All New TLD’s will fail and Keyword Domains will rise.
By Alan on Jun 10, 2009 in new TLDs
I’ve been avoiding posting anything lately for many reasons (mostly since its unproductive to blog) but even with my absence I have still found great amusement in reading many stupid posts day after day about domain names.
First, for new investors you have to understand that many people (not all) who blog about domains every day have no idea about development but are simply in love with posting. In fact, they use blogs as outlets to bitch about others, provide personal updates to the readers they think they have and basically just sleep better knowing they told a few people what they did today. Of course, there are exceptions (like Michael Berkens who is not just an experienced domainer and respected legal counsel but also an avid fan of drinking grey goose in a bathing suit somewhere in Costa Rica) but for new investors you really need to understand who is really experienced versus who likes to talk. In general the amount of time it takes to develop will leave little or NO time to blog so if you see someone’s face re-appear each and every day with silly posts its probably a good idea to think hard about exactly what this person is doing in the domain world which gives him authority on a topic. Is he just addressing his thoughts on topics (so its not actually factual but merely opinon) or do they actually practice what they preach? If I was starting out my desire would be to learn from those who have developed … not those who have read about it.
I’m not being critical of anybody specific but you see (much like FOX news) people actually believe what they see on a small screen in type. Add some pictures, its more credible and as Chef Patrick (I think) said .. add some sexy women and bingo, people will read anything you have to say.
How does this relate to new TLD’s.
Very much. I think Berkens and Andrew Allerman wrote about .tel reaching 200,000 registrations – some questioned is this good while others reserved judgment for the count after first renewals.
Let’s revert to .asia, .eu, .info, .us, .biz – almost all of the extensions outside of .com, .net and .org.
Lets be honest – they are ALLL miserable failures (some ccTLD’s not included .. .co.uk one of the great ones)
There are only two groups who will succeed with these names. First, of course, the registries. They get your money every year. Second, developers … yes, I said developers not domainers.
While some domainers were holding out for ridiculous prices (hey, add 5 zeros and we have a deal) people with real talent basically said seeya and bought another extension and now have sites with great SEO, traffic and revenue.
This is a cycle that happens OVER AND OVER with every new extension. .NYC will fail – they will all fail for domainers except the handful who get a lucky name or those domainers …. Nope, I mean registries who auction off the premiums with high reserves to (now I say) domainers who will never get their money back.
In theory a .nyc extension is valuable but when it costs millions to get an extension nope – it’s a failure. Let’s do some math.
There are probably 5,000 names that have any value in a .nyc extension but lets say 10,000. Even at a high registration price of $100 a year that’s a lousy $1,000,000 in renewal revenue per year and that’s before the split to the registrar, annual license fees etc. Hell, the owners of .nyc extension can’t even promote the brand with this kind of cash.
But see here’s the tricky part. I think its safe to say that a very high percentage of the initial registrations (which is were the ONLY momentum exists for any of these TLD’s) will be bought by speculators for PPC traffic – THEY ARE not buying to resell but purely for type in traffic. Since almost none of these new extensions will have ANY type in traffic you betcha … the window to resell (to another domainer) will be limited and closed very quickly hence high lost renewal fees and ultimately another failure.
How does this relate to those who blog. First and foremost – stop reading about new extensions and how they are great investments and focus your time on reading about development, SEO, online marketing etc.
If you watch the local news for a half an hour you will start believing everything they say – no more than reading blogs from people who are really only trying to sell names day after day. When .nyc fizzles I am sure they will hype the next .stupid to come along. Affiliate revenue, quick flips, “quality deals” from a reputable domainer … same shit, different extension. You are not buying value – you are buying hype.
As for keyword domains.
These are the names developers value more than anything else. .com, .net and .org. It does not take a rocket scientist to figure this out. Keyword domains will continue to rise because they have development value but stick to the extensions that are proven.
Owning mortgage.me or sexy.nyc is only cool if you have the money to build it otherwise stick to the proven winners – there is no reason, no need and certainly no benefit to your wallet or the internet by trying to reinvent the wheel time after time with new extensions.
They are all failures – and will continue to be time after time.
Some will agree – some will disagree .. but ask yourself … whos a seller and whos a developer??
