Get your creative juices going.
A lot of people in the domain name industry are opposed to new top level domain names.
But their eventual approval is inevitable. Rather than focusing on what’s wrong with a massive introduction of new top level domain names, it’s time to switch gears and figure out how you can profit from it.
This is the first of a two part series of ways you can profit from the introduction of new top level domain names. It’s certainly not exhaustive but hopefully it will get your entrepreneurial juices flowing…
1. Be a broker for premium inventory
Startup cost: Low
A lot of new TLDs want to mimic the success some recent introductions have had with “premium” domain sales. .Mobi, .me, and .co come to mind. If you have connections to buyers then you can work on behalf of registries as a broker to sell some of these domains.
2. Respond to development requests for proposal
Startup cost: Moderate
I suspect many new TLDs will accept proposals for developing some of their premium domain names. This is a great way for them to get some of their top domains developed rather than just registered and parked. (Ultimately a new TLD’s success depends on people actually using the domain name.)
This is tricky for a web developer. A proposal might require significant development resources and an advertising budget. Hundreds of new TLDs coming online at the same time could lower the bar that TLD operators have for handing out domains to be developed. At the same time it will make it harder for your new web site to stand out. If you offer to develop baseball.sport, you may be competing with base.ball, baseball.games, baseball.web, and baseball.shop all launching at the same time.
3. Start a domain name registry
Startup Cost: High
The biggest winners in the two years after new TLDs launch are registries and registrars. They’ll collect each time a domain is sold.
But the registries have another trick up their sleeves. When some backers of these new TLDs throw in the towel (and many of them will) the registries serving them will often get to run the ghost registries for them.
This is a profitable game. The big cost in getting a new TLD going is the upfront application fee and the marketing. Once the initial part is done simply maintaining a TLD isn’t too costly. It can be very profitable for a registry to run basic operations even for a TLD with a small number of registrations.
4. Buy a Domain Registrar
Startup Cost: High
New TLDs will create a boon for domain registrars in the first couple years. Especially for brand protection registrars.
Go Daddy has even devised a system to get new TLD backers to pay it every time it displays the new TLD as a purchase option.
5. Be a New TLD consultant
Startup Cost: Low
OK, so everyone and their mom seems to be holding their hat out as a new TLD consultant. If you’ve left ICANN or a registry in the past 12 months odds are you are now a new TLD consultant.
This creates an interesting opportunity for domain investors. Monte Cahn and Michael Berkens started a new TLD consulting company that’s very different from the others: it will help these new registries market their domains.
Most other consultants have expertise with the application process, navigating ICANN, getting a registry contract set up, and working out deals with registrars. They don’t have much experience marketing domains, especially to domain investors.
6. Flip Domains
Startup Cost: Moderate
Flipping new TLDs is going to be a difficult game. There will be a lot of competition for the same second level domain name you’re trying to sell.
Just as I predict new TLDs will suppress values of existing .com alternatives such as .biz and .info, I think premium keywords at the second level for new TLDs will have a tough time gaining value. It’s a simple case of supply and demand.
You can also expect many of these new TLDs to capture the premium value for themselves. They’ll auction premium domain names or use differential pricing similar to .tv.
Still, there will be opportunities. And some savvy domainers will find them.