Let’s Talk About The .XYZ Auction On NameJet

The .XYZ and .College Advance Auctions are in full swing with BlackFriday.xyz closing tomorrow and a slew of other premium .XYZ and .College names to follow in the coming weeks. This is a different type of auction, it’s a new concept, and it has definitely seen its fair share of controversy in the domain industry. At first I was confused by the auction and how it all worked but now all the information is out there and I actually think it’s a pretty cool idea.

First let’s clear up a bunch of confusion around this auction and then I want to talk about why I think Daniel is just ahead of his time. Below are a few issues I’ve heard about the auction that I’ve looked-into more for clarity, hopefully this will clear up confusion you have had as well.

Isn’t it against ICANN policy to allocate domains prior to Sunrise?

Yes it is, but there are no allocations going on here. If there were allocations taking place it would be in violation of ICANN policy but that is simply not happening here.

If a buyer ends-up not having a name allocated to them once allocation is allowed will they lose the money they paid?

This is the weirdest complaint I’ve heard because honestly it sounds crazy to me that anyone would think a registry or NameJet would just take money and give nothing in return. If for any reason a domain is not allocated and someone has paid for the rights to have it allocated once that is allowed they will get a refund.

What about potential collisions, won’t that get in the way of these allocations next year?

The names in this auction are from a list of 100 names that the Registry Agreement says registries are allowed to allocate for themselves. That means that unless .XYZ or .College themselves decide to create collisions with themselves then there won’t be an issue.

I think this is probably the most missed point here so let me say it again. The Registry Agreement has given new gTLD registries a list of 100 domains that they can allocate for themselves. This means that the registry has the full authority to allocate these when the time comes, no collisions are going to get in the way.

Last but certainly not least, if .XYZ and .College don’t have a signed contract with ICANN how can they do this?

This is definitely a sticking point for people when I look at comments on other blogs. From my understanding .XYZ and .College are not currently being bid on or fought for by multiple people. Daniel Negari is going to run them and there’s nobody out there saying, “Hey how dare they auction of my domains, I own .XYZ and .College.” If anyone else on this planet was planning to run these don’t you think they would be making a huge stink about this?

Most of my blog readers are NameJet customers, they buy names on NameJet quite a bit and I honestly have almost never found anyone who doesn’t like NameJet. Do you really think that NameJet is going to run an auction that hurts domain investors? That would be terrible for their brand and not worth the risk of auctioning off 40 names. Like Daniel, the folks over at NameJet know everything that is being done here is comfortably within the rules…but here’s the catch, it’s never been done before.

So here’s what I think everyone is missing

Just because it hasn’t been done before doesn’t mean it’s not allowed. If you’ve met Daniel or followed his incredible success then you know he’s not some sneaky guy trying to skirt the rules. What he is doing is something that hasn’t been done before, he’s taking 40 of the 100 gTLDs that he will have the power to allocate as a registry and letting people have the chance to bid on them early.

If you look at the prices you’ll see these are not going to sell for tens of thousands of dollars like many of their counterparts in .COM would. Also who’s to say if .NET, .ORG, .CO, .ME, .TV, .APP, or .NYC is better than .XYZ, they’re just different TLDs and at the end of the day it all matters what you do with it. I see the opportunity for startup founders to get the keyword they want in one of the many new gTLDs that is coming over the next couple of years. I personally like .XYZ but you might like .APP or maybe you live in New York City and like .NYC. Everyone is going to like some TLDs and dislike others and most people are only going to like one or two.

If you do like .XYZ this offers the opportunity to lock-in a premium domain for way less than I’ve seen other registries auction off their names for. So many gTLDs have held auction like this and the prices can easily get out of the price range most startups can afford. Daniel is leveling the playing field and offering a real opportunity here.

So I want to understand, who is getting hurt here? There are no other people claiming to be the “real” operators of .XYZ or .College and indicating that Daniel is lying and stealing their gTLD from under them, these are Daniel’s gTLDs he’s worked his butt off in the domain industry for years and will have signed contracts and be running these TLDs, I don’t know anyone who thinks otherwise.

These names come from a list of 100 names that he is allowed to allocate so claims that the names will somehow be involved in collisions or Trademark disputes are just wrong, that actually can’t happen.

I think the end result here will be 40 premium names selling for a lot lower price than they have before in other TLDs. Many Domainers will say “See, I told you, these are worth so little, glad I didn’t invest in them!” And there will be startup founders and small business owners who will get domains that they’ll build great things on and acquire at a lower price than just about ever before.