Reece Berg | Jun 11, 2009 | Reply
I wouldn’t go so far as to say that about people blogging everyday.. I’ve struggled to find time to blog for the 1.5 years I’ve been blogging but just recently in May decided I was going to try to make time to post everyday — I still don’t get around to it everyday but I get around to it more days than not. I do love posting though – my almost 9000 posts between Namepros and DN Forum since 2004 will attest to that
If you’re making money off your blog like Elliot, Chef Patrick, Andrew, etc, then it’s not necessarily a bad thing to find time to blog every day.
I do agree with you on your other points about new TLDs — I think some people are going to find creative ways to make the new extensions work for them and that obviously won’t be domainers, except maybe the ones that get in right and landrush and make a calculated exit while hype is still running high.
I pretty much only read the blogs on Domaining.com and I don’t believe anyone on any of those has praised these new extensions in any way but sarcastically.
Plenty of people do both — I was developing websites before I got into domaining, then I stopped developing websites to spend more time domaining and now I’m spending less time domaining and more time developing. I’ll follow the money whereever that takes me.
Ross | Jun 11, 2009 | Reply
Kind of funny you say that the people that blog everyday pretty much suck at developing or have no idea to develop. Well i got news for you, blogging is actually one of the best fruits of development. Look at Problogger.net, the guy has posted everyday for the past 5 years among 2 other successful blogs. If he isn’t developing i have no idea what development means.
Plus on top of that, if you know what you are talking about and have done what you are blogging about, it shouldn’t take you more than 30 mins to write a useful post. So its not like its a time sucker.
Alan | Jun 11, 2009 | Reply
Reece – Yes, you are one of the MANY exceptions!
I wasn’t talking about anyone specific – just trying to advise new investors to do a little research on who is selling, promoting or cheering “the next best thing” before they actually dive into any of these new TLDs.
thanks for the comments
Alan | Jun 11, 2009 | Reply
Ross,
These articles always get read out of context.
There are MANYYY people who do both great – again, this really was for new investors to step back and sort of make sure what they are reading is from a credible source instead of someone who’s only objective is to sell domains.
Alan
Mark | Jun 11, 2009 | Reply
Chase Your Tail – Longtail, That Is:
As long as we’re telling stories out of school, I’d like to suggest a little guidance. If I was new to the business, I would buy only .COM domains I could hand reg for about $8 each. This would be generic, descriptive, NO TRADEMARK OR EVEN SMELL OF TRADEMARK, popular keyword based products, services or geographic locations from two to four words in length. No numbers. No hyphens. Google avg. monthly [EXACT] “Local” search count in excess of 1,000 searches and a minimum PPC of $1 or more.
The higher the ratio of avg. monthly [EXACT] “Local” search inquiries to actual number of search result published pages returned by Google when you do a search for the “keywords in quotes” (with spaces), the greater the likelihood that you will have a top 30 page result ranking (first three pages) when those exact keywords are searched (without quotes). That means the websites you develop in the next paragraph down will have a modest amount of ACTUAL SITE VISITORS (these are helpful).
Build a four page minimum “minisite” w/ original content with several photos and 250 words per page should do the job. Start with Adsense and move on to affiliate relationships. Later, get your own advertisers. What you just did will account for the lion’s share of your SEO. Good, interesting content, keywords – now forget about all this SEO tinkering. Begin development of Domain #2 instead. Then 3. Blah, blah, blah.
Domainers won’t offer you squat for the words I’ve just described, but that’s okay because you won’t want to sell them. They’ll be making you too much money. 1,000 domains and 30 yrs later, move to Florida and retire – maybe next door to Rick Schwartz.
If I missed anything, please fill in the rest!
AND STAY AWAY FROM ANYTHING THAT EVEN MAKES YOU REMOTELY THINK OF A TRADEMARK DAMMIT! YES! THAT INCLUDES “DINNYLAND”! (UNLESS YOUR NAME IS “DINNY”, WHICH IT AIN’T!)
Alan | Jun 11, 2009 | Reply
Mark,
Holy shit! Someone who knows exactly what to do…. Well said – except that its perfectly ok to buy names for much more than $8 – point is find keyword relevant .com’s (or imo .net or .orgs) that match your budget and build out.
