Categorized | New gTLDs

Selling Failed New gTLDs to Other Registries?

Posted on 31 March 2017 by Andrei

Two days ago, I asked you guys if you thought new gTLDs are worth saving and have provided three options. Yesterday, I’ve covered option #1, being rescued by ICANN.

Today however, I will be analyzing a more likely approach which is simply selling failed extensions to another company. There are advantages, of course. For example, a large company that manages multiple new extensions probably has its own technology and as such, the main cost by far is the $25,000 per year fee that they have to pay to ICANN.

A smaller company that perhaps only manages one extension has to struggle with the technology aspect as well and since it probably doesn’t have its own technology, it has to pay others. This of course adds up to the cost burden and the end of the day, especially if that new extension hasn’t taken off, generating profits is easier said than done.

As such, it might not be the worst arrangement in the world for certain extensions to simply end up being bought by bigger players.

Unfortunately, big players are struggling themselves. Let’s face it, a big player such as Uniregistry would have never bumped prices 30 times without a valid economic reason. An even bigger player, Donuts, did the exact opposite by slashing prices dramatically for the first year of registration, most likely in an effort to keep the numbers under control. Therefore, as good as the idea sounds in theory, it might be more problematic than we realize to make extensions work by simply selling them to a bigger company because the bigger companies are also struggling.

This is the main challenge I see. Even if you were to sell your extension for pennies on the dollar, a bigger company that’s struggling as it is might simply not be interested in failed extensions at any price. It has enough of its own.

The second problem I see with all of this is that even if they were to be sold to the best business people in the world, some extensions are just so poor that it’s hard for me to envision a scenario in which they can end up being turned into decent businesses. I’m sorry but I for one have a very hard time seeing how .Horse or. Black Friday or other really obscure/weird choices can end up working in any other scenario then perhaps maybe if ICANN stops charging fees altogether. The terms themselves are just so bad and they’re just so little demand for them that again, you’d need a magician to take over rather than a good business person.

The final problem I envision is the fact that even more confusion will flood the new gTLD world. For example, an extension that was initially priced at 10 bucks per year might end up being sold to a company that in a desperate effort to make the extension profitable, do something similar to what Uniregistry did which is raise the price to $100, $200 or even more. As such, most people will end up dropping their domains which is arguably just as bad as letting the extension simply fail and leaving it at that. But that is a topic for tomorrow :)

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3 Comments For This Post

  1. Snoopy Says:

    I think the revenue would need to be well above $25000 for anyone to be interested, (e.g. 100k+) a loss making registry is a potential large liability once you factor in ICANN financial guarantees. If a healthy registry buys one and it still loses money they are potentially stuck with it long term.

  2. Domain Observer Says:

    Whatever scenario is adopted, the conclusion is always the same and will not change. That is: The new GTLDS are garbages except a few.

  3. Mobile Notary Says:

    It costs more around $200,000 per year Andrei. That is with data escrow and other fees.

 
 
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