Categorized | Domaining Tips

Why Risk Your Money When the Odds Are Stacked Against You?!?

Posted on 13 July 2016 by Andrei

Look, I don’t mind taking risks. In fact, as an entrepreneur and investor, you could say I take calculated risks for a living.

But when it comes to new gTLDs, I just don’t understand the equation. Why on Earth do people invest in them when there are lots and lots of more attractive investment options out there?

If I see a good risk vs. reward ratio, I go for it, whether we’re talking about domains, offline investments or whatever.

But with new gTLDs, all I see is this:

1) a LOT of confusion and even stupidity, for example (and I’ve referred to this situation previously) having a Dot Law, a Dot Lawyer, a Dot Lawyers, a Dot Attorney, a Dot Attorneys, a Dot Legal, a Dot Esq and so on; this is not just confusing, it’s just plain stupid on ICANN’s part to allow something like this to happen… it would have been hard for new g’s to gain traction among consumers even without this foolishness (so even if ICANN would have only allowed ONE law/legal-related new gTLD to avoid confusions, not a gazillion) but whatever, the damage has been done

2) there’s hardly meat on the bone for domain investors: a lot of registries keep the best domains or price them at or above what even well-funded end users would be willing to pay, even the scraps are more expensive than Com/Net/Orgs and so on

3) there are exceptions however but they put us in the other extreme: you’ve guessed it, I’m talking about registries handing out “leftover” new gTLDs for pennies… this dilutes the perceived value of the extensions and come on, those leftover domains are worth $0, so even paying $0.000001 and investing the time it takes to actually register them isn’t worth it; I’ve tried this myself back when Dot Berlin offered free domains and in an earlier blog post, explained how you can even lose money with free domains after factoring in the time you had to invest

4) end users are often even reluctant to reach for their wallets if you’re offering them a good dot com, pitching a new gTLD would be an uphill battle to put it mildly

5) with dot coms, there’s at least a decent reseller market if your domains are good: for most new g’s (the overwhelming majority), not only is the reseller market dead, it wasn’t even born

… I could go on and on.

Am I saying there are no good new gTLDs?

No.

Am I saying you can’t make money?

No.

What I am saying however is that for the reasons outlined today, it should be clear that new gTLDs aren’t exactly fertile land for domain investors. Simply put, there are better investment options out there, where at least the odds aren’t stacked against you.

3 Comments For This Post

  1. Joel Says:

    Completely agree with everything you’ve said above.

    This is all about the registries trying to make the big sales and cutting the domnainer out, there’s next to nothing left for domainers at fair pricing without huge upfront fees and/or renewal fees.

    GTLD’s in their present form are absolutely not a risk worth taking in my view either.
    If you really like alternative extensions then you have .net, .org etc. which you can get at a fraction of the .com and they have lots of end user sales history.

    I have some premium .online domains and will very likely drop all of them come renewals. 0 inquiries hasn’t helped change my view of GTLD’s.

    Best post on this i’ve seen in a while OP.

  2. David Says:

    Andrei,

    Very good article, i appreciate when a few say things as they are and as they see them, and don’t concern themself with what others will say or think or their opinions get influenced by advertising, friendship or positions they want to attain.
    This is one of the great things Rick has, he always said things the way he saw them. Some new Gtlds will do well others will RIP.
    Some will be Chocolate and most will be Pidgeon shit.
    Keep up the good work,
    David

  3. Patricia Kaehler Says:

    I don’t care for the .whatevers there are too many of them…
    I do have some if they SOUND Catchy
    or would look good on a product…

    Such as:

    iHeart.COOKING

    .com keeps me toooo busy anyway…
    ~Patricia — DomainBELL