How do you measure the success of a new domain extension?

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Today TheDomains.com announced that .XYZ is the first new domain name extension to break the 750,000 registrations barrier. It’s not secret that the domain community wasn’t a fan of the Network Solutions giveaway but looking at the numbers now it’s clear that this growth is from something else, it’s spreading, people know about .XYZ and they’re about to eclipse .MOBI for registrations.

You might look at .MOBI and say, “oh that was a huge failure” and it might have been for you if you were an investor but if you ran .MOBI you’d be saying something else since 800,000+ registrations is an incredibly profitable business.

This made me think about all the debate going on about the success of new domain extensions. I think everyone will look at it differently but I think it’s important that we’re all speaking the same language.

A new domain extension becomes a profitable business once it is making more money off of registrations and renewals than it costs to run the extension. This means that there might be new extensions that the community sees as a failure that are actually profitable businesses bringing-in 8-figures a year in profit.

There’s a reason why Donuts was able to raise $200M and it’s because investors also see how lucrative owning an extension can be with a very low threshold of registrations.

Now let’s look at the other side of the coin, the domain investor. Domain investors don’t care as much about how much money the business running the extension makes, they want two key things: liquidity for their names, profit (and often a very healthy profit).

From a Domainers point of view a new domain extension with one-word names selling in the five and six-figure range is a better business (for the Domainer) than an extension that sells hundreds of thousands of domains but doesn’t have much resale value.

Now let’s look at the end-user, a normal person who doesn’t invest in domains and doesn’t own a registry. That person really just wants to get their keyword in an extension that people can remember. They actually win if there are less domains taken, registries that completely flop could create huge wins for end-users who get their top choice name. Of course if nobody has heard of the extension that could hurt the brandability of a site.

The point here is a simple one but a really darn important one. If we’re going to talk about the success (or failure) of a new domain name extension, we have to understand how we measure the success, and most importantly, the success for who.

Now it’s your turn, how do you measure the success of a new domain name extension?

Photo Credit: C♥rm3n via Compfight cc

{ 7 comments… add one }

  • New domains December 16, 2014, 7:30 pm

    I wish I had registered bullsh+t.xyz

    Reply
  • Eric Borgos December 17, 2014, 4:19 am

    Are there currently 800,000+ .mobi domains or is that how many were initially registered?

    Reply
  • Richard St Cyr December 17, 2014, 6:16 am

    Hi Morgan,
    I bit the bullet and registered over 100 .xyz and I am encouraged by the amount of registrations, I think there is a good chance that it will be a meaningful extension for people that can’t afford the .com
    See you at Namescon,
    Dick St Cyr

    Reply
  • ivan December 17, 2014, 4:19 pm

    Wow. .xyz did really good. I think .club will do good. Funny things, i don’t even register a single .xyz.

    Reply
  • Joe December 17, 2014, 6:33 pm

    Well actually we are very advanced in the registration of new extensions, I know that “xyz” is who win records but also because it is one of the cheaper this is an advantage now, I start having sales five figures in DNJournal. com, but not of xyz and if “estate” and “co.com” other than amounts.

    I think the new extensions are equal keywords that form a domain name TLD or ccTLD, the importance for reverse domain names I think this very question purchases you make for now, I see that are the most important companies register which to invest and pay for five-figure buying these domain names new extensions.

    I, for now have purchased 5 new three extensions with the same keyword personalloans.social is one of these extensions, freecoupon.xyz is the other. but have many more to buy club, guru, xyz, co.com, berlin.

    But I must sell the TLD to be good for some and not for others in the opinion of each, this going to like you pay for the domain name. Com.

    Reply
  • Andrew December 24, 2014, 2:45 pm

    Profit is achieved after you’ve collected your receivables and paid your debts. If a business isn’t able to turn a profit it will cease to exist. I can sell gumballs and turn a small profit. Is that how low the bar is set? With virtually no aftermarket or wholesale market liquidity is gone. So as you have said it becomes a simple numbers game. Sell X domains at Y price pay Z debts and collect the profit. If you can get up each day and do that successfully it doesn’t matter how you get there. And just because I don’t want to sell gumballs doesn’t mean it’s not a good business for someone else. The question I have is “Is it real?”. I would assume that it is because the other night at dinner when the check came they gave us each a free mint gumball. The restaurant didn’t get those for free. Someone is selling them and probably has a nice little business. But I don’t think Wrigleys thinks too much about it and neither do I.

    Reply
  • XLNX XYZ December 24, 2014, 3:58 pm

    I think YEAH … it is the .XYZ next top popular TLD as it is the .COM … it is more generic and yes easy to remember and to write …

    This is my XYZ domain name : XLNX XYZ : http://xlnx.xyz

    YOURS,

    Reply

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