Why I Am Not Investing in .WS Domains | DomainInvesting.com
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Why I Am Not Investing in .WS Domains

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If you know much about me, you know that I almost exclusively buy and own .com domain names. I own a handful of non-.com domain names, but the vast majority of my investments are .com domains. I don’t anticipate that will change in the short term.

Yesterday, Braden Pollock published an article about why he bought a self-reported six figures worth of .WS domain names. As you can see, there were a lot of comments, and I think having a public discussion like this is a good thing.

This morning, I want to share a bit about why I wouldn’t invest in .WS domain names (at least not now).

In my opinion, buying domain names like these is gambling that Chinese buyers will want to buy them at a premium price above what I paid. Buyers based in China seem to be buying a ton of non-.com domain names, and I still don’t understand the Chinese domain investment market. I have seen various extensions selling well in China – .Club, .XYZ, .Top…. etc. as examples. I still haven’t bought any of these because I don’t understand why certain types of these domain names are being bought in such huge quantities. Maybe that shouldn’t matter to me, but it does.

If I were to buy .WS domain names and Chinese don’t want to buy them from me, then I think the names will have limited appeal elsewhere. This is especially the case if I were to focus on Chinese-centric names. My guess is that they don’t get enough organic traffic to generate enough revenue to pay for themselves each year, and I would not develop a .WS domain because it’s difficult enough to gain traction with a .com.

I have no idea how likely it is that these domain names will be in demand by others. My guess is that some .WS domain names will sell, but I think it would take a large investment to yield enough of a return for a material gain. I would rather spend that capital on buying good .com domain names where I think there is far less risk.

Yes, in the last couple of years, I missed out on buying “Chips” and other coveted Chinese-focused domain investments for the most part, but I am not going to start chasing trends. There is too much risk doing that. I wish Braden and others well with their investments (because I always wish others well and their success wouldn’t equal my failure), but .WS investing is not for me.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (25)

    Leonard Britt

    What we are seeing now with all these new TLDs and numeric domains where there is no end user supporting the market is comparable to what occurred in the late 90s with internet stocks. Companies with no earnings were getting funded for millions of dollars and quickly burning through that initial investment. Regardless, the stock prices of those companies kept going up because the presumption was someone else would pay more tomorrow. Eventually many of those companies failed and investors took a bloodbath.

    When the .COM bubble burst a similar situation occurred in many US real estate markets. Pre-construction condos were a get-rich quick scheme – put down 5% on a condo and cash out with a five-figure profit when the development was finished. In 2006 I was with my then girlfriend (now wife)at Bayside Marketplace downtown Miami and counted at least fifteen condo developments under construction. It was out of this world. Several years later South Florida real estate prices had plummeted some 60% from their peak.

    In the case of domains, if there is no domain buyer and no logic to spending additional resources on development, you take a 100% loss. If you continue to renew essentially worthless domains, you exponentially increase the loss beyond the initial investment. While I can see LLL.COM domains having an end user market, I do not understand and will not participate in all these extremely speculative extensions or the numeric domain mania. However, as someone commented yesterday, domaining by its nature is a speculative activity.

    February 26th, 2016 at 10:30 am

      Tony

      Very well stated. Totally agree with the late 90’s internet stock analogy.

      I don’t necessarily agree with the statement domaining is by nature a speculative activity though. It was back in the 90’s but today we all know what kinds of domains have intrinsic value. Those would be one or two word .com’s with mind share/search volume, LL.com’s, LLL.com’s.

      I have no negativity towards some of the deeper pockets trying to ride the Chinese Express. It has led to a substantial decrease in competition for some of the kinds of domains I mentioned above. It’s been a real blessing.

      In reply to Leonard Britt | February 26th, 2016 at 11:26 am

    David

    Very well put. My sentiments exactly. I appreciate any business (.WS) doing it’s best to promote and make sales.

    One point that I would make is that there are so many extensions to consider for investment other than .WS or .com. The competition among alternative TLD’s is very stiff. I too wish them the best.

    February 26th, 2016 at 10:33 am

    Gene

    I’ve said this elsewhere, but I’ll say it again. Firstly, congrats to those who have benefitted from the demand from China for numeric – I missed that boat.

    Regarding numeric…it’s impossible for most people to understand how a long-string numeric (regardless of whether it’s a TLD, ccTLD, or gTLD) is a ‘store of value.’

    The entire POINT of domain names is to serve as a short-hand internet address, upon which a brand can (potentially) be built. So I’d love someone to explain how a ridiculous string like ‘896482.com’ will EVER serve as a website destination address — or serve to build brand value.

    The ONLY THING that the buyer of numeric strings beyond, say, five (5), is banking on is the ‘greater fool’ theory. And the only reason why I would even include five digits is to acknowledge the importance of zip codes.

    And one more thing: If you’re a buyer of something like NNN.ws, and think you’ve hit the jackpot, you will may find yourself with a trademark/UDRP battle on your hands with the company that built their site on NNN.com…or NNN.net…or NNN.de.

    February 26th, 2016 at 12:27 pm

      Matt

      The whole point of stamps, are to send letters. Yet, many people collect them but never use them.

      Just because something isn’t used for what YOU think it should be used for, doesn’t mean it’s not valuable to others.

      In reply to Gene | February 26th, 2016 at 12:47 pm

      Elliot Silver

      Interesting perspective – thank you.

