIC for that very reason.
The beauty of the new TLDs is in their variety: not two domain investors have identical inspirations about the keyword/TLD combo, therefore the field is still very open to mine.
I have n.holdings and n.ventures as investments. I also have Silver.ventures, which I could use but would be happy to sell.
I think the new extensions are good for registries and registrars. I am happy for my friends who work for those companies or who own/operate/manage them. I simply don’t want to invest in them right now.
I see value only for end usrs and only if a gTLD is for very specific and logical sounding branding purposes and supported by a well capitalized advertising and marketing campaign.
I think 99.99% of domainers investing in gTLD’s thinking their going to get rich will lose all their investment.
“When that happens and the education becomes unnecessary, I could see myself investing.”
Maybe by that the hot new gTLD would not be available. Who thought that ABC.XYZ could be hot? Business is all about taking risk and seeing the future before others.
I can buy in the aftermarket, just like I buy .com domain names.
When humans have too many choices, they get anxious due to uncertainty-overload.
Like you, Elliot, I chose to refrain from investing in the GTLDs, although I did register a few, merely to complement existing .com domains/sites I own.
I keep hearing the GTLD proponents (those who own registries, provide domain/legal consulting, and GTLD investors) claim the investment is a “marathon not a sprint”. This is the advice of Warren Buffett, who refers to value investing, and investing in companies with real products and solid business models, brands and customer bases, for the long haul.
I’m not sure there will be even domains in 5-7 years, after the IOT gains critical mass, and almost everything becomes an interface.
But I’m sure .com will have legs for some time, and if nothing else, will provide a calling card/brand identity, not unlike toll-free numbers.
I’m not critical of the new domain investors, those who jumped on the GTLD wagon. But they should be aware of the risks involved, and the routes may not reach their desired promised lands.
But shame on those who’ve been promising them great riches to board their trains.
gTlds entering GA in 2014 offered 3, 4 and 5+ letter terms @ reg fee $10 to $60. Premiums ranged $90 to $150 on multi-contextual extensions like .TIPS, .ZONE, .DEALS, .EXPERT, .CENTER, and .BUZZ whereas in 2015 the SAME terms are seen with $6000 entry premiums/renewal rates for extensions e.g. .Online. Not that .XYZ & .CLUB aren’t multi-contextual, but like .LINK & .CLICK, the surplus of categorical imperatives @ standard pricing is slim pickins.
I agree with Elliot.
I am investing in something that its working now.
I am not investing in something which maybe valuable in the future and by then I will have to pay constantly renewals without making money.
In the technology waiting is not always a clever move as everything can change very much and e.g. no one will need domains in 10-15 years.
Today we have over 100 millions .com`s and I am still able to buy them and make money so I am sure I will find some newTLDs when/if they become hot.
For now, no thanks – I do not live in the future but now!
You’re already paying for renewals, so that is so different? Not to mention, that if you aren’t writing off renewals as operating costs, you’re doing something wrong.
This isn’t a matter of “if” gTLDs will become vital alternatives to other TLDs, but rather, “when.”
Guess what: ICANN changed the rules of the game in 2012 and the future *is* now.
It’s all a matter of being selective with which gold mine you want to tap, not whether there is gold or coal. That argument has been settled, more than 7 million gTLD domains later.
A balanced diet includes every type of food, or you get some gastric problems. 😛
My .com renewals are under $10. My .ventures and .holdings renewals are much higher than that. I believe many new gTLD registries have much higher renewal rates than .com.
As far as I am concerned, it is a matter of “if” domain investors can make money from them on a portfolio basis (ie, one off sales are great but they don’t tell the whole picture if the investor stays in the red).
“It’s all a matter of being selective with which gold mine you want to tap, not whether there is gold or coal. That argument has been settled, more than 7 million gTLD domains later.”
Registries and registrars are likely doing well. I am not so sure about the people who invest in the new gTLDs hoping for profitable resales.
7 millions? If we look closer we will see that only few of them crossed 100k (among them freebies)
An extension with millions registrations can have very week recognition.
For example, .Co has about 2 million registrations and still most people have never heard about this extension.
