Let’s be honest, what’s the chance that all the new domain extensions fail?

dot-com

I’ll start this post by saying I’m a huge fan of .COM, most of my investment dollars go into .COM and when anyone asks me what to invest in now I tell them .COM. That being said, I hear a lot of people saying that the new domain extensions are going to fail, some have even declared that they’ve already failed. Heck I’ll just be blunt, I think that’s a bunch of BS.

Seriously, what is the chance that all the new domain extensions fail?

I’d say it’s as close to 0% as you could get. Like I said above, I’m still investing in .COM and still think they hold the most value. However I do think we live in the reality where .COM can still hold its value (and actually grow in value) while other domain extensions also grow in value. Look at new extensions like .CLUB, .XYZ, .SHOP and many more and it’s clear that there’s something happening here and it’s not a fad.

I think the real challenge is that domain investor who want to play the short game are losing with new domain extensions because they don’t currently have the same liquidity as .COM. I think the issue here is a real dose of realism. When .COM initially launched people didn’t think the Internet as a whole was going to take off, and rewind 15+ years and buying and selling things online was cutting edge, still most things were purchased in stores.

As the Internet took off so did .COM, which has been fantastic for many of us who choose to invest in domain names rather than the stock market or real estate. Let’s just not let this cloud our vision of the future. Change isn’t a possibility, it’s a certainty, and there’s a reason why some of the biggest .COM investors in the world like Frank Schilling have decided to put very meaningful investment dollars into new gTLDs. It’s not because they have given up on .COM, or that they think .COM is going to slowly decline, it’s simply because they know we are moving into a world where this is real meaningful value in new domain extensions.

I see some domain investors embracing this change, I see others hanging onto the old ways, unwilling to admit that maybe, just maybe, the domain world isn’t going to stay the same for the next 20 years. So yes, I love .COM, you probably do too, but just remember that you can love .COM and still think that there are some new domain extension out there that are going to hit a homerun, heck, some like .CLUB and .XYZ already have.

The big question is, how are you going to position yourself and your own portfolio during this time to make sure that you don’t kick yourself for ignoring the opportunities that are in front of your face right now.

Okay, enough from me. What do you think? Comment and let your voice be heard!

{ 21 comments… add one }

  • John December 14, 2016, 11:06 pm

    Morgan great post and i agree but one thing you missed is that both .xyz and .club are now both approved by China and that’s big deal and imo a MUST for any new extensions. We own names like
    chepaimai.xyz ( car auction) and 88a.club but we have some GREAT pinyin names in .ws but worth zero right now without that China approval. Happy Holidays.

    Reply
  • Julio Maysonet December 15, 2016, 12:34 am

    When I returned to domaining at the end of august I looked at the new tld’s would make nice domains without doing any reading about them. I regged a few then realized that I should have stuck with just .com/.net… so now that’s my focus on getting only .com .net… just today I picked up a .shop but only because it was FREE!

    Reply
  • @domains December 15, 2016, 1:16 am

    For all the hundreds of new gtlds out there, there are barely any true aftermarket sales week after week. Biggest sales are normally at landrush. There isn’t one new gtld website I visit on a regular basis or have bought from. Country codes and legacy extensions still dominate heavily in most company choices for web presence. Still hard to say if ones like .club and .xyz will continue to grow or experience big drops in renewals. I do own some new gtlds but you can’t ignore what you see out there. Even Schilling said new gtlds are a 10 to 20 year play, and I think that’s the time it will take. Sure they are not a complete failure but the ones with stronger numbers have taken a lot of 1 cent and 50 cent reg specials to get there. I think the jury is still out.

    Reply
  • @domains December 15, 2016, 1:42 am

    After reading the first line of your post, at this point in time when we’re a few years into hundreds of new gtld choices being available, you almost make the point that they are close to a failure. When do you expect your new gtld investments will equal those in .com? On a scale of 1 being a failure and .com being a 10, where do new gtlds sit?

    Reply
  • JZ December 15, 2016, 6:15 am

    fail? no but they won’t be widly popular either. There will never be another “it” tld like .com, in my opinion. Some sites will use new gtlds and they will become successful household names but just because a handlful of popular sites use them, doesn’t mean everyone is going to. .com has a very good foothold in the corporate world that will take an extremely long time, if ever to move. companies have invested millions if not billions in .com.

    anyways, i’d have more respect for the new gtlds if they weren’t marketed like dollar store selloffs with the constant specials, 1 dollar or 1 cent buys, etc. it doesn’t tell me they think their product has value. how fewer registrations would there be if there were no deals like this and the cheapest gtlds was 10 bucks?

    Reply
  • Gene December 15, 2016, 7:34 am

    Excellent post, and also very timely.

    The catalyst that’s needed for ‘good’ gTLDs to gain traction is pretty simple, IMO – but none of the registrars have yet done it.

    For a fraction of the ad dollars they’re spending, They need to sponsor a Shark Tank-like competition, whereby they’ll invest, say, $50k in the top-5 online business ideas which will be built atop [their] specific TLD.

    So what’s needed to drive retail and wholesale demand are ACTIVE SITES and real businesses.

    The PR value alone would be worth millions.

    Reply
    • John December 15, 2016, 7:43 am

      That’s actually a good idea. .XYZ did that last year but with just the domain name alone. It was interesting and great exposure. They paid the winner $1,000. I know because we won and Daniel paid fast as could be. Happy Holidays.

      Reply
      • Gene December 15, 2016, 8:37 am

        @John – wow, that’s great to hear that you won.

        I do think that domain investors are too concerned about not getting an immediate ROI (i.e., flipping) on the gTLDs. If they would have a longer term view on the (huge) potential for end-user sales over then next decade, there would be a different mindset about the Gs.

        I’m a dot-VIP investor, and knew that unless/until the Chinese MIIT approved it for use (in China) its value would be questionable. That all changed last week when the approval came through: And considering that 90% of registrants of dot-VIP are based in China – and “VIP” has a much broader meaning in China than it does in the West -, the upside potential is now massive.

        But back to my original point, it’s up to M+M to move the needle, and shift their ad budget to fund a business-pitch contest, which will give them the highest marketing ROI they could ever dream of. And I sincerely hope that they do this sooner rather than later.

        Reply
  • flexicode December 15, 2016, 8:32 am

    Nice post Morgan. If not anything, I think the days of keyword dot coms have entered into its last few laps. Just because of the pre and post dot combination choices available. As the all important end user, I would rather take a much more meaningful, keyword rich domain, for instance: eyeglasses.vision and start selling rather than burning my dollars for eyeglasses.com without any noticeable SEO benefits. More so after google’s disclosure that it doesn’t find it important what lies after the dots. Brand is where kingcom should continue to remain unchallenged for years to come. COM will be the first choice of startups, which remains an unquestioned must have. I think ‘abbreviable’ and pronounceable 4L & 5L even 6L & 7L will remain in contention for big money for longer period, may be for the rest our lifetime.
    Here I’m in a solo brainstorming mode. No predictions as such. Just entered one of the end user’s shoes. And I think the value of anything lies in how valuable the thing is to the end user. There has to be an ‘end’ taker. The lukewarm .com turned warm and then red hot but change is the only constant.

    Reply
  • Eric Lyon December 15, 2016, 9:49 am

    While I do lean a bit harder on the .com, I have also invested in a few new gTLD’s and think there is potential for some of them. I don’t think all the new gTLD’s will make it. More will disappear and some will become almost dormant and barely cover their overheads to keep afloat. Though, I do still think that after the next big batch of new gTLD’s that are flushed into the market that the .com values may start showing more of a decline due to the saturation.

    Reply
    • Morgan December 16, 2016, 9:49 pm

      Great comments everyone! I agree that without a doubt many new gTLDs will fail, there are a TON of them on the market now. However I do think there will be a solid group that will do well and fast-forward ten years from now we’ll live in a different world, a world where it’s likely many companies are branding on different TLDs than .COM.

      Reply
  • Tom S December 15, 2016, 10:48 am

    I own some great (dot)xyz names since GA opened back in 2014. But I wonder what the Chinese approval will really do to xyz, club, and vip? How much demand is there in China for names that are in English? Can anyone comment on that?

    Reply
  • steve brady December 15, 2016, 10:56 am

    Mechanically not failing, they’re lightning fast. Enter one on any phone or pc and presto you’re there. I came up with an advertising phrase that applies to the domains:
    “If You Have A Phone, You Have Internet.Link”
    or
    “If You Have A Phone, You Have Golf.Club”
    again
    “If You Have A Phone, You Have Advertising.Agency”

    The 9-volt battery has a greater chance of failing, as the battery companies rely on toy manufacturers to release products using the 9-volt, otherwise consumers won’t give 9-volt another thought.
    Modern domains are inherently compatible with every browser/mobile device, and how often does a new piece of software get a head start like that?

    Reply
  • @domains December 15, 2016, 12:17 pm

    Another thing that is hurting new gtld’s are the premium registration fees charged on some of the best. Most new gtld’s only have a finite set of keywords that work with them, so if you price high reg fees on the best ones that are out of reach of 99% of the population, you are really restricting your appeal. So I agree with JZ above, they may not all completely fail but I don’t see any being wildly popular either. When people are choosing new gtlds they are usually killer keywords (Coffee.club) or short 2 and 3 characters. Otherwise legacy extensions and country codes are still most of the market. Look at this week’s DNJournal sales report, only 6 sales reported that weren’t .com or country codes, and it’s been similar to that many weeks. Sure there are unreported sales, but that applies to .com and country codes too. So great, we can all agree the new gtlds haven’t failed, but I don’t see them advertised on tv or in magazines, the websites I visit don’t use new gtlds, aftermarket sales are poor – I still think most of the population is really unaware of them! Would any domainer really recommend to a family member or close friend to build their business website on a new gtld??

    Reply
  • Web Hosting Jobs December 15, 2016, 6:08 pm

    It’s very likely many new TLDs will fail Morgan. Christa Taylor, who does financial models and accouting for new domain companies and registries, estimates 53% of new gTLDs are NOT making money. At a bare minimum it costs $150,000 per year to run one extension. I believe the average price is more around $200,000.

    Many new domains, even with premium renewals, are not meeting that minimum. It will be fun to watch many of these new domains and companies get massacred.

    Reply
    • Morgan December 15, 2016, 11:35 pm

      @WebHostingJobs – I rarely say this but I think you are totally 100% wrong. The chance that every single new gTLD fails is slim to none. Seriously, fast-forward 20 years from now and I can tell you that there will be companies branding their businesses on more than just .COM.

      You are correct – it takes at least $200k/year to run a domain extension, and the top new gTLDs are making millions a year. That a lot of profit and huge growth – they will be around for a long, long time.

      Reply
  • Mark Thorpe December 15, 2016, 10:53 pm

    .Com is king and will be for the foreseeable future. The more nTLD’s that enter the market, .Com’s value will just keep rising.

    To be honest, .Web will be the only new gTLD that will hit a home run and the only nTLD that will be accepted by the general public in mass numbers.

    As for .CLUB and .XYZ, they will be distant runners up to .Web and will make it to second base at best, with .Club being the best of the two extensions. .Club is peaking and .XYZ is full of hot air.
    These two extensions are also owned by domainers and mostly other domainers buy and promote these two domain extensions.

    ccTLD’s .Co and .in will be the winners in their category, with .Co being the best of the two extensions.

    Let’s not forget about .Net here either, it’s still the second best domain name extension available, second only to .Com. .Web will probably unseat .Net as second best eventually.

    Top 5 TLD’s in order IMO: .Com .Web .Net .Org .Co

    Happy domaining!

    Reply
  • Mark December 16, 2016, 1:56 am

    Great article, could not agree more!

    Reply
  • Domaining.pro December 16, 2016, 2:15 am

    I am dropping my “.com” domains to focus on new gTLDs 😉

    Reply
  • Robert McLean December 16, 2016, 1:42 pm

    Mark Thorpe has a pretty good handle on the landscape, however there must be consideration given to the city domain extensions. I see them growing steadily and being sold investment possibilities.

    .nyc 87,169
    .london 70,131
    .berlin 68,658
    .tokyo 40,969
    .köln 24,800
    .Moscow 23,350
    .hamburg 23,346
    .amsterdam 22,470
    .paris 21,756
    .vegas 16,813

    Here are the current reg numbers.

    I think .Boston will be a winner.

    I agree with Mark Thorpe and Rick Schwartz about .Web

    Thank you Morgan

    Reply
    • Mark Thorpe December 17, 2016, 2:58 pm

      Thank you Robert, much appreciated.

      Some city domain extensions will do well. I like .LA and.NYC and .Vegas but that does not mean others will not do well.

      For eCommerce I like .Store and .Shop but prefer .Store more.
      I also like .io and .Tech for tech startups.
      I am not a fan of .Blog, but .App could end up being like .Club, with companies using .app in addition to their .Com.
      .App for their app and .Club for their club.

      Overall, you have to filter which domain name extensions to buy. Too many domain extensions are promoted with an agenda behind them.
      A lot of blogs, registrars and registries promote domains based on advertising revenue, contracts or profits.

      Use common sense and go with your gut instinct. That’s my secret formula 🙂

      Reply

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