Categorized | Domaining Tips

Wonderful Domains at Fair Prices or Fair Domains at Wonderful Prices?

Posted on 31 October 2013 by Andrei

One of my favorite Warren Buffett quotes, one that applies to domains as well in my opinion, is this:

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”

In my opinion, the optimal strategy in 2013 and beyond is focusing on quality as opposed to quantity.

Sure, you often feel great after buying average domains at deeply discounted prices but the fact that you paid a low price doesn’t necessarily mean that we’re talking about a bargain.

The only thing that’s important is the risk vs. reward ratio.

A lot of new gTLDs will be launched and remembering this quote will be crucial because it applies to extensions as well as keywords.

Some of the extensions will be well managed and promoted, some will not.

It’s your responsibility to figure out which registry operators know what they’re doing and which don’t.

Frank Schilling said it very well in my opinion (not an exact quote but probably close enough): a lot of companies thought that paying the fees was the hard part. Those companies will fail.

The hard part is just beginning.

Marketing, negotiations with registrars, you name it.

The companies that thought a budget that barely covers the fees will be enough will most likely fail. Business 101.

You can’t expect to stand out in a competition against lots and lots of other extensions if you don’t have a serious marketing budget, for example.

You just can’t.

If registry operators want their extensions to succeed, their ad has to be all over the place.

On domaining blogs/sites such as DomainingTips (I stated it over and over again, I can’t be a hypocrite and say that I’m not looking forward to additional ad revenue: there’s going to be a *lot* of demand for ad inventory on popular domaining-related sites) because domainers are great customers who buy in bulk. One domainer with deep pockets might buy more than hundreds of regular customers.

On niche sites relevant to each specific gTLD.

On mainstream sites as well because reaching out to the average Joe is also important.

All of this will cost money.

There are two types of registry owners in my opinion:

1) those who thought that just securing the gTLD will be enough

2) those who actually know how to run and promote a business

It doesn’t take a rocket scientist to figure out who will succeed and who will fail.

Don’t forget Warren Buffett’s quote.

Focus on the very best keywords in the very best new gTLDs.

It will be obvious once things unfold.

Those who managed to secure great extensions *and* are able to promote them accordingly will be winners.

There’s a lot of money to be made with these new gTLDs.

Lots of opportunities but lots of pitfalls as well.

It will be a very tough competition.

Some new gTLDs will not only survive but also thrive, some of them will be and stay irrelevant due to poor planning and/or poor funding.

The ball is in your court, what will it be: wonderful domains at fair prices or fair domains at wonderful prices?

1 Comments For This Post

  1. Kassey Says:

    Well said, Andrei. I’ve also learned a lot of investing tips from Warren Buffet.

    #1 used to work in the past, now I can see many new gTLDs will be engaged in aggressive marketing, which will lift the profile of domain investment.