Investing in .CO Domain Names

Investing in .CO Domain Names: My Current Thoughts and Outlook

47

.CO Domain NamesI am writing much more about .CO domain names than I ever did about .MOBI or .EU or any other new domain extension. I want to make a few things very clear about my feelings on .CO, and you can take it for what its worth knowing the .CO Registry is an advertiser and that I own less than 10 .CO domain names.

With Google’s consideration that .CO is an international domain extension rather than another ccTLD (despite the fact that it is actually Colombia’s ccTLD), I believe .CO domain names have the ability to perform well as websites in any country. I believe that this will mean businesses will be able to successfully build on .CO domain names.

I can only assume that companies like Go Daddy and the .CO Registry will continue to market .CO domain names, targeting consumers and small businesses alike. To my knowledge, this type of mass awareness campaign has not been done before for other extensions, and I think consumer awareness is key to .CO domain values.

I believe that because Google announced it will index these domain names like other extensions combined with the awareness campaign undertaken by the world’s largest domain registrar, .CO will become a widely used domain extension… in the future. In addition, with gTLDs expected to be released in the future, consumers will slowly adjust to extensions other than .com. It may not be quick, but I do think it will happen.

Personally, I do not believe .CO domain investments are a wise short term play. If you buy a name to flip it this week, month, or year, you could be out of luck.

My domain investment business model primarily revolves around quickly flipping domain names. It’s a cash flow business for me. As a result, I am not investing a whole lot in .CO domain names right now. Simply put, I don’t have $xxx,xxx in liquid capital that I would use to invest in .CO domain names (to put on the sideline) for a long term investment of potentially several years. There may end up being some great buys in the big Sedo ,CO auction, but we probably won’t know for some time.

If you do make .CO domain name investments, you should do your due diligence. I don’t see a big aftermarket for them amongst domain investors right now, although that could conceivably change after the Super Bowl. Without that, there is limited liquidity. For instance, if I pay $25,000 for a city .com name, I am generally fairly positive I could sell it at wholesale for $20,000+, and that can’t be said about .CO at the moment.

I think it’s actually a good thing that we aren’t seeing huge sales that would encourage others to spend more than they should. It doesn’t appear that there is a bubble forming, which is a very good thing, because bubbles in the domain space aren’t good for the majority of us. When they burst, values plunge as the liquidity is not there to support the valuation.

Some of the comments I hear is that Go Daddy and the .CO Registry are simply hyping this extension and it’s going to end up costing domain investors a lot of money. The irony of this is that every business needs to do marketing for consumer awareness, and it’s the consumer awareness that will help make .CO domain names valuable. Without it, consumers and businesses wouldn’t buy the names, and without that, domain investors wouldn’t make much money unless they developed them.

The bottom line from my perspective is that .CO domain names may turn out to be a fantastic investment in the future. For now, I think it’s great to see the Registry and its registrar partners focusing on a gigantic awareness campaign. I am happy with my current investments, and if I see good names at good prices, I will invest for the longterm.


About The Author: Elliot Silver is an Internet entrepreneur and his company earns revenue from domain names. Elliot is President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Elliot is the publisher of DomainInvesting.com. Read this blog's disclaimer for information about the publisher, comment policy, disclosures, and conflicts.

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Comments (47)

    James

    Hi Elliot you made some very good points their but i do disagree about one point you made making a quick flip, I made 3 quick flips from .co names i regged by contacting end users i made a total of $7,200 also it is possible to make a quick flip by buying .co names for x,xxx but they must be category killers also type in traffic is a good selling point, I recently invested $5,000 in a one word generic with type in traffic i do noth think you can go wrong buy buying somthing solid, The value can only go up for these gems but you do need to buy quality only.

    January 26th, 2011 at 2:13 pm

    BullS

    The Castello brothers will send you a case of the finest wine if you advertise palmspring dot net/co

    You would do the same if someone put in lots of money on burbank.net/co

    Rule #1- dot com is KING.
    What don’t you understand!!!! That the 1st think I learn from reading all the blogs.

    If all you all just concentrate dot com and dump all—the stock of dot com will go up.

    The future of dot com is in your hands.

    January 26th, 2011 at 2:39 pm

      Elliot

      @ Bulls

      Right now you are right, but as you can read, I am not talking about right now.

      January 26th, 2011 at 2:53 pm

    Jp

    I’ve been thinking about co alot too. I think the category killers are worth it for a bargain and then save for the long haul (like most of Mike Mann’s names) however I think domainers ourselves could be what kills .co at the end of the cycle. If we take all those keyword domains that would be awesome
    To own in .com off the primary .co market we are just increasing the market penetration ability for real end users who r probablly skeptical enough for reg fee to be the real jumping off point for them, thus decreasing the number of end users who would otherwise decide to put up and promote a service on .co.

    A lot of End users won’t be shocked to see Shopping.co only available on the secondary market but perhaps not ready to the risk on branding on ShoeShopping.co at secondary market prices. They may feel more comfortable doing a new reg on something like OnlineShoeShopping.com Or even paying secondary pricing for that .com as a branding mistake is expensive to fix down the road if .co doesn’t become special.

    For .co to work enough small businesses (not overstocks) are going to have to be able willing to cross the barrier. The overstocks are a good first step though in building confidence for the little guy.

    January 26th, 2011 at 2:47 pm

    Jp

    Most 2-3 keyword .co domains I search for are already taken by domainers. Not only Will small businesses be skeptical on paying over reg fee for a new extension, but let’s face it we are making it more difficult for them to buy a crappy.co too as the checkout process is much simpler (in general) at NetSol or godaddy than having to make a deal with a domainer, waiting for payment, the transfer process, etc. The harder it is to buy any sort of product will always have a negative impact on sales as well. Unless it is a domain that they are just dieing to have then as generalization most people’s attention span isn’t that great either. Easier to jus search for something else. What co needs is broad maker penetration to create a .com like value.

    January 26th, 2011 at 2:53 pm

    Joe

    Great article. Anyway I think there is liquidity in .CO right now as well (obviously at a different level than .com). The two levels will get closer and closer as time passes.

    January 26th, 2011 at 3:08 pm

    Kevin M.

    “”if I pay $25,000 for a city .com name, I am generally fairly positive I could sell it at wholesale for $20,000+””

    @Elliot, uhhh.. perhaps your .co enthusiasm is clouding your business senses?? ;)

    January 26th, 2011 at 3:11 pm

    Elliot

    @ Kevin

    uhhh… I said what I meant and meant what I said.

    Obviously when I invest in a domain name (like a city .com in my example), I believe I am paying its real value and hopefully less than what it’s worth to someone else. However, I realize that if I am wrong, I know that I can sell it at a bit of a loss. For instance, when I bought Burbank.com for a lot of money, I knew that even if I had a sudden emergency and needed cash the next day, I could get very close to what I paid at the very least.

    If I buy Art.CO for $25,000, there might not be anyone who would pay $20k or $15k… so my loss might be greater, at least right now.

    At this point in time, there are more buyers (and thus more liquidity) for .com domain names than .CO. I suspect this will change in time.

    My example is illustrative of what I think the liquidity situation is for prime .CO names vs. .com names right now.

    January 26th, 2011 at 3:17 pm

    Kevin M.

    Ohh. I thought you just misprinted/typed in your example. Didn’t catch the ‘worse case’ analogy.

    January 26th, 2011 at 3:32 pm

    Mark

    Hello:

    There seems to be quite a bit of hype over a sixty second spot in the big game. Sixty seconds, that’s it. Yes, 100 million viewers but sixty seconds will not create a brand in minds of beer drunk, sugar induced, pizza stuffed, potato chip popping distracted viewers.

    .co is an alternative, that’s it.

    IMHO

    January 26th, 2011 at 3:39 pm

    Elliot

    @ Mark

    Although you are right, there is tremendous media coverage before and after highlighting and rating the commercials.

    January 26th, 2011 at 3:42 pm

    chris

    excellent article

    I do agree with you. I think a quick flip is not easily possible at the moment. We will see what happens after the superbowl and yes godaddy is doing A LOT to promote this extension.

    I own about 30 .co domains – have been steadily acquiring them since late year.

    I know you just wrote a huge article on not spamming your posts, but I just created a post about .co domains – and if they are a “bubble”

    January 26th, 2011 at 4:34 pm

    Nadia

    I think .CO has longterm potential, too, which is why I found it strange that in response to my question about selling vs. holding, you tweeted “sell.”

    I’m sure my post explaining the whole thing wasn’t read, so I’m not sure what went into that assessment. I appreciated the response, but wasn’t sure where it was coming from.

    I’ve seen a lot of names taken up by domainers, but have run across just as many that were end user regs’ where it was clear the person/company owned 1-2 .COs. For example, Jacuzzi.co and Mentor.co, the latter of which is owned by Johnson and Johnson.

    The Superbowl ad is exciting, but Sedo almost seems too desperate for low reserve submissions. They seem to be chomping at the bit for the second auction. But most of my names are ones I don’t want to submit at the $250 – 500 level.

