Rob Grant: “Dot Titanic”

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Rob Grant is one of the “original” domain name investors, having built a great portfolio many years ago. He has also sold a number of high profile domain names, including TorontoRealEstate.com ($140k), and JacksonHoleRealEstate.com ($80k) among others. These days, Rob is probably more well known outside of the domain name business for being the father of Lana del Rey, but that is another story!

Without much of a doubt, Rob is a fan of .com domain names. Today on LinkedIn, Rob posted a poem (I think) called Dot Titanic. As you might imagine, the poem is about new gTLD domain names, and Rob has a pretty dim view of them and their prospects:

“New Gtlds are going down as fast as the Titanic – and taking most of their shocked passengers with them.

The hidden iceberg (and what nobody saw below the surface) happened to be a fatal loophole governing unregulated price increases for all new Gtlds.”

Rob has gone on the record to discuss the new extensions before. Here’s a quote of his from a DNJournal article dating back to 2014:

“I’ve seen a significant increase in the number of qualified and substantial offers coming in from brokers for the premium ‘.com’ real estate domains – this, paradoxically, as many of the new competing “real estate” extensions are just now being launched, most notably .realtor, and to a lesser extent .house, .home, .realty, .mls, .estate, etc. Over 23 new ‘real estate’ related gTLDs are scheduled to launch (or have launched already). As this growing clutter of new gTLDs overwhelms the public and the real estate industry, there appears to be a growing identity crisis among agents and brokers… and especially consumers.”

Rob’s portfolio of .com domain names is quite expansive. In addition to owning top RealEstate.com domain names in markets across the world (HawaiiRealEstate.com and NewYorkRealEstate.com to name two), Rob also owns domain names like Adirondacks.com, Marathons.com, and TropicalFish.com.

It’s always interesting to get the perspective of  people who have been in the domain business for a long time.

29 COMMENTS

  1. Did Frank captian the titanic into an iceberg, nobody was really saying much of anything until uniregistry came out with repricing, Rick S had been sounding off a bit, but the S### really hit the fan this past week.

  2. Thanks for posting this.

    Regardless of whether or not gTLDs are winners or losers, here are the problem that I (and, I suspect, other domain investors) have with propagating these opinions:

    First, three-years (or much less in many cases) is not at all a reasonable time-frame to gauge success or failure.

    Second, very few domainers have placed ALL or MOST of their bets on gTLDs: For people like me, I’ve put a certain percentage of my funds into (one of) them, and am placing a long-term bet on success.

    Lastly, it’s very condescending to have – even very successful people – preach to a sophisticated investor, in the name of ‘saving them from themselves.’

    For generations, speculators have bought penny stocks, junk bonds, and played the FX market – and mostly lost money. But SO WHAT? I’ve been in the markets for several decades and definitely took my lumps in multiple asset classes. And while my broker frequently advised me against making some of the riskier bets, …some of them actually paid off.

    Rob’s explicit point is a criticism on the (unexpected) carry-costs of certain domain names. That’s actually no different than being in a ‘margin-call’ situation, when you’re playing the game with borrowed funds. But the difference is that in the case of gTLDs, the holder’s need to ‘cover’ does not include them having to sell their home, or liquidate their other holdings: Them merely accept the price increases, or transfer/drop the asset.

    My main point is that there are risks associated with any speculative investment, and sometimes those risks are black swan (i.e., unexpected) events. But that’s all part of the game. So while I think that the sudden price shocks aren’t wise for building long-term loyalty from a customer base, your alternative is to deploy your investment capital elsewhere, and chalk-up yet another investing lesson.

  3. Everyone seems to forget to mention that the MAJORITY of .COM domain investors aren’t making great fortunes with .com’s either right now. Anyone who thinks they are is not aware of what’s going on in the demand side of the marketplace compared to years past. There are way more sellers than buyers. There are much lower offers for even great names.

    Most of the .COM’s being peddled aren’t even worth the reg fee. Lots of new domainers got sucked into the dream of fast money .com flipping. How is flipping these days? Yes for some maybe making a few bucks, but not fortunes, and most flippers are struggling to pay their $10 .com renewals.

    Some of the biggest players are selling gem .com’s for amounts much lower than they had originally anticpated and planned on. Some of the biggest players are quietly divesting and pruning their portfolios way down.

    I agree the gTLD space is loaded with clusterf_ck issues. No capital being spent on advertising and marketing. Too many .extensions that make no sense or have an exceptionally limited market. Too many divergent prices when a buyer goes to different registrars. etc. etc.

    Regardless, I do believe a handful of gTLD’s will survive the tsunami and will get global interest and strong investment validation eventually, beginning in a year from now. It’s going to happen because even in the worst of endeavors some entrepreneurs never quit, and those determined minds find a way to overcome every challenge and obstacle and succeed.

    • Funny you say that, I bid hundreds to thousands daily on aftermarket auctions, I am getting outbid 95% of the time, and not by a single bidder, the bidding continues on much higher. I have some funds to invest, and I am not bidding shy by any means. I am watching other auctions also.

      Yes, there are lots of domainers with crap domains, they THINK are great, but there are other domainers with GREAT domains, that have constant value.

      When you have names like advancedintelligence.com sell for over $3K in domainer auctions, I would not call that a soft market, try typing that on your phone without having a typo.

    • Who has ever made made on new or alternative tlds? .jobs, .biz, .cc, .info, .tv, .us, .tel. The list of failure is long, none have ever gained traction. The current batch are going exactly the same way as the prior lot.

      Whilst most .com investors lose money there is also lots of people who have made a comfortable living from it, that is the difference. There is no ntld domainer who has ever been able to claim that.