People are always scared of new things. Sorry folks but like it or not things are changing in the domain world. People like Daniel Negari and Frank Schilling and companies like Donuts are shaking things up and putting the spotlight on the next domain revolution. It might not be your cup of tea and that’s fine, I personally think .COMs are going to increase in value over the next five years and I’m pretty laser-focused on buying .COMs right now.

That being said I am absolutely buying some .XYZs, some .Colleges, .APPs, .NYCs and many other new gTLDs that I believe in. I’m not going to buy thousands of names but I’ll buy a handful of each. Five years from now I think my portfolio will be 90% .COM and 10% new gTLDs and I’ll stay focused on premiums. When startups approach me interested in buying a new gTLD name I own I won’t quote them 10x what I paid or look for a big six-figure price, I also want to see everyone get their chance to carve out their own space on the web and can see myself building on many of the new gTLDs that I buy.

I will ask for a premium for my .COMs and I do think that the one and two-word .COMs I own now I will be offering for more than I am now five years from now. If someone doesn’t like that and wants a deal, that’s where the new gTLDs come in. So let’s get to the root of the issue here, if NameJet isn’t breaking any rules, and Daniel isn’t breaking any rules, and if these 40 names are on a list of 100 names cleared by ICANN for registries to allocate themselves then who the heck is getting hurt? Why would this be anything but a great marketing opportunity for .XYZ and .College and a great buying opportunity for people who want to buy these names at a really stellar price?

What do you think? Comment and let your voice be heard!

 

 

{ 13 comments… add one }

  • HowieCrosby November 27, 2013, 1:48 am

    I personally see these two extensions as non entities in the new gtld world.
    .xyz is just another failing domain not leading anywhere and .college ? being non commercial as nothing like a .org and a handful of good regs. For a college lol that has no money to pay for the aftermmarket domain.

    Best wait until the extentions that have prominence appear to give us a good indicator.

    Reply
  • Samit November 27, 2013, 2:09 am

    .xyz? Really Morgan? Save your cash.

    I see the value of .college in a limited sort of way, but without credential checking, it’s no different than keywordcollege.tld

    Agree that new gtlds are here to stay, but they are primarily going to help startups, investors can stay away, which is why it’s surprising most of the auctions are at investor-centric locations.

    Reply
  • Dan November 27, 2013, 3:57 am

    Whilst I sincerely applaud a lot of the entrepreneurialism surrounding the new .gtlds, I continue to fail to see how anyone will really be bothered by them. They only serve to give an alternative to new startups. Why would an existing college bother with .college, when a .com, .edu, .ac.uk etc respectively, has been used for years? Why remarket and incur costs in doing so? When the day comes that harvard.edu and oxford.ac.uk move to any of these new domains, I will be astonished.

    Reply
  • Leonard Britt November 27, 2013, 4:59 am

    .Web seems like an OK TLD – kind of like .Info if you just want a domain for a personal blog (non-commercial use) and don’t want to pay a premium for a decent keyword. There are some profession and geo TLDs which may have very specific uses as well. However, this hype reminds me of 1999 and perhaps many of the suckers buying into these new TLDs were just too young to remember the insanity of that time. I already have enough .Net and .TV in my portfolio so I don’t see the need to add more non-.COM. If the demand is lacking in already existing alt TLDs, who is going to buy these new TLDs at premium prices?

    Reply
  • Andrew Rosener November 27, 2013, 5:28 am

    @Morgan – Not to be cynical here, but actually you missed the biggest point of contention entirely. Only idiots and trolls believed that someone was breaking rules or any of the other complaints you mentioned.

    The most critical factor and piece of information which is missing from this equation is PRICING & TERMS! We as consumers and investors still have no indication of how the registry will price their domains for registration and renewal. Without that information you are taking a HUGE risk to buy any .xyz or .college prior to Sunrise (or buy an option for those names I should say).

    Take .TV for instance. If .XYZ registry decides to follow the .TV original pricing model, then the person who buys an option to buy BlackFriday.xyz for say $1,000 on Namejet might think they got a steal until the names start being allocated and they find out that the registry will charge $10,000 per year just to register and renew the domain. Don’t think that won’t happen because it has happened before and it already appears that is how Donuts will be handling many of their own premium strings. So I would say there is a high likelihood or chance that .XYZ or .COLLEGE could price their names in the same way, especially the premium names and especially if these options sell cheap and they are looking for another way to cover costs and turn a profit.

