Mike Berkens wrote an interesting post yesterday through which he analyzed a comment Frank Schilling made on another post of his. Mike shared a few opinions and to make things easier, I will use numbers:

1) Ultra premium dot coms will continue to go up in value

2) Longer dot coms will have a considerably harder time due to exponentially increasing supply (ie more and more new gTLDs alternatives)

3) The best of the best new gTLDs (domains like Skin.Care) are worth a lot of money

4) The best of the best new gTLDs (again, domains like Skin.Care) will be worth 10-20% of the corresponding dot com (SkinCare.com for our example) as opposed to the 5-10% “dot net/org vs. dot com” principle which has been popular among domainers for many years

5) New gTLDs which are good but not the best of the best won’t be worth 10-20% of the corresponding dot com but will still fetch $xxx – $x,xxx

I’d like to take things one conclusion at a time and share my two cents:

1) Yes, I agree that amazing dot coms will continue to go up in value. I won’t insist on this matter, as I’m sure most DomainingTips readers agree as well.

2) Once again, I agree that lower quality dot coms will come under pressure. In my opinion, the best time to sell your let’s say average domains would have been several years ago, when people knew the new gTLDs were coming. The less impressive your domain is, the harder it is to sell for a decent price. On the one hand because people can simply choose another dot com or legacy TLD and on the other hand because new gTLDs make matters worse by adding (and adding… and adding) to the supply pool. Economics 101.

3) I agree that the best of the best new gTLDs such as Skin.Care are worth a lot of money. Unfortunately, so do registries. Therefore, it’s hard if not impossible to obtain a domain of this caliber at a low price, let’s not even talk about hand registering them at the regular fee. A lot of times, you’ll have to shell out some serious cash if you want a very good new gTLD. So much in fact that you might be better off investing that amount in something proven, like a good dot com. So yes, I agree that the best new gTLDs are worth a lot of money but unfortunately, the acquisition costs are a lot of times too high for something that (let’s face it) is still largely unproven.

4) I tend to disagree that great new gTLDs such as Skin.Care are worth 10-20% of the corresponding dot com, in our case SkinCare.com. SkinCare.com was acquired by L’Oreal earlier this year, the price wasn’t disclosed. I’m convinced however that nobody would be surprised to hear that it sold for let’s say $2,000,000. However, I’m sure everyone would be surprised or even downright shocked if Skin.Care were to sell for $200,000 – $400,000. I think 10%-20% is too optimistic. Am I saying it’s impossible? No, but I consider it unlikely. As far as the 5-10% “dot net/org vs. dot com” percentage is concerned, I’ve noticed that even those numbers are on the optimistic side, with the net/org selling for less than five to ten percent in a lot of cases. If I had to choose a percentage when it comes to the “great new gTLD vs. dot com counterpart” scenario, I’d probably go with something in the 5% zone.

5) If we’re talking about end user sales, I tend to agree that a solid but not amazing new gTLD could fetch 3-4 figs. However, I think the pool of such “solid but not amazing” new gTLDs is less impressive than most people think. In other words, I’d recommend being very selective. Also, while tech-savvy end users (tech-related niches, for example) might start taking new gTLDs seriously soon-ish, the same thing cannot be said about most of the other end users (other niches). The adoption process will most likely be painfully slow. Now if we’re talking about domainer to domainer sales (reseller market sales), I disagree. I don’t think there will ever be a truly liquid new gTLD reseller market. Am I saying it’s impossible to sell new gTLDs to other domainers? No, what I’m saying is that there’s only so much money on the reseller market and a huge number of new gTLD options. If you want to sell a genuinely good new gTLD at a very aggressive price, you stand a chance. Anything else and all I can say is good luck with that 🙂