    If this auction were a year from now, that would really be interesting.

    January 26th, 2011 at 4:37 pm

    Elliot

    @ Nadia

    I misread what you wrote… LOL

    January 26th, 2011 at 4:39 pm

    jp

    @Nadia

    Don’t worry the same/or similar auction will be run again next year.

    January 26th, 2011 at 4:51 pm

    Nadia

    @ Elliot LOL. No problem.

    @ JP I’m not worried. Sedo already wants to hold a second auction after the first one. Talked to Frank from Sedo this morning. You’re right, though, there are more to look forward to. I’m personally busting my a** reaching out to end users about the 2 names I have in the first auction.

    January 26th, 2011 at 5:15 pm

    Dominik

    i bought some big company names, but im wondering if these .co are worthless.

    January 26th, 2011 at 5:49 pm

    Ryan Colby

    As the broker heading up the .co auction I can see lots of interest in .CO already in advance of the event. Calls have been coming in from corporate end users, and I think that’s where domainers can potentially capitalize on this. In business, timing is everything.

    January 26th, 2011 at 5:54 pm

    Rich

    Elliot@
    Thankyou for the articole,i have enjoyed it a lot,and i know why…because i agree with what you said.Ha ha

    JP@
    There are still some very good domains out there,one word you just have to work harder.I bought some yesterday.Here is a nice one on the house,because Elliot whrote such a nice articole.Harve.co its a city in Montana or France,take your pick.Here is another one competing.co.Good luck

    January 26th, 2011 at 7:55 pm

    LindaM

    One thing that isnt going to change is that .co is similar to .com . simple as. The world runs primarily on .com, making .co always the cybersquatters/pirates/criminals/losers’ etc 1st choice. Of course there are legit businesses on .co’s too, but face it – its a bad neighbourhood and always will be seen as such. Its not something that people (imo) will learn to accept in large numbers, like say a hyphened .com, or a relevently local cctld. It will always look like A MISTAKE OR TYPO ERROR to a significant chunk of people.
    With the possible exception of very short or single character .co’s , like o.co, I really just dont see lots of business being done on .co’s without the same entity holding the .com.
    In some ways this might make .co worth even less than other less similar cctlds that are at least objectively different.
    Maybe I’m wrong, but I’m still not playing.

    January 26th, 2011 at 7:57 pm

    Jp

    @Rich

    So since you’ve spent some
    time doing the domainer reg search thing in the .co space, what percentage of end-user new reg 1st and 2nd looks will be available for new registration?

    At the landrush new registrys perhaps should limit the number of domains you can register without special request to like 5 or something for the first year just to leave some seeds for the end users to plant.

    January 26th, 2011 at 8:16 pm

    Corey

    @LindaM Bad Neighborhood? I haven’t gotten that impression.

    Somewhat vacant or underdeveloped maybe, but not rife with spammers or scam artists at this point.

    The spam and jam, churn and burn guys would rather go for previously used, but generally available dropped names they can buy cheap, rank quickly and dump in a year. $20.00-$30.00 domains on a new extension are not for that crowd.

    If you’re talking about trademark squatters and cheats, I’ve heard .CO has been very active to return those type of registrations quickly to trademark holders. The smart team at .CO isn’t going to let intellectual property issues kill their momentum. I don’t see this as a pervasive issue so far.

    January 26th, 2011 at 8:53 pm

    Jeff Schneider

    Hello Elliot!

    I respect and admire your LOGIC and Intellect. This .co thing is a TEST MODEL . Although I respect your opinion I will stand firm with my past comments on the subject.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

    January 26th, 2011 at 10:52 pm

    mike

    I really think this .CO nonsense is getting out of hand- in terms of people ignoring the HUGE negatives of .CO. People don’t realize how serious of an issue .CO can turn out to be in terms of the “likelihood of confusion” with .COM’s for trademark infringement. Literally every .CO domain name can potentially be found to infringe on a .COM. It is literally a .COM with a missing “M”. I think this is a legal disaster waiting to happen. Even a generic .CO name, if parked and spewing one link to the .COM, which is definitely a possibility for many parked .COs, may face difficulties.

    Then there is the fact that this is the ccTLD for the country of COLOMBIA. Combine these two considerations and you really think that Google/Bing are going to rank .CO anywhere close to .COM, .NET, and .ORG- all global extensions, and even all of the rest of the well-established, non typo-looking ccTLD’s ? Sure, O.CO and T.CO and any other major corporation using the extension will rank at the top. I don’t buy even for a second Google’s statement that they will rank .CO with everything else because it’s bad for their business. And let’s face it, Google is a corporation so they aren’t going to want to screw around with it. I really don’t think any domainer should be encouraged to gamble on this unless they have a huge bankroll and are pursuing pure generic and premium names.