    Another factor involved which remains unclear is transfer rights. If you buy the option for a name on Namejet and then it gets allocated to you at a particular registrar, can you transfer that domain out to another registrar? Or will it be permanently “stuck” at the original registrar like many of the original .TV registrations (yes, many premium .tv domains can not ever be transferred away from their current registrar, which gives that registrar a monopoly on pricing for your domain and it’s renewal fee)?

    In my opinion, this is a fools game. Would you sit down at a black jack table if the house didn’t tell you the rules in advance? How do you know the deck isn’t stacked?

    How can you enter into a contract with someone before the terms have been set? You are buying an option to purchase something, but you don’t even know what exactly it is you’ll be getting. BlackFriday.xyz with a $10 registration cost and $10 renewal is worth one thing – but if it has a premium registration fee and premium renewal fee and is prevented from being transferred to other registrars – that is something else entirely and worth a whole lot less than the former.

    Just my 2 cents…

    Reply
  • albert November 27, 2013, 9:53 am

    Love your comment Andrew. I have to say that when .TV first came out, I wanted a premium domain and it was waaaaay too expensive, however, I thought to my self, why not???
    I mean, everyone will be able to remember what a .TV is. Even our local channel 4 in Los Angeles had signed what I believe was a 10 year contract to have NBC4.TV.
    Well, once that contract ended, they got rid of the .TV and are now known as the nbc4.com.
    There was a lot of hype about .TV back then as there is a lot of hype about .WHATEVER today.
    I am so glad I did not pay for the premium .TV even though it seemed very tempting.

    Just wondering what is the difference between .TV back then and .WHATEVER today???

    Reply
    • Morgan November 27, 2013, 10:55 am

      Great question @Andrew and I was able to get the answer which hopefully will close the loop on this for everyone.

      Here are the pricing terms you have been waiting for:

      1. .XYZ will not be doing crazy inflated renewal prices like .TV, they will be standard renewal fees like all the other TLDs we know and love.
      2. The reg fee for .XYZ names will be $9.99 or less

      Let me know if this clears it up, I agree that it would have been great to have this information out before the auction but that being said, Daniel and his team are trying something new so it takes time to get it all perfect.

      Andrew – let me know if this answers your pricing and terms question. I totally agree, this info should have been out earlier but now that it’s out do you see much risk for buyers?

      Reply
  • Andrew Rosener November 27, 2013, 11:08 am

    @Morgan –

    Yup, that clears it up, thanks for taking the initiative! As sharp as Daniel is, I’m shocked he wouldn’t have put this information out there in a very public way prior to the auctions beginning.

    Anyhow – all good now! Bid away…

    Reply
    • Morgan November 27, 2013, 2:31 pm

      Good to hear, thanks for asking the question, it was a good one and it looks like one that many other people had!

      Reply
  • Konstantinos Zournas November 27, 2013, 3:44 pm

    wasteoftime.xyz

    Reply
  • Ryan November 27, 2013, 6:05 pm

    For gtlds to be successful, they will need the end users, and a larger audience, the domainers cannot sustain these extensions for extended periods of times as we have seen in other roll outs. I don’t know how many of you were logged on when sedo started the .mobi category killer auction, it was insane. I think Music.com topped $600K, they shut down the auction due to servers crashing, people who lost bids were angry, looking back, best thing I ever did was to sit on the sidelines. Some great keywords went that day such as Games.mobi etc… but the extensions sucked

    What are these domains worth today? percentage return…Does history repeat itself?

    Results from 2007 Sedo Auction:
    music.mobi $616,000
    games.mobi $401,500
    sports.mobi $101,000
    movies.mobi $82,000
    videos.mobi $51,000
    photos.mobi $51,000

    Reply
  • Ryan November 27, 2013, 6:06 pm

    Sorry above should read music.mobi, not .com, bad habits are hard to break

    Reply
  • Liam April 13, 2015, 10:23 am

    The hype says this will allow the world to do what it already has been doing, having websites.

    Advertisements/Marketing/Propaganda continuously tricks the world into thinking amazing things about something they already have but with a new name or shiny box. Marketing makes money. Who is wrong? Hard to tell. People should be smarter then they are. Wait I am people. I should go learn something or there is that bag of potato chips on the couch. I guess I will just watch TV. I should buy a domain name, moooo, weird I just mooo’ed.

    Reply

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