      In reply to Matt | February 26th, 2016 at 12:48 pm

      Leonard Britt

      I would exclude zip codes as a potential market for website development. Having launched several local geo domains but being unable to attract advertisers or make more than pocket change from Google AdSense, there is no way a zip code website is going to work unless you are in an exclusive high-end area like Manhattan or Beverly Hills. I reached out to companies advertising in other local publications and went through local shopping centers saying I own FloridaCity.TV No interest despite putting many hours into content development. Imagine doing the same but saying would you like to pay for a banner ad on our 75647.tld website? They will laugh in your face.

      In reply to Gene | February 26th, 2016 at 12:52 pm

      ikehook

      There are actually Chinese sites that are over a decade old on long numerics. Some have 4’s and 0’s in them too. I’m talking long 6-9N.

      The bottom line is that numbers have meaning in the Chinese culture just like letters do. They have sounds the correlate to different words and mean different things in combination.

      It makes me laugh because they don’t even use Latin characters, except with pinyin which was only developed to better integrate and communicate between east and west. So follow me here… they don’t naturally use fricken letters, yet we think we know about Chinese number and their meaning or lack there of? Why aren’t we attacking letters too? The Chinese have always had numbers but our Latin letters are relatively recent.

      Saying you’re more susceptible to UDRP with a NNN.ws because there might be a trade mark on NNN.com, net or DE seems a little ridiculous. If that’s the case than any extension for any domain is as equally vulnerable.

      In reply to Gene | February 26th, 2016 at 12:54 pm

      Joseph Peterson

      @ikehook,

      Your points about Chinese in relation to numerals and letters are spot on.

      It’s important to distinguish between

      (A) The long-term Chinese domain market based on usage. Here value is stable. Prices don’t appreciate anymore than we’d see among English keyword domains. Domains would be flipped as part of the normal wholesale-to-retail supply chain.

      (B) A long-term Chinese domain market analogous to currency trading. This idea has some problems, but let’s assume (for the sake of argument) that it’s sustainable. In that case, prices would be fairly consistent day to day. Fluctuations up and down might resemble the Forex market. But there would ultimately be no growth, just volatility.

      (C) The short-term market in which a category is surging in price. This is where domainers try to make money. It’s why pump-and-dump schemes are tempting. Because under stable market conditions like (A) and (B), making money is harder. Bubbles make it easy.

      In reply to ikehook | February 26th, 2016 at 7:08 pm

      joe

      NNN.ws but more interesting NNN.com I offer premium 4 domain .Com two words and as a seal that is not used for some with answers No Thanks !! Sell well not lose negotiating privately with his friends and get $ 300,000 was all because Elliot say NO Thanks !!! . NNN.com keep buying and selling and ws if you say No Thanks !!

      In reply to Gene | February 27th, 2016 at 5:31 pm

    Kevin M.

    “”So I’d love someone to explain how a ridiculous string like ‘896482.com’ will EVER serve as a website destination address — or serve to build brand value.””

    @Gene – Why does it have to? Business are not the only reason to buy a domain, whatever the strings are. It’s obvious the Chinese are buying a lot of these numerics, and I can imagine that a lot of these types of domains can be, and probably will be, used as email addresses or personal websites, that are easily decipherable and understandable to read and remember worldwide. And with a population of a billion or so people there and more elsewhere, that will need such, seems they’d fit well for such purposes.

    …trees for the forest…

    February 26th, 2016 at 12:59 pm

    @domains

    Most of the big buyouts in various extensions and new gtlds started in Oct/Nov/Dec 2015, so we’ll see by the end of this year (if not sooner) if this new type of domain market holds up, or if it really is a year 2000 style .com bubble that is happening in domains. Maybe it’s something in between, I can’t see it all going back to square one. I doubt we’ll see lists of crappy LLLL.com and NNNNN.com in domain forums for $15 each again, which wasn’t that long ago.

    I can see the argument for both sides, but I don’t think anyone really knows for sure if China and other new domain investors have changed the market for good, or if this is just temporary.

    One thing I’ve always thought is that as short/premium .com domains go up in value, get used for websites, and become unreachable to most, people will have to turn to alternative extensions due to global growth and worldwide expansion of the internet, new businesses, etc. When you throw China into the mix, and India coming on, and other countries, that has to have an impact to domains. If you see .com going up in value in the future, that also has to put pressure on other extensions as well.

    Right now it seems like everything is being bought. Likely at some point there will be a washout, where some extensions get tossed to the side and others are seen as the next best alternatives to .com, and it’s possible .WS could be one of those in some parts of the world. The last year has probably been the most exciting thing to happen in domaining in the past 10 or 15 years, so it’s hard to sit on the sidelines and watch it all go on without participating at some level. The dollar figures and sales numbers don’t lie, in the past year there has probably been more money thrown at domains than ever before. Sitting on the sidelines has been a safe choice, but also a costly one in terms of money that ‘could have’ been made in this surge. So far 2016 has picked up where 2015 has left off, so sideline sitting may still be a costly choice in foregone profits, or maybe it’s a good choice now (no one really knows!).

    February 26th, 2016 at 1:13 pm

    Jonathan

    I know there are brands that are unique, being developed that have the com cachet, are recent, rare unique, short Chinese centric home market brands 八8 & 八88. AI deep learning will not differentiate from aged domains they will mean 88 & 888 why on mortal earth register a NNNNNN that is not brand-able on a WS as an investment ?

    February 26th, 2016 at 1:16 pm

    Kevin

    It’s extremely high risk investing. If the Chinese domain investors shift to another asset platform to protect their currency holdings, there are insufficient numