Here’s what happens in the domain investment world whenever a new top level domain name is released.
Every time a new top level domain name comes out — be it .mobi or .tel — I see a similar cycle of “fanboys”. I think of “fanboys” like those Apple fans who think the company can do not wrong. Like Apple fanboys, domain fanboys blindly drink the kool-aid, only to be disseminated later.
It follows a similar trend every time, regardless of the domain.
Phase 1: Quiet acquisition of domain names – during this period, the fanboy pays attention to buzz about the new domain name on forums. They particularly look for any “big name” domainers that might be buying domains in the TLD. The fanboy starts to hand register and perhaps acquire some domains in the TLD, but keeps quiet about it. He’s amazed at the good keywords available; keywords that would cost six figures in .com.
Phase 2: Gloating – during this phase, thefan boy goes around to several forums talking about how they got some great domains — such as money.tld, england.tld, etc.
Phase 3: Pumping – now that the fanboy has spent lots of money on the tld, (s)he makes sure to promote it and make other people feel like they missed the boat, and they must buy now. The fanboy realizes he isn’t making anything from domain parking, of course, and will need to sell the domain names to make money. He will make numerous comments on forums and blogs about how everyone else “missed the boat”. Of course, he’s willing to let you in on the action if you want to buy some of his names. The pumping phase is particularly long, because the fan boy has nothing else to do with the domains other than to promote them.
Phase 4: Quiet worry – not having sold many of the new domains, the fanboy starts to wonder if he has lost his investment. Maybe development is an option? What happened to the secondary market? Where are all of the big buyers? Should I look at history to understand what happens to the value of these new TLDs? The Fanboy is disappointed that major auction companies reject his domains for auction, buyers are few and far between, and Esitbot doesn’t understand the potential value of these domains.
Phase 5: Blame – realizing the new TLD won’t create quick riches, the fanboy starts to blame the registry. “The registry isn’t promoting the TLD enough!” they yell.
Phase 6: Disillusion and the “give up” period – those same fanboys who left dozens of comments about how this TLD was the next great thing suddenly return to leave dozens of comments about how “this TLD will never amount to anything”. This phase can overlap with phase 5. After all, there’s plenty of blame to spread around, and certainly none of it should be pointed at the domainer who invested in the TLD with hopes of quickly flipping his way to millions.
Phase 7: There’s a new TLD coming out! It’s going to be awesome! Rinse and repeat phases 1-6.
Domaine says
Great stuff 🙂
Tim says
Pretty funny. Now do one for the “pompous, know-it-all domain blogger.”
Andrew Allemann says
@ Tim – I don’t know any of those 🙂
rob sequin says
Ouch!
Although I was never quite a “fanboy” of .mobi, I did like the extension and I did make money speculating.
The trick is to sell into the frenzy. Maybe keep a few good ones in case “this time it’s different” but sell when people are buying.
If you look around and no one is developing then the new extension has no legs.
mike says
hahahah .tel
Will says
@ rob – Agree that what makes the real difference long term is watching the actual end-user use of names. Adoption of an extension beyond domaining fences is what is important.
Watch what new websites real world companies put up in addition to their main site. A new extension doesn’t have to be = to .com to be successful. And any full scale adoption won’t happen in just a short time.
The attention span of domainers in general and domain flippers is glaringly short. Everything other than the obvious old established extensions are deemed a “failure” in many CNO-only eyes. It’s easy to tout the obvious established and dismiss everything else. And many just make sport of it.
The possible introduction of 100’s or 1000’s of new domain extensions will dilute the entire domaining market. If you have very good keyword term .com names that’s good for you too. Yes you’ll get extra traffic for a while. A few of the large ccTLDs (e.g., .de & .co.uk) can be used as an example of how adoption and use of non-.com domains can preempt other extensions. Globally, .com has competition.
However many of the average and borderline quality .com names held undeveloped by domainers just because they are .com are not going to enjoy that extra competition.
Things keep changing. Always interesting.
Zack says
You have NO right to bash these extensions with your unfounded representations!!!
You old school dot commers think you know everything!
Just kidding. How many times have you heard this?
Kate says
So true.
Steve M says
Being a domainer is never having to admit you own any junk domains … in any extension.
Joseph Slabaugh says
lol I sold 1 of the 2 .eu’s that I registered in an auction and made 1000 on it, so I was OK with that one, but I normally do not pay too much attention to new extensions.
Anthony Mitchell says
Why yes, this song is about me.
Matt says
You left out one important element of the pumping stage; attempting to stifle the speech of detractors. This ranges from not approving negative blog comments to forum mods abusing their powers.
Having mod powers on forums is a huge asset for this stage. If a mod is a pumper, negative posts are going to be scrutinized for potential removal and aggressive naysayers will be targets for strategic banning.
I once made a post on a major domainer forum in a thread about LLLL domains and the entire thread (which was mostly negative) mysteriously disappeared. At the time there was a moderator that was heavily invested in LLLL’s and in the process of trying to unload all of them. I have no doubt that he is the one who had the thread killed.
Live Domain Name Chat says
This is a great read.. and so true!.
Poor fanboys..
JLouisBiz says
That is just another story for the article, and nothing of the thorough research. You express your feelings of what you think that you understand, but that is far away from reality.
Ever Top Level Domain has its marketing by the registry and such marketing can be good, excellent, money bringing, bad, misleading and so on. Registry certainly does make a difference.
This article is just an expression of your resentment and generalization, and flat spread out of negativism.
Samit says
Totally correct.
Had mentioned this a while back:
http://www.mwzd.com/domain-names/the-dotasia-debacle/
Same holds true for most new TLDs being launched and the 100s or more soon to come.
jac says
Interesting and informative – thanks
Joe says
Hope this won’t happen with .co 😀
Sa, says
I think you are pretty close to the mark. The only thing I don’t agree with is phase one “the SILENT acquisition of domain names”. What I see is phase two from the minute open registration happens. The statement that always cracks me up, “I can’t believe it was still available”.
Thats me says
Oh my god , the discription fits me so bad , i need to go and cry .
Robbie says
Let the cycle continue with .co! How long will it be?
Em john says
Conclusion: Never buy a new TLD. There should be rules against companies trying to promote a new TLD. In fact, get rid of all TLDs and cctlds that don’t have .com in them because they are worthless. Let .com prevail, monopolistically, and allow all .comers their due right to Internet uber-rulership of the online universe.
GMAB. Even .com kingpins have been investing in new extensions as they have come out. They are spreading around their eggs a bit. That’s just smart business. No risk, no reward. Not all investments will be good ones. Maybe ask Rick Schwartz about flowers.mobi. Pretty sure he has made some bucks in other areas.
I think there is some truth in your “cycle” scenario but investing is not so black and white. It contains a lot of research for both short-term and long-term profit.
If a person doesn’t know how to diverify, it might be a good skill to learn. With IDN.IDNs, .xxx and the like coming out, and who knows what in the future, maybe its wise to diversify as share of the internet real estate space gets spread out. As more idn.idns come out, .com will become less important or “must have” and so will the other extensions.
Loki says
Don’t forget the Robin Hood types. I remember reading some .co hypers talking about how companies could switch in droves to .co so that they wouldn’t have to pay .com extortion from squatters. Yet these guys were squatting as well just at 30% of the .com value.