    January 26th, 2011 at 11:14 pm

    jp

    @Mike

    I think we are just supposed to ignore and accept the whole co is Columbia thing. I’m not saying that we should but that’s what we’re supposed to do.

    On the flipside at least, .com being based in the US is not without drawbacks as well. Some people might actualy prefer the country of origin be Columbia instead of the US, maybe that’s why we are supposed to ignore that part.

    January 26th, 2011 at 11:28 pm

    mike

    @jp

    My bad- I should clarify what I meant by COLOMBIA. .COM actually means “commercial” and is therefore naturally applicable to any business anywhere around the globe. Columbia is just for one country as opposed to the globe, so I was pointing to the general difference between TLD and ccTLD. And while I don’t want to put a country down, I would personally find it difficult to argue that a domain name controlled in Colombia is more protected than one in the US, which has a lot of experience and legal precedent already developed for domain names. At least in terms of predictability.

    And I should also add that my post wasn’t directed toward Elliot or any individual, since I actually agree with Elliot’s cautious plan of only biting if the price and name are right. And he also likely falls into the category of having a larger bankroll relative to that of your average domainer. I just think that the potential problems with .CO are being conveniently overlooked by overly-optimistic domainers, as can easily be seen by looking at the comment sections of forums and blogs.

    January 26th, 2011 at 11:48 pm

    JC

    I’d have a lot more respect for the article as a whole if you quit putting a referral link to the .co registry every time you posted.

    That said you’re correct in your assessment that anchor prices have not been set. A $20K .com is likely worth $20K. A $20K .co could be worth anything from $30-$20K

    I would urge people to think about buying aftermarket names for about $500+ range. Not only are they possibly wholesale overvalued – but given the type of investor we’re seeing it has likely been spammed to the first 500 obvious targets.

    From what I can see most sales are still in the sub $2K market with groups protecting their .com investment – or maybe taking a value risk. It’s not a very liquid end user market.

    A superbowl ad for Godaddy.co will do nothing but send users to Godaddy.

    January 27th, 2011 at 12:00 am

    em

    @Mike

    A lot of the control of .co is in the hands of Neustar, an American company. They handle most of the back-end.

    January 27th, 2011 at 4:31 am

    David L.G

    Godaddy has done the right thing. As a registrar, this is normal to push some extensions, which have more domain names available. Without new extensions, their business will only go down. So objectives and success of registrars are definitively different from domainers. However, it’s clear that domainers can make money with .co even in a short time. I am not really sure it will be a long-term trend but I do believe some extensions will emerge very soon and change definitively the market.

    January 27th, 2011 at 7:35 am

    BOULDER MEDIA

    Can a ccTLD ever evolve into a gTLD?

    Thanks.

    Peter
    BOULDER.com

    January 27th, 2011 at 8:25 am

      Elliot

      @ Peter

      Congrats on the Boulder.com acquisition.

      I think the answer is no, technically speaking. If Google treats a ccTLD as an international/global extension, I can’t see why it couldn’t be marketed that way though.

      January 27th, 2011 at 8:27 am

    420 Colorado

    I’m in Colorado and love the .co extension. Medical marijuana is so popular here with thousands of dispensaries selling the medicine, and I scored about 20 .co’s like mypot.co and http://420.co for medical marijuana. I got all of them for $300 each in the auction phase, and no one else bid, well maybe on one of them, mmj.co, but I got it anyway for only $10 more.

    They are now worth 10X as much. For 420.co, thc.co, and mmj.co, I have gotten offers on all of those for no less than $3000.00 each.

    However they are not for sale, I’m building websites for others in the industry with the .co because it works awesome for Colorado.

    January 27th, 2011 at 8:42 am

    Rob Sequin

    Just because domain speculators and companies buying a .co to protect their brand does not mean that the general public will care about .co let alone start developing on it.

    The hype will die down.

    The Super Bowl commercial will be forgotten.

    Another extension will take the stage.

    Speculators will let their .co domains drop.

    .co takes its place with all the other non .com extensions.

    If history is any guide, get in and get out… unless you still love your beanie baby collection -:)

    When I see developed .co websites in search engine results, I will change my mind. Until then it’s all hype and speculation… NOT an investment.

    Good luck.

    January 27th, 2011 at 9:13 am

    BOULDER MEDIA

    I purchased BOULDER.co as an aftermarket sale, this was a back up to acquiring BOULDER.com.

