Two days ago, I’ve explained why you should always dig deeper rather than draw quick conclusions based on new gTLD stats. To a lesser degree, this is also true for dot coms.
Never has this been more obvious than after the Chinese short domain surge.
People were registering lots of worthless short domains (random 5L dot coms, 6-7-8N dot coms and so on) and a lot of them were doing it using coupons through which registrars lost money.
Coupons such as the $0.99 GoDaddy ones, for example.
The only problem is that the company (such as GoDaddy in our example) has to pay $7.85 to Verisign and $0.18 to ICANN for each Dot Com registration.
In other words, they lose money on each domain they sell for less than $7.96.
Registrars do this for marketing purposes, hoping that people will keep domains with them for years to come and that they’ll make money on the retail renewal fees.
Under normal circumstances, this can actually work.
But when manic periods such as the Chinese short domain craze take place, these promotions coupled with people’s appetite for speculative registrations can make the dot com growth stats seem rosier than they they are.
In other words, they paint a misleading picture of reality.
Now sure, dot com is a TLD with a huge pool of domains, so we’re talking about a lesser degree of statistical craziness but still, it’s important to keep in mind that even dot com stats can be misleading.
March 7th, 2017 at 8:53 am
They actually hope you stick around and buy related services like Web hosting, SSL certs, etc. NBA Imo this rarely works.
March 7th, 2017 at 9:00 am
Where did you find this godaddy coupon?
March 7th, 2017 at 10:42 am
@Konstantinos: back in the day, $0.99 to $2.99 GoDaddy coupons were very, very frequent. I used to have a weekly column about them on DomainingTips. Nowadays, they’re almost impossible to find, I think it’s been two years or so since I stopped writing about the coupons. However, other registrars have similar deals from time to time. Netfirms, Hostgator (seriously), Namecheap on occasions such as Cyber Monday (follow their twitter), etc.
March 7th, 2017 at 1:11 pm
There’s also the deep-pocketed group investors that pull their resources together and buy up a .com niche in order to inflate value, giving the appearance that there is a high end-user demand when in reality, it’s a group of 20 to to 50 wealthy investors looking to double down for some quick trending cash.
March 7th, 2017 at 1:17 pm
Guys like Krell are the reason godaddy got rid of the coupons, he went on the sherpa show and was showing people how to abuse the system. We can’t expect domain companies to offer more than 1 coupon there is no margin on .com