Giving Away Domain Names; Does it Help? | DomainInvesting.com

Giving Away Domain Names; Does it Help?

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Publisher’s Note: After learning about the .Berlin free domain name offer (now discontinued), I reached out to 101Domain’s Joe Alagna to discuss the strategy of giving gTLD domain names for free. Some people speculate that it is a bad sign for the gTLD program, and I asked Joe to share his insight.

The .berlin registry rocketed to near the top in new gTLDs this week by offering their domain names for free for a limited time. .Berlin was already off to a good start. They went into General Availability in March, 2014. Over thirty thousand were registered within the first few days and then registrations leveled off to an average of fifty or one-hundred per day. With the free offer in place, they added close to seventy-thousand registrations, bringing their total Domains Under Management (DUM) to over 138,000 and making them the second most popular new gTLD to be released in the past year. I’ve been asked, “does this help?” I think the answer depends on who one is thinking of. Let me start by talking about registrants.

Do TLD Give-aways Help Registrants?

Of course they can. Domain Name Wire reported that Sedo registered over thirty-thousand of those free domains. How can they lose? They will now list them on the aftermarket and get an entire year to sell them for a profit. For Sedo and any savvy domain investor, this is likely to become a winning situation. Sure there’s some work involved to get them listed and make the sales but they’re surely going to make some money on this.

The publicity may even help those who have paid for .berlin domains because all new gTLDs need publicity. That said, there are likely some registrants who feel a bit cheated by the free offer after they’ve already paid for their domains.

Do Give-aways Help Registrars?

As a registrar offering .berlin, we (101domain.com) chose to participate in the offer and pass along the savings. Along with our trustee service, it helped many registrants not located in Berlin to be able to participate. Our hope is that many of these free registrations will be happy with their “purchase” and renew them next year. My experience however, is that renewals of free registrations is much lower than normal (likely less than 40%). Even that could be a good deal for a registrar.

That said, I worry about “the race to the bottom.” I can say from experience that registrars have a much more difficult job than registries. We have to manage multiple vendor relationships as well as customer care for a vast range of clients. A good registry will have several hundred registrars to deal with . Registrars, on the other hand, must manage a base of several hundred thousand clients or more, each with their own needs. Registrars also have a higher “cost of goods.” In addition to the wholesale cost to buy domains, they need more staff to develop registry interfaces, deal with independent registry policies, and handle that larger client base. Registrars and registrants will both suffer if there isn’t a way for registrars to make a reasonable profit in this very competitive industry.

Do Give-aways Help a Registry?

I think there are a few problems with TLD give-aways for registries. The first is that it has the potential of turning your valuable TLD into a new spam zone. Surely there will be legitimate opportunists like Sedo and in-the-know domainers who will take advantage of your give-away. But TLD give-aways also offer opportunities to spammers, phishers, and con artists who will exploit anything that is free. I’m not sure that .info has ever recovered from its reputation as a zone for spammers based on the ultra-low pricing strategy they espoused for so long. A low price strategy hasn’t made .info more valuable in the aftermarket either. My observation indicates that a low/no price strategy doesn’t help a registry in the long term.

That said, this offer has now placed .berlin in the top tier of new gTLDs in terms of number of registrations. For the uninitiated, this indicates a perception of success and popularity so it’s possible that this move can turn out OK for them. I certainly hope for this registry’s success and hope that the registry is prepared for a low renewal rate one year from now.


About The Contributor: Joe Alagna is the VP of Channel Development at 101domain.com. Prior to that he was the GM, North American Markets for CentralNic LTD. He has been involved in the domain name industry since 1999.

Reach out to Joe: Website | Twitter | LinkedIn

Comments (4)

    DonnyM

    It will not help unless your google. If people don’t use these names and start ordering extra services on top of this like hosting and cloud crap etc, they can’t make it. The only way to make money is off of extra services. Look at how many people order hosting and all the extra services with godaddy that is why they give a way cheap names for a buck.

    But it really comes down to competition. Google VS everyone else.
    Google can you give free storage, email, hosting and everything. They make it up on the back end with ads… This game is so over DOA

    Even if google did not give away domains, I would guess that people would rather give them 10 bucks a year rather than to some unknown extension that offers nothing for extra services. You could offer me a free domain name on every extension that has come out so far and I would not take the time to go register them.

    Bottom line Free domain names will not help anyone because at the end of the day no one wants to use these new names. All we have is domainers collecting garbage. Google is the only company that can possibly even make these work. Minus- >web and app.

    DonnyM

    June 19th, 2014 at 2:04 pm

    Acro

    I’m not against limited, targeted free giveaway promotions, provided that some rules are followed:

    1. Target your immediate market. dotBerlin should have kept this as a local promotion to Berlin/German residents only.

    2. Do not give free domains during launch (see XYZ) or soon after. There has to be a period of at least six months, before such campaigns.

    3. Do not hoard premium domains for “auctions” and the like. If you must allocate these premium names to a founder’s program, pick professionals and companies, not domainers.

    June 19th, 2014 at 2:10 pm

    Joe

    101domain is not a very popular registrar, so the exposure from such a huge promotion (in an industry where registration fees are higher and higher, registering plenty of domain names for free is a dream come true) may be very well worth it.

    June 19th, 2014 at 2:40 pm

    Brad Mugford

    I think you can argue the merits of free registrations. If you are talking about selectively handing out free registrations to various parties that is one thing.

    However, the more free registrations that are handed out, without any criteria, the more your extension is going to turn into a dead zone when it comes to development. The extension will also suffer as it will become extremely popular for spamming, scamming, phishing, etc.

    The two major free promotions for .XYZ and .Berlin have been complete disasters. They are a great lesson in what not to do.

    What has gone on with .XYZ and the opt-out scheme @ Netsol has greatly damaged the credibility of everyone involved – Daniel Negari, .XYZ, Netsol, and really anyone seen as close allies of .XYZ.

    Then you have Daniel and .XYZ trumpeting these obviously bogus registrations as a huge success. As of right now .XYZ has 162,869 total regs with 141,978 (87.17%) @ Netsol. Before this promotion Netsol regs accounting for less than 2% of all new gTLD. When you subtract the registry reserved domains it means around 12% of all .XYZ registrations are legitimate.

    Not only that but I don’t see anything “affirmative” about not opting out. I expect ICANN to eventually get involved and say these type of shenanigans are against policy.

    As far as .Berlin goes they have essentially handed away 50K+ domains for free to (2) parties. That means most decent terms have been registered, and if any end user is actually interested in .Berlin they are going to have to pay a premium to the domain owner.

    That really makes no sense. They have taken tens of thousands of domains off the market for nothing in return. For a small GEO registry that is going to be toxic for actual adoption and growth.

    Brad

    June 19th, 2014 at 3:31 pm

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