What if Domain Investors Buy the Good gTLD Domain Names?
Domain investor (and Founder & Director of the Intellectual Property Division at Heritage Auctions) Aron Meystedt shared something interesting this week: “With all of the gTLD rollouts, it’s obvious that domainers are buying all of the word combinations that actually make sense.” He further added, “The gTLD program was supposed to ensure that EVERYONE could receive the domain they wanted. In reality, domainers are going to buy all the good word combinations and end users are back to square one.”
After doing quite a few searches, it seems like he might be on to something. It’s not surprising that domain investors have purchased so many of the new gTLD domain names. Despite the fact that domain investor losses were considerable following previous TLD launches, domain investors seem to be buying new domain names en masse. Some see the potential in these new TLDs and others don’t want to miss a buying opportunity they regret in the future. Whatever the case may be, there seem to be more new domain names ending up in the portfolios of domain investors rather than being registered by end users.
In my opinion, this does not bode well for the domain registries, at least in the short term.
If domain investors own the best keyword gTLD domain names, they will likely become less affordable to end user buyers. Faced with the choice of paying a premium price for a .com domain name or a premium price for a new .keyword domain name, there is less of an advantage to buying the new gTLD domain name.
Without development on the new keyword domain names, there will be less consumer awareness. If consumers don’t know about these new extensions, they will remain confusing when they do see them being used. I would fathom a guess that the average Joe doesn’t have a clue about the new TLDs now, and without adoption and marketing of them, it’s going to take quite a bit of time for that to happen.
Domain investors provide much needed liquidity to registrars and registries. Some of us are spending thousands of dollars to buy various keyword domain names in the hopes of selling them profitably. This initial cash influx may be harmful to the registries in the long run though. If that happens to be the case, this would also be harmful to the very domain investors who are speculating now because their investments may not appreciate as much as they would if there was greater awareness.
Perhaps this will prove advantageous to registries who begin selling their domain names later on when domain investors have already spent their wad of cash on the first rounds.
I don’t know how to solve this issue, but it’s something to observe as more new TLDs come out.
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