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TrueName by donuts. Make a name for yourself

6 new TLD auctions bring in average of $1.5 million each

How much do new TLD applicants think their strings are worth? We now have a rough idea on a half dozen.

The first six private top level domain name auctions held by Innovative Auctions have closed, bringing in a total of $9.01 million in winning bids.

The six domain names no longer in contention are .club, .college, .luxury, .photography, .red, and .vote.

There’s one common participant amongst all of these domains: Donuts.

Donuts, which applied for 307 top level domains, committed 63 domains to the first round of private auctions. It appears only six of them had takers — at least at this point.

We know that Donuts “lost” the auction for .vote as well as .club. I’m tracking down the results of the other auctions, but we might not find out until applicants withdraw their competing applications.

I put “lost” in quotes because private auctions don’t really have losers. The unsuccessful bidders leave with a bunch of cash.

I suspect Donuts chose the first 63 domains it committed to auction wisely and with a great deal of strategy in mind. Does it care that it lost .vote? Does it care if it lost all six of these, if as a result it has close to $9 million extra in the bank?

With the exception of .club, all of the other domains had just two contenders including Donuts. The proceeds from .club were split two ways. In the other cases the unsuccessful bidder gets the entire purse (less fees).

Even if Donuts lost all 6 (and I have no idea if that’s the case), and even if .Club was bid higher than the others, the company would easily have an extra $5M-$8M to compete for strings it may care more about.

None of United TLD’s five domains committed to auction appear to have been settled in this first round. Three of them are in contention with Top Level Domain Holdings, which has said it may participate in auctions — just not the first round.

This will be a very interesting process to watch unfold.

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  1. Adam says

    Lol,

    Seems to be like it would’ve been worth the $185k application fee for any company to bid on the new gTLDs, just so that they can forfeit the private auctions and get a bucketload of cash.

  2. Constantine Roussos (.MUSIC) says

    Indeed Adam and certainly agree with Andrew on raising “free” extra money for the big strings. Make no mistake, all of these developments were carefully planned by some of the portfolio applicants well in advance. A way to win when you lose. Nothing is accidental. What is going on is quite obvious: circumvent ICANN auctions through private auctions in a ponzi-type system which “benefits” everyone except ICANN, the global public interest and single-string applicants (unless they agree to bribe the portfolio applicants to withdraw in such a manner), collect as much money from mediocre TLDs with less contentions (and more likely to enter into a private auctions) and then use that money to win the big strings such as .WEB in the ICANN auctions. This is why the domain industry does not have the best of reputations: new rules were fathomed that are not in the ICANN Applicant Guidebook (private auctions) to avoid the “real” auctions which are mentioned in he Guidebook. This system financially enriches some portfolio applicants who are well positioned to gain while ICANN is turning a blind eye. Some portfolio guys might say they have nearly “unlimited” sources of cash but one thing is certain, the ROI does matter and no-one will be wasting money since it is investor money and a return is expected.

    Congrats to the .CLUB folks for winning though. Colin’s company, which only applied for one TLD – .CLUB – seems to have a good plan for .CLUB and wish him the best.

  3. DNhow says

    Why would companies even touch these domains? It’s just like all the other TLD releases. Stay away but great for the registrars!

  4. Frank Michlick (DomainCocoon) says

    @DNhow: Great for the registrars? I’m not convinced yet, as it’s expensive for registrars to prepare for offering the new TLDs, there’s a new agreement (RAA) with ICANN to sjgn that includes costly addresses verifications etc that need to be implemented…. Deposits to be paid with all of the new registries and so on custom extensions to the protocol (EPP). Remains to be seen if it will bring additional money after all the cost.

    • Andrew Allemann says

      @ Frank –

      I argue that the big registrars will

      a) not have to pay any deposit with new registrars and demand post-registration billing

      b) Only accept standard EPP and registration set ups

      c) accept lots of cash to help market new TLDs, at no cost (and a benefit) to them

  5. Frank Michlick (DomainCocoon) says

    @Andrew: Probably this will all be the case, but if you listen to the new gTLD operators today they are often not even willing to admit that that will be what it takes.

    And that’s the big registrars – the small registrar story is the other side of the coin here. Going to be interesting to watch 🙂

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