Domain Name Wire

Domain Name Wire

  • New TLD proprietors should not rely on domainers for much revenue

    1. BY - Mar 16, 2012
    2. Uncategorized
    3. 19 Comments

    Sorry new TLD operators, but domainers don’t have much money to give you.

    Launching a new TLD? I hope you don’t have a big line item for revenue you’ll make from domainers registering your domains.

    I’ve written about this before, but want to stress it again: there’s not enough money to go around.

    Yes, domainers have been there to prop up launches such as .eu and .mobi in the past.

    But a couple things are different this time around:

    1. Domainers don’t have as much cash to plow in to registrations as they did pre-2008 (when the PPC market burst)

    2. You’ll have a whole lot of competition

    For illustrative purposes only, let’s say domainers tend to invest $10 million in registrations during landrush and initial general availability for a “new” TLD. A new TLD typically comes around once a year or so historically.

    Now let’s say we’re looking at 100 non .brand TLDs coming out in a span of a few months.

    For domainers to have the same impact across this many TLDs, they’d need to invest $1 billion. That money doesn’t exist. (Even if you assume domainers only invest $5 million, the same ridiculous math holds true).

    Sure, they’ll spend more than the $10 million in aggregate, but there’s a limit to their collective pocket book.

    The net result is you should expect a depressed number of registrations from domainers and lower prices for “premium” sales.

19 Comments
  • ccTLDs can be re-delegated and are therefore lower risk than purely commercial new TLDs. All but one of the last eight ccTLD releases or re-releases have been so anemic as to point to the fact that not all .LLs are created equal. .FR was apparently the sole exception out of the eight.

    If a new TLD offers some fancy new features, then perhaps there will be some investor interest. But with a follow-on ICANN window for additional TLDs coming in as little as two years, that interest may be relatively slim.

    The biggest opportunities in new TLDs will most likely be in the IDN field, which requires expertise that few Westerners have.

  • Yep, I was doing a similar analysis in my head a few days ago, and things look bleak for them. They’ll also need to “pay for placement” via “shelf space” at GoDaddy, NSI, eNom, and other registrars. .xxx, for example, is #10 on the GoDaddy drop-down listbox.

  • They can not be anticipating domainers to buy/speculate on the new tlds.

    They will have to go the route of .pro.

    However, maybe I’m wrong. Look at the profit the .co and .xxx registries made.

    The new tlds will be coming to market just as all of the premium .xxx and .co start dropping.

    I’m done going off on tangent tlds.

    • @ Meyer – .co and .xxx may prove the point. They also got a bit of domainer money. But imagine if they were competing with lots of others at launch? Neither would have gotten as much domainer money. (.xxx may be somewhat of an exception given that I don’t anticipate any other adult TLDs coming out. But it still wouldn’t have taken some sort of hit.)

  • When it comes to the new tlds will be better to invest in the tld holder’s stock if the tld looks interesting than their domains.

  • Shelf space is physically limited and there is already an oversupply of offerings for the premium space available. If anything premium shelf space is actually likely to decrease if the stores have their own vertically-integrated offerings to promote/hype.

  • It’s just an issue of too many TLDs. I can imagine a handful of them being actually useful (say, .web), but the majority will be overlooked by domainers and developers alike.

    This new gTLD business is going to blow up in ICANN’s face as a huge disaster.

  • .co and .xxx has a mass audience world wide, where.something(generic english) it’s limited.

    I for one i would not buy anything.

  • Good, lots of low cost, good names for end users who want to use them and develop sites.

  • Many new gTLDs don’t rely on big registrars or domainers because they have access to their potential clients. That is the real breakthrough. When you launch .co, you cannot anticipate who you will have as clients in the whole world, so the marketing focus on branding and registrars. For .golf (as an exemple), the 1 m potential buyers are easy to touch by MD and interactive marketing, at low cost. So the only thing that is sure is A) the new registries will much more creative and agile in their marketing, creating new rules and B) managing a portfolio of gTLDs is the solution to build a sustainable business and there should be many failures in the mono-gTLD registries category.

  • I do agree with Tom G. Every new gTLD has to create awareness with end users. Just setting up parking pages and listing the new names on sedo won’t help much to build a successful new TLD in the long run.

    – Florian

  • I don’t think many people realize just how hard it is to create awareness on a worldwide scale; it’s an enormous and expensive exercise which will take years and years of planning and execution.

    The only open gTLDs which are likely to have any real prospect of success even in the medium term are those which offer a service to an existing real world community with it’s own sense of identity and common purpose.

  • Vertical Integration is a Game Changer.

    Many new gTLDs will not even try to get their tld on GoDaddy. They will operate their own registrar, market to their niche and register names, host sites, etc.

    Traditional registry business models will not be successful. Most of them understand that. The ones that don’t will have a rough go of it.

  • Previous TLD launches, like .CO and .MOBI, were mildly successful in the short term only because there were years between launches, and domainers’ specualation carried them over the line. Dilute the domainer investment pool between 10, 20, 50 or 100 simultaneous launches and the result will be bankruptcy for most. Several TLDs have struggled with bankruptcy, .TRAVEL being one of them. Think of all the existing TLDs that are stagnating (.COOP, .BIZ, .ME, .IM, .TV, AERO, .MUSEUM, even .XXX and .CO) and then cram in an extra 100… No wonder NTIA doesn’t want ICANN to run the show anymore.

  • Many new tld operators may not even want to do open registrations for their tld. If existing companies like Dell .dell or IBM .ibm get a vanity extension, they will just use it for their own purposes. How many of the new tld applications are planning to do open registrations? I am only looking forward to seeing a .web

  • How about .fail? says:

    March 18, 2012 at 2:44 pm

    After learning the mind boggling leakage stats involved in Rick Schwartz’s WIPO case, who, in their right mind, would ever want to use an alternative gtld as the basis of their business? A bad idea that is clearly doomed to .fail, if you ask me.

  • It will take people (In the United States) time to get their head wrapped around the idea that every web address does not necessarily end in .com.

    I do not underestimate the human ability to adapt quickly.

  • Not having domainers invest in the new gTLDs would be a good thing for the new registries. As far as I can tell, domainers buy a huge amount of the best names at landrush or launch and then take the time to develop just a few and park the rest, diluting the value of the domain for end users. If registries are smart, they will discourage domainers looking to park tons of good names and sit on them and let real users develop them and create new gTLD value.

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