    Peter
    BOULDER.com

    January 27th, 2011 at 9:14 am

    Jp

    @420

    Well done. Personally I think the best domains in alt extensions are the ones in which the extension actually adds to the intrinsic value of the keyword or simply adds value to the domain. You hit the nail on the head IMHO.

    I still think strong keywords are good like shopping.co, and in the long run maybe worth more if the extension really flys, but for now what could be better than stuff along the lines of Stuff like Ski.co

    January 27th, 2011 at 9:16 am

    em

    @Rob

    I don’t think it helps to speculate about the speculators.

    January 27th, 2011 at 11:05 am

    AB

    @ Ryan Colby

    I had a pretty premium, generic spanish .CO denied fo rthe auction without an explanation. I emailed suuport to ask why and I haven’t gotten anything.

    Is there anyway to know why the name wasn’t picked?

    Thanks

    January 27th, 2011 at 12:40 pm

    Sam Barraclough

    Another interesting and informative article Elliot, thankyou once more, from a relative and definitely still learning newbie in the UK.

    In regards to:
    “@ Ryan Colby
    I had a pretty premium, generic spanish .CO denied fo rthe auction without an explanation. I emailed suuport to ask why and I haven’t gotten anything.
    Is there anyway to know why the name wasn’t picked?”

    Indeed, personally I submitted what I believed to be some quite strong keywords (including DEPARTURES.CO & SEEKS.CO), but I suspect there will be hundreds more like us questioning Sedo’s judgement. I assume that they wanted to keep it low in quantity of names for a valid reason.

    Cheers, Sam

    January 27th, 2011 at 3:02 pm

    Nadia

    @ Sam

    Seeks.co isn’t a premium name. It doesn’t actually make sense, because of the plural. Departures isn’t bad, but it’s not really premium travel term.

    January 27th, 2011 at 3:46 pm

    420 Colorado

    Since we are getting specific:

    is http://www.inhale.co premium because it’s one word? I own that one and use it with my Business Catalyst account.

    is ‘ColoradoMarijuana.co’ or ‘MarijuanaColorado.co’ premium, I also own both of those. Is one of these two better than the other for any reason?

    January 27th, 2011 at 6:25 pm

    Elliot

    @ 420

    In my opinion, they aren’t “premium” to me, but it really depends on who your target audience is. Someone else might like them but as a domain investor, I don’t think they’re all that special.

    January 27th, 2011 at 6:41 pm

    Robert Cline

    @BOULDER MEDIA

    I have BOULDERS.co

    Any interest in this?

    January 27th, 2011 at 6:54 pm

    Victor Paez

    I think DOT CO will do ok. But, most people will type in DOT COM when they are trying to type DOT CO. And I would think DOT FM and DOT TV should do better because those ccTLD’s are easier to remember. DOT COM’s will always be KING, but if you have a gerneric name with a good ccTLD, I think it should do good. I did buy some DOT CO’s:

    Switchboards.co
    Compacts.co
    ResidentialMortgages.co
    Condotel.co
    SolarPhones.co
    YFP.co
    WG8.co

    January 29th, 2011 at 1:36 pm

    Voltaire

    my .co’s are denied too: eurosports.co, multivitamin.co, dietarysupplements.co, atty.co, refunds.co and teenmodel.

    January 30th, 2011 at 11:16 pm

    damon

    People are quick to poo poo .co, there are many factors that will shape the future of this domain but the main ones are getting it out in the public constantly and for domains to develop with good seo and not just park their domains.
    Idiot troll that compare it to .biz, .me or .tv are either simple or inexperienced..Co has been around since the industrial revolution. Even prior. People should get their heads out of their asses and lookout its long term investment potential.

    March 26th, 2011 at 8:18 pm

    Jon

    .co is the future period. The .com
    database is all but used now up with
    over 110,000,000 current registrations.

    don’t be fooled .co is the next big
    extension. forget about .us.net.org
    everybody got burned, but there is
    no other extension except .co that
    can rival .com on the horizion.

    this information is privy but already
    there have been over 2.2 million .co’s
    registered and the information wont
    be given to the public until the
    registry is fully cleaned out of
    really good names.

    If you dont buy .co now you likely
    will be backordering it later.

    Best of luck to everyone, you have
    a great blog Elliot.

    January 4th, 2013 at 4:53 pm

    Victor

    We all know that Dot COM is KING!!! But I rather have Cars.co than myCars.com. If you have a generic one or two word Dot CO, then it can work.

    January 5th, 2013 at 9:14 am

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