    • .com fortunes were not made overnight either.

      Took many years for the Internet to development commercially.

      In the beginning the landscape for moneymaking opportunities from domains was barren.

      The reg fees back then were $75 and higher.

      Many thought .Net was better sounding and had more investment potential.

      eCommerce took a while to work out all that sector’s kink.

      I agree we haven’t seen any great examples with other TLD’s yet, so we’ll just have to wait and see.

      It is fun and exciting for many domainers grabbing one word top keyword gTLD’s. Sometimes it’s not just about the money, and more about the game and the thrill of not knowing if you will be winning or losing.

      You can still grab top one word gTLD’s for a few bucks investment. Can’t do that anymore with .com’s. That’s the coolest thing about the gTLD space.

      In our hearts and souls we’re all like treasure hunters always in search of those magical gold nuggets.

    • Domains were originally $100 for two years and then a judge in 1997 said there was an illegal $30 tax on them so domains dropped to $70 for two years.

      You had to pay 2 years at once.

    • If you are going to state things like you are an expert and you know more than others, you should probably back it up .

      “Some of the biggest players are selling gem .com’s for amounts much lower than they had originally anticpated and planned on.”

      Please cite examples.

      Those of us that buy and sell daily are aware of market conditions.

  4. I agree with Rob. He made some astute early investments, especially picking up those prime real estate .com domains.

    & his daughter is a major talent and beloved by millennials worldwide.

    I thought there were a few decent GTLDs, but things don’t look good. Bottom line: just not the demand anticipated.

  5. New tld’s are not going away – well, not all of them. Rob does make a point that certain spaces, like real estate, became quickly cluttered because too many related terms were introduced too quickly (.condos, .estate, .house, .properties, .realty). And with .homes, .realestate, and .realtor on the way, the field will be crowded for that particular industry.

    As you glance at these similar strings above, several stand out as much stronger than the others. Those will be adopted, and become mainstays because they are powerful keywords/search terms. The contention by some that “no one is using the new tld’s” is ridiculous. But domain investing is truly a long term play.

  6. Other than.cn because it’s the most used ( even over.com ) in China I’m not sure except for brand protection why there’s any need to buy other than .com

  7. “fatal loophole governing unregulated price increases for all new Gtlds.”

    There should have been regulation. Without it, let the ship sink.

    • I wonder if it is really a loophole, surely ICANN considered the possibility of prices going “anywhere” with the contracts they had written, some sounded the alarm bells back then I believe also.

  8. I do not believe that many of the new domains will amount to much.

    Who is even using them? Have many major companies switched?

    Are any larger start-ups using them? No! Can you name five decent size companies that are not dot coms? Not likely.

    I do agree that domainers that made good money on dot coms took gambles on the new domains with a small part of their profits, as “you never know”. I bought almost none. I believe even the good sounding ones are worthless.
    People think to themselves, “it has to be worth 1500”. Nope. Time will
    tell though.

    If my life had not changed and I was active like I was years ago when I acquired many of the top .coms. I would have been in the bidding wars for the new TLD extensions. That is where the money was made.
    The earlier registrars made good money on non great new domains just from their fees. I believe event he early ones like XYZ, XXX etc are losers.
    Why do people think XYZ is so good?

    The higher end .com market is mostly luck. You need a buyer who has to have the domain. Domains under 2500 or so sell to people who need something decent for their company. The two and three letter and number domain market will bust sooner or later. Every bubble does in time. This market, at least to me is a total joke. Sure 888 or a two letter domains for a major company is worth the bigger money but most of the sales are absurd. Stupid. If I had any I would SELL ASAP.

    These days I have not sold many domains but when I get decent offers I am incline to accept. I have sent many letters and emails to companies who should own some of my domains with no results. GolfLessons.com is a good example. Top for its field. Huge business. 75K which is no money for it. No takers.

    Last year I purchased I think 5 really good domains.
    Why? Because they seemed cheap.

    To sum up stay away from ALL new domains and sell anything with short letters or numbers before they crash.

  9. “Toronto Real Estate” has only about 15,000 exact searches monthly (source: estibot), and he sold it for $140K? Very impressive.

  10. Its not the unregulated price increase ability that is killing the new gTLDs. They increased prices BECAUSE no one was adopting and they need to get revenue from somewhere. Giant companies will pay a few hundred or thousand a year without a thought to protect their online name.

    No one else cares about unused tlds.

    They have a new business model now. Not to gain adoption and use by the public but to mild defensive registrations for as much as possible, killing actual use even more.

    The reason for the new business model is they have been a failure. There are many reasons for that – premium pricing of good names for one, too many extensions that were unneeded, etc.

    • Exactly right scrivener.

      It is now all about defensive registrations. At the end of the day there has been no adoption. Big price increases aren’t what is killing the ntlds, it is lack of demand.

      The price increases mean that domainers can see the writing on the wall far earlier than they might have. Instead of losing $5000 over 5 years they could get out today with half the loss. They are getting a very clear signal that it is time drop these names.

    • Yeah. Who could ever foresee that a bunch of international bureaucrats would be unable to judge market demand, design product that customers wanted, and execute in a timely and effective manner?

      WE got DMV and the post office and are somehow thinking that they will make us richer. They polluted namespace with unused zombie extensions. People want one internet that is easy to use. 5,000 extensions are unneeded and confusing for users, so they will ignore them all.

  11. I have only gotten lucky selling a few .me names at a few hundred each like onlinecollege.me and smartphones.me, 2 nets, 1 info and dozens of coms over the years. I will stick with com 90%+ on buys in future.

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