You sum up all newTLDS I could do the same with .com, .net, .us, .mobi,.us etc but it would not show me which extension is profitable and successful.
There are many new TLDs but if some of them become successful in the future it will not be all of them – I am sure about that.
Apart from that average Joe will never recognize which ,.Co or .Eco, is newTLDs.
So its better to look at extensions individually.
I can pay renewals for .com domains – no problem. But there is a difference paying renewal for something which today is simply a question mark in every possible way.
Something which has no market, no many buyers, no recognition, but high renewal cost and very high investment risk.
Someone quoted Buffet above. I remember when Warren said that inactivity is sometimes the best that you can do.
Lots of those 7 million registrations were given away for free or very cheap.
Anyone want to guess what percentage of nTLD portfolios (non-registry) have generated positive cash flow over the last year?
My guess… 1%
Ten years from now it is possible things may change radically but I don’t see sufficient demand for the domains I already hold in .COM, .Net, .TV to justify speculating on what appears to me to be an enormous gamble (in nTLDs).
While this is true for .XYZ and perhaps .Berlin, it’s not accurate as a statement overall. Also, keep in mind that on average new gTLD domains are more expensive than TLDs, sometimes by a factor of 3 or 4.
Peter – Nobody is forcing gTLDs down your throat, either as an investment or as a curiosity element. The difference is, these options are here, since January 2014 and the numbers are analogous to each gTLD’s function. If you want them to be 120 million per gTLD, it won’t happen, but then again that argument is absurd in its conception.
I’m as “old school” of an investor as they come, but when faced with a new opportunity versus stagnation, I’ll take the opportunity.
Stop carrying the domainer mentality around as if the center of the universe are domainers; we aren’t. Entrepreneurs form their business on TLDs, ccTLDs and gTLDs – the latter is the new kind on the block.
Regarding renewals, you’re effectively saying that you’ll gladly renew *any* .com regardless of quality, but not any great gTLD keyword because they have to prove themselves. When that happens, you won’t have the chance to get these names – only in the aftermarket.
Elliot quoted Frank Schilling’s “taking risks” in another post recently. 😉
If you believe in new extension, invest and enjoy the earnings.
it is his blog. he is sharing his thoughts. Most of the readers of this blog have similar thoughts.
Please don’t torture us with your thoughts. Share them in your blog.
“Please don’t torture us with your thoughts.”
I don’t agree with all that Acro says, but I do appreciate it when he and others share their thoughts on various topics.
you generally do not use harsh words against anyone.
I don’t think it is called “sharing thoughts” when someone argued with the author and readers repeatedly just to satisfy his arguments.
one or two comments…fine…But, it didn’t look like that.
Anyway, we have to respect an experience person like him who achieved a lot in this industry.
“Lots of those 7 million registrations were given away for free or very cheap.”
I read somewhere that spammers are very happy about that.
I find it interesting just how polite industry experts are regarding these so called “new gTLDs” are. My personal view of these new concoctions can be summarized with the word “embarrassing”. It is very easy to convince a gullible person/organisation of the next big thing and in this case ICANN have proven a fool can be easily parted with their money. I personally remain very skeptical of any reported high value sales that are reported where these new so called gTLDs are concerned as I can imagine just how desperate some of these lucky new gTLDs registry operators must be feeling by now 😉
I agree with Elliot and would not waste a single cent on such garbage and neither would any smart business I know of.
People spend thousands of dollars at the Veterinarian, you wouldn’t waste your money doing that now would you? The fact that I don’t confront pet-owners throwing away money isn’t because I’m being polite, it’s because I don’t care. I see people smooching their cats & dogs on the lips, it’s embarrassing. gTLD skeptics are not the same….they REALLY are bitter, impolite, and driven to spend hours WHINING to an obvious extent beyond those who could give damn if you’re in love with an animal, if you want to waste $700 on a telephone or on hideously marked-up apparel/shoes when it all comes from the same factories that supply Walmart. Phones are FREE, use them and invest in a domain name that is appreciating in value.
We have dogs, cats and horses.
We’d rather spend 10 K on one of these pets, than one red cent on a speculative GTLD.