Good comments – thanks
Alan
michael berkens | Jun 11, 2009 | Reply
Alan
My friend, the guy from Costa Rica here:
This is what you are missing about the new gTLD’s from the registry point of view, you say:
“There are probably 5,000 names that have any value in a .nyc extension but lets say 10,000. Even at a high registration price of $100 a year that’s a lousy $1,000,000.”
That’s not how these are going to work.
These top 5,000 domains are going to be held by the registry, not allowed to be registered for $100 a piece but be auctioned off by the registry for thousands of dollars or more, to the highest bidder, just like .me continues to do this week.
During the initial .me rollout you will recall that there were hundred of domains, not registry reserved, that had multiple backorders and those too were auctioned for a total of over $2M.
http://www.thedomains.com/2008/09/05/6-weeks-later-me-auctions-are-finally-over/
Since then domains like date.me were auctioned off at 2 TRAFFIC shows for $70K, Domainfest, Sedo and nameJet.com have had auctions as well (this week netting over $50K already) and the registry still has tons of domain still reserved awaiting auction.
If its is a decent extension which has some consumer demand and the registry operates in the same manner as .me, there is a lot to be made in the space, considering the entry point could be a low as $400-$500K
Alan | Jun 11, 2009 | Reply
Michael,
You’re right – however I was skipping ahead 5 years after all the premium names have been auctioned off and no domain investor can find a buyer for the name they paid 20k for when the extension was first launched.
At some point the bulk of the money coming in will be from renewal fees and all the woohoo for the premiums (like the .me names) will have been surpassed by people raving about the next .stupid
The registries know this and money will not be built to build the brand long term but ultimately sell the domains while they are hot.
Basically, they are advertising so domain investors buy the name … not endusers.
If people want to flip names then new extensions are fine all but for a limited time imo. My ongoing opinion is I always hope for the industry of domaining to actually evolve quick rather just be an ongoing cycle of selling whats hot today.
Switch to Pina Colada’s make us proud!
Victor Paez | Jun 11, 2009 | Reply
I still Think DOT FM is better than other ccTLD’s and some TLD’s. What do you’ll think?
David J Castello | Jun 11, 2009 | Reply
Excellent article, Alan.
You’ve spelled it out perfectly. The bottom line is that the general public couldn’t care less about these new gTLDs and, more importantly, there is no reason for them to care. With dotCom they didn’t have a choice and they came aboard to the point where, to them, dotCom is now synonymous with the Internet (I love it when gTLD proponents try to describe dotCom as “just another TLD”).
What you have here is a classic case of the tail (gTLD proponents) trying to wag the dog (public).
Alan | Jun 11, 2009 | Reply
David,
you said it better than me … exactly my point!
Alan
Jim Fleming | Jun 11, 2009 | Reply
Many things have changed since ICANN was created. ICANN was created to BUY TIME, while developers changed some of the technology.
Soon, new technology will be released. I think that your prediction may be partly right. The reasons may not be the same as your reasons.
1. Modern DNS software does not use any root servers.
2. TLDs can be automatically selected based on DLD voting.
http://www.icann.org/en/comments-mail/icann-current/msg00342.html
3. The next generation Internet architecture places an intelligent “Node” at each home/office. The network simply connects the Nodes without getting in the way.
ICANN will likely delay for a few more years while the DHT technology is prepared and tested. You are correct that many people are wasting their time in these arenas.
Your right | Jun 15, 2009 | Reply
I was once the owner of close to 100 .IN’s. I was one of many, many domainers who bought into the hype of the great .IN sale, about a year and a half ago.
Where are my .IN’s you ask? I sold every single one of them and I can tell you, that selling them for peanuts, was certainly better than losing 100% of my investment.
Now I stick with .com’s and I’m fortunate enought to be able to buy the odd .CA.
Joe | Jun 25, 2009 | Reply
Alan,
Excellent post! I have been building up my number of Web sites based upon geo-targeted domains as well as a few product specific domains. My biggest problem (as I see it) is that I have not been working in high volume + high CPC industries. That is the next step to work on…
Thanks,
Joe