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I Think Most New gTLDs Will Be Profitable

Posted on 14 August 2014 by Andrei

… but that in pretty much all cases, “barely profitable” will be the appropriate term and that’s not exactly a good thing given how high the expectations were.

I’m reasonably confident a lot of registry operators were expecting a home run and based on what we’re seeing at this point, that’s not going to happen.

Yes, I expect new gTLDs to be profitable, especially for the large registries because the more strings you have, the lower your initial costs will be on a “per new gTLD” basis. But no, the profits will most likely *not* be worth writing home about because let’s face it, the numbers are for the most part quite weak.

If new gTLD registries made calculations based on let’s say Dot Co and Dot Mobi numbers then, needless to say, they’re probably not celebrating at this point. And even if their estimates were less optimistic than that, I’m pretty sure they weren’t expecting situations when certain strings got less than 1,000 registrations (in some cases even low 3 figures) after the start of the General Availability phase.

All in all, I think that if things continue in this manner, registry operators will be quite disappointed.

On the other hand though, they should have expected this.

Why?

First and foremost because there was practically no innovation involved, nothing that sets new gTLDs apart. I mentioned this on more than one occasion, a lot of creative solutions could have been implemented.

For example, offering more than just a domain. In fact, I mentioned an example yesterday: offering an easy way to put together a directory for all Dot Directory domains. Or an easy way to create a forum for all Dot Forum domains (random example, as we don’t have a Dot Forum new gTLD yet), a blog for Dot Blog domains (same situation) and so on.

Perhaps this situation will change in time.

It really should in my opinion because in 2014 and beyond, expecting people to buy your new gTLD “just because” isn’t exactly an amazing business model. At the risk of sounding like a broken record: there’s a word new gTLD operators have to find out about.

What was it again?

Oh, yes: innovation!

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3 Comments For This Post

  1. Leonard Britt Says:

    Those who invest in new TLDs should not forget that there is a tremendous difference between registry profitability and domain investor profitability. A registry wants to maximize revenue via selling names at premium prices or insisting on premium renewals. They may reserve certain keywords because they believe long-term they can sell them for more money in the future. A new TLD domain investor has to deal with the uncertainty of when an aftermarket might develop for that extension and gauging a potential resale value versus the total investment cost to acquire and hold a domain until sale. An investor cannot overlook the fact that only a small percentage of a domain portfolio turns over annually so even with great keywords, sales need to cover renewals on the entire portfolio. That is much more difficult when there is no parking revenue from new TLDs and one has to deal with not only premium renewals but the likelihood that the resale value will be limited due to the extension.

  2. Liar Liar Says:

    1. I won’t cum in your mouth.
    2. The check is in the mail.
    3. I’ll respect you in the morning.
    4. I’m from your government, and I am here to help you.
    5. It’s only a cold sore.
    6. You get this one, I’ll pay next time.
    7. My wife doesn’t understand me.
    8. Trust me, I’ll take care of everything.
    9. Of course I love you.
    10. I am getting a divorce.
    11. Drinking? Why, no, Officer.
    12. I never inhaled.
    13. It’s not the money, it’s the principle of the thing.
    14. But we can still be good friends.
    15. She means nothing to me.
    16. Don’t worry, I can go another 20 miles when the gauge is on “empty.”
    17. I gave at the office.
    18. Don’t worry, he’s never bitten anyone.
    19. I’ll call you later.
    20. We’ll release the upgrade by the end of the year.
    21. Read my lips: no new taxes
    22. I’ve never done anything like this before
    23. Now, I’m going to tell you the truth
    24. It’s supposed to make that noise.
    25. I *love* your new haircut!
    26. …then take a left. You can’t miss it.
    27. It’s OK — I’m sterile…
    28. I Think Most New gTLDs Will Be Profitable
    29. Gtld’s will be selling like hotcakes.
    31. The new gtlds are much different than the old ones that failed.
    30. Gtlds are intended for the next generation.

  3. SsAaMm Says:

    32. There will be a big bang letting the .com world know that gtlds exist.

 
 
         
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