I just came back from Burning Man — I met only a few people who have even heard of the GTLDs — .xyz because of Alphabet.xyz and hooli.xys (because of the fictitious show “Silicon Valley”)
As Paul Graham who has incubated companies with valuations over $120 Billion, noted in his blog 2 weeks ago, “if you don’t have the .com, you’re an amateur.”
Last movie theatre I sat in was 1999 to see BlairWitchProject, you know the amateur film that set some sort of record. Look there’s no .com yet thats cured halitosis, only mitigated it. Nothing is stopping halitosis.today from delivering the cure. Hey, horses were great transportation, until .cars reduced time, distance, and the fly population.
It is my stance that the gTLD program purely exists for two reasons; to increase the value of .COMs and to generate as much money from the domain name system within a 5 year window from an unsure ICANN. The program is a win-win for ICANN and for most registries (who are also .COM investors), in the worst case scenario you break even registrations so you sell the rights to the extension and still profit. It feels like ICANN felt that mobile was a direct threat to domains, so they wanted to get as much money as they possibly could now before the internet took another shape that didn’t allow them for full control. I’m not saying mobile will kill domains, but I am saying that this whole program feels like what a company does when market saturation is high and there are technology threats to its stronghold – look at Eastman Kodak – Before they filed for bankruptcy in 2012, Kodak was so desperate for cash that they sold off their decades worth of patents. Sound familiar? Instead of trickling out a new TLD here and there, ICANN launched decades worth of extensions in order to generate money. Notice how the justification of the new gTLD system isn’t always explained so easily; people are charging huge sums for premium domains, so we will create new domains in order for people to have better access, and we will also be charging huge sums for those domains; including a higher renewal fee… wait… what? Even the most basic explanation for it makes no sense; there aren’t enough .COM’s so we will launch gTLDs. There are however plenty of .net, .org, .info, .biz, .mobi, and ccTLDs. The whole program stinks, and it’s at the expense of the general public, and the detriment of ‘new’ domain investors who are following blindly.
I agree there isn’t much resale value in many of the new extensions, and the renewal cost is usually a deal killer.
But.. If you can get a great one word domain with almost any new extension that relates to the word, you’ll be making a good investment. .examples: Degree.guru
I think .com is significantly better if your business model is to sell domains quickly. The gtld’s that I own get some inquiries but I think it will take years before the market matures and consumers are willing to buy at my prices.
Who cares of what you like or dislike in the first place. you do not like gtlds, it is up to you. i love them, can you blame me ?
Yes you are not forced to educate people about gtlds because you are not eligible or entitled to do so.
Do you have any idea, how many gtlds have been registered over 2 years and how many have been sold ? even .com did not sell any of its first 2 years !!
I do not blame you for defending your .com investment like many others do. but believe me, all those efforts proven to be useless recently because no one is listening to you and they are still registering and investing in gtlds which made your .com hard to sell. yes they are noticeable .com sales but it is nothing new to the market proving that .com will remain king. the world is changing. so keep hiding behind the past and soon you will be past.
gtlds are here and there and everywhere and many sites have developed them and got their way to rank in top of google search results. so it is only a matter of time until they are globally adapted by all nations. they are just something new like smart phones.
well, i think i am not suppose to educate you about gtlds either. right.
I would love to hear a follow up from you in a couple of years to see how things are going.
I hope you have the same level of success as others who make a living in the domain investment space.
If new gTLD domain names sell regularly by then, I am sure I will have many in my portfolio. Until then, I am content with my portfolio.
Today, I was gonna buy a cat and a tacky cashmere sweater, instead I registered Settlement.Agency for $16.
To those of us whose memories stretch back to the introduction of .BIZ, the first of the non Com/Net/Org TLDs, and supposed giant-killing ‘next wave’, the future is very clear.
The ‘Dot-Com is dead’ hype back then was beyond crazy, much greater than today’s newbie-TLD hyperbole, albeit with no other TLDs as competition at that time.
Where .BIZ is today is a clear guide to where most/all other non-CC TLDs will be, going forward.
good point of view,
but the question is what was done to lower renewal prices of ngtlds…. it seems there is no real ‘contact’ between registries and domainers.
btw, read this article about that man saying that.. “I tell them there’s no dot-com because our website went on a diet and lost it.” :))