Categorized | Random Rants

Slow Motion Train Wreck

Posted on 10 October 2016 by Andrei

I gave new gTLDs what I consider to be a fair chance.

Some readers asked me to submit a proverbial verdict as soon as they started going live. I refused because I wanted to gather data first, which I did.

I published a case study, the first post of which you can find HERE, gave multiple strings a chance. To read all of my new gTLD case study posts, simply search for the term “New gTLD Case Study” using the top-right search bar.

Today, I’ll write a detailed post about my experience, just letting you know upfront that it will be LONG but hopefully coherent. I’ll do my best.

First of all, we have to be very precise when defining what exactly we want to find out.

This blog is called Domaining Tips Dot Com. It’s a DOMAINING-related blog which provides TIPS to people who… well, who want to invest in domain names.

Therefore, my objective today isn’t writing about whether or not new gTLDs have end user potential. Or SEO potential. Or anything other than DOMAINING POTENTIAL.

To put it differently, my only objective as a blogger is telling you guys whether or not new gTLDs are worth it for domainers. Only domainers. That’s it.

They can be the best thing since sliced bread for everyone else but if they’re not good enough as investments for domainers, then I’m sorry but I won’t recommend them. I just won’t because at the end of the day, my readers are interested in one thing and one thing only: investing in domains.

Ok, so we’ve defined what I want to do.

Let’s move on.

First of all, here’s what I’ve invested in, chronological order (earliest to latest):

1) 9 first name Dot Cool domain names (epic fail, think I’ve made $0 back)

2) some random strings from Donuts: Domaining.Directory, Chair.Expert, VPS.Cheap, Safest.Email (made some money on Domaining.Directory mainly because domainers are also end users for this string but all in all, not enough to offset my losses with Donuts strings I think… I *might* have broken even at best)

3) Dot Social domains: Loans.Social + Lending.Social + Borrowing.Social, Bookmarks.Social + Bookmarking.Social, Feedback.Social, Contests.Social, Offers.Social, Reputation.Social and Answers.Social (lost money)

4) Dot XYZ domains that I picked up for the regular registration fee: Instruments.XYZ, Parenting.XYZ, Productivity.XYZ, Programming.XYZ, Publishing.XYZ, Reputation.XYZ, Skateboards.XYZ, Stress.XYZ and Surveys.XYZ (epic win, believe it or not; I picked these up for literally a few dollars each and sold them for a more than reasonable return; I know Dot XYZ is not the best string in the world but I think they were the first who were willing to release most strong terms at the regular registration fee… therefore, I’ve decided I’d rather pay a couple of bucks for Parenting.XYZ than 4-5 figures for let’s say Parenting.Guru, to give you an example of an extension with an expensive EAP; as a result, even if .XYZ isn’t exactly the most amazing right of the dot combination in the world, I’ve made money – I’ve also made money on the only premium new gTLD in my portfolio, Stocks.XYZ but selling has been very hard, so I had to invest a lot of time/energy to generate a return)

5) 100 Dot Berlin domains that the registry gave out for free; I’ve chosen strong LLL.Berlin combinations based on letter popularity in Germany… had one 100 EUR offer which didn’t materialize and that’s it; proof that you can even lose money with domains you get for free by investing time (which is worth money) and not generating a return, as outlined in THIS post 🙂

6) Cheapest.Tools, Cheapest.Parts (made $0 back)

The conclusion: made *some* money, believe it or not but for the most part pocket change. And without having the blog and my newsletter at my disposal as sales venues, I think I would have moved considerably less names.

Also, after factoring in the TIME I’ve invested, the return has been… well, horrible.

A few observations about new gTLDs from the perspective of a domainer:

1) most registries tried to eliminate investors from the equation through high prices, premium renewals, reserving the best domains and so on… there’s absolutely nothing wrong with that, as it’s their business at the end of the day but since this is a domaining blog, it’s impossible for me to recommend such strings as investments

2) at the beginning of the new gTLD program, there was some reseller market activity… things however slowed down considerably, with the notable exception represented by the Chinese short domain surge in certain extensions (.Top, .XYZ and a couple others); the reseller market for keyword new gTLDs has been dead even during the Chinese surge and right now… well, it would be the understatement of the century to say things slowed down: there’s just waaaaaaaay too much supply and not enough demand

3) it wouldn’t be fair to say there’s no end user demand, there is… but when registries charge domainers end user prices or keep the best domains, they aren’t putting a very good deal on the table for investors

4) there are a lot of great people behind some of the strings; Frank Schilling for example offered to sponsor my upcoming contest with the latest iPhone despite me not recommending new gTLDs to domainers, it takes character to do support a person who criticizes one of the products you’re selling

5) I may very well be wrong, this long post only reflects my experience and my opinions; I did my best to be fair and waited a year before drawing conclusions and articulating them HERE
, I’ve gathered data myself but this doesn’t mean I’m right

Here are some of the things I think could have been done right but were done wrong:

1) ICANN made an AWFUL (A-W-F-U-L) decision by allowing confusingly similar strings to be released: Dot Law + Dot Legal + Dot Esq + Dot Lawyer + Dot Lawyers + Dot Attorney + Dot Attorneys = Dot Confusion = Dot Fail… seriously, ICANN?

2) a lot of registries tried to eliminate domainers from the equation through high renewal fees, premium renewals, reserving domains and so on; now sure, it makes sense to try to squeeze as much money out of your product as possible but strategies can end up being proven wrong… and in my opinion, time has proven that this strategy has been a mistake

3) most new registry operators embraced an “I exist, give me money” mindset instead of aggressively promoting their strings… business 101 people, business 101; not marketing your product (even if it’s the best product in the whole wide world) is a huge, huge, huge, huge, huge, huge, huge, huge, huge, huge, huge (did I mention HUGE? As in enormous, gargantuan?) mistake

4) domainers underestimated the burden of renewal fees, it’s perhaps the most common mistake in domaining; before new gTLD appeared, lots of people (including yours truly) did this with dot coms and legacy TLDs… I guess the temptation of ridiculously high returns is hard to resist

That’s pretty much it guys, I could make this post 10x longer but believe I’ve said what I think needed to be said. All in all, I think I’ve explained why I for one consider new gTLDs a slow motion train wreck from a domaining standpoint.

I’ll try to post more frequently from now on but definitely not daily.

I’d rather publish genuinely meaningful posts less frequently than just post for the sake of churning out content.

5 Comments For This Post

  1. Eric Lyon Says:

    Interesting analysis and summary. Could there also be some variables that would affect their potential success of failure such as, but not limited to; Unique Content, SEO, SEM, Site Design, Authoritatively Branded, Target Audience, Call To Action Statements, etc.?

  2. Andrei Says:

    @Eric: definitely and the thing is, new gTLDs may very well end up being successful without the support of domain investors. At the end of the day, registry operators want sales and revenue. That money can come from “traditional” end users, it can come from developers (who buy them for SEO/SEM purposes, for example), from domain investors and so on.

    Today, I tried to analyze new gTLDs exclusively from the perspective of a domain investor. Perhaps from the perspective of an end user or developer, the value proposition equation looks a lot better.

  3. Ian Ingram Says:

    Lots of good points. One of the most pertinent is regarding confusingly similar strings. I’ve stayed away from gTLD’s thus far & I don’t see that changing anytime soon.

  4. Dnvre Says:

    Greed and Confusion ….. recipe for disaster

  5. Says:

    I love my new domain name.