Contribution from new top level domain names isn’t significant, CEO says.
Web.com CEO David Brown was asked about new top level domain names on yesterday’s investor conference call. Brown said the company isn’t doing “back flips” over the results, and says it’s not moving the needle for the firm. He suspects new domains aren’t moving the needle for competitors, as well. Here’s what he said:
So in the gTLD space, that continues to be positive, but we’re not doing back flips here. It’s not that positive. We think it’s good for the market, good for consumers and businesses to have more choices. But it’s not – they’re not flying off the table. .Com and .net and the original extensions still are the force in the marketplace. But as we see more gLTDs and as the market understands them and sees the opportunity, we continue to believe that this will be a positive trend. But at this point, it’s not moving the needle in our business or likely in anyone’s business.
If new TLDs are moving the needle for anyone, I suspect it’s smaller registrars that focus on .com alternatives.
Finally the truth. It may be moving the needles, but it’s likely backwards!
Kudos to web.com for telling the truth.
ANYTHING THAT WEAKENS .COM sales hurts domaining. Not only have
the registries confused consumers, but in their greed successfully
devalued .com’s which isnt doing anyone any favors.
Andrew – Thanks for the post. David Brown should read (or re-read) “The Innovators Dilemma” by Clayton Christensen:
https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
It is a classic that any MBA has likely read. It speaks to this exact issue. In short, to a large, established company, a relatively small opportunity does not move to the needle. Whereas, to a smaller, and/or a more forward-looking company, the opportunity is material.
Epik is boutique-sized by comparison to Web.com. For the first 9 months of the year, our business has grown 88% versus a year ago for the same 9 month period. The new gTLDs, and notably premium gTLDs, are a significant growth engine. The other big growth engine is domainers finally parting ways with legacy registrars and moving to innovators like Epik and Uniregistry.
In contrast, Web.com, as well as I suspect some of the larger established registrars are underwhelmed by the uptake of the new TLDs because the transaction volumes are small relative to their base business. Recall, 1&1 was a heavy marketer for the launch of new TLDs, and very likely had negative ROI on that venture based on their registration volumes.
I do believe that the new TLDs are very much here to stay. As for retail uptake, I expect individual TLDs will come into fashion one TLD at a time, particularly the ones that effectively cater to a niche in a differentiated way. For example, I like what .LAW is doing. The standard GA price point may seem sky high but for a law firm, the registrant is less than one hour of billable time!
And for any registrar trying to drive topline growth, I would not underestimate the impact of selling a bunch of premium gTLDs for $25K, $50K and $100K each. You have still sell a lot of .COM to match the impact there, and the margins are at least comparable to selling the legacy TLDs in volume.
As I review the market dynamics in 2015, I think the more interesting trend is that registries are selling these premiums directly to the registrant, e.g. Enom is selling aggressively Rightside, etc. And just yesterday we had a buyer for Television.Law, a premium gTLD. And guess what, Minds and Machines sold it on the same day directly to the registrant and M+M are the managing registrar.
So, the bottom line is that the registrar channel either needs to drive the new gTLD sales volume. If they don’t, the registries are going to end up doing it for them! The vertical integration of registries and registrars is going to end up being driven by the lack of execution by registrars to help the registries bring in what I am convinced is going to end up being a significant harvest.
Bottom line: Innovate or Die.
@Rob Monster,
That analysis rings very true.
Haven’t you done enough spamming Monster?
Tell me about it what a Spam Monster, and that chick Jessica that works for him, she spammed me in regards to a $40K range, and offered me $100 when I pretended I replied to her spam to see what kind of people they are.
SPAM SPAM SPAM
Seriously monster haven’t you made enough money, your to old to send spam
It will take time for the new gtlds. Most are not even a year old yet. Even some of the stronger proponents of new gtlds say it’s a 5, 10, 15 year game.
Yes, the new gTLDs are here to stay. And, no, none of them will ever truly compete with the popularity of the legacy TLDs. And what’s wrong with that? Nothing, except for those who tried to sway the public (and their investors) with the notion that they would replace the legacy TLDs.
https://www.youtube.com/watch?v=k0t0EW6z8a0
🙂
It’s not moving the needle because this is all still new, sure you can mention all the other extensions, .info, mobi, but we are just seeing now more and more extensions coming onto the scene. I think overtime .com and .net and all the extensions that have been here forever will just be overwhelmed with all the new options we are about to get. Another thing, XYZ and .TOP and the like don’t have to beat .com, they serve it’s own purposes.
Either way we have an opportunity here to take advantage of something great and we continue to stick our heads in the sand, new gtlds are growing more than ever, the rollercoaster continues to climb, like .com is too, but as I said in the end the sheer amount of options will one day I think outnumber just 1 extension.
However I also believe it is a 5 to 10 year game here guys, maybe even more. If you have some really nice hacks or premium words of popular extensions, by all means I would really hold onto them for several years because I honestly believe they will bring in the bucks, more than these silly .coms have, stuff that makes no sense and it’s pulling in x,xxx , Why? Because .com is a status symbol and society has been using it forever, but has there really been a lot of options up until this point? Nope and about time. there were options.
http://www.networkworld.com/article/2998546/cisco-subnet/why-more-companies-are-ditching-new-domain-names-and-reverting-to-com.html
Let that not discourage, but rather encourage people to invest more in public awareness for the new gTLDs.
They would be moving the ebitda needle if Web.com owned the new gtlds they were selling
in my opinion most profitable success is only related with .com domains. Not even .net or .org (just for non profit) but some other special characters domains have potential
C’mon we all know new gTLDs registries that makes money not us (small entrepreneurs). Some people still in denial.
Have you seen your new gTLDs making money through parking or development? Maybe a few, but still in red.
The eco-system of new gTLDs are not moving because most registries holding premium domains and hope to sell in thousands.
Why not let us “entrepreneurs” register them at regular cost so we can start moving these assets? Don’t be greedy.
David Brown is a clown and an empty suit. Go Daddy is selling the new TLDs like hot cakes. David Brown couldn’t run a lemonade stand.
David Brown should read Bob Parsons 16 Rules for Success in Business. Maybe that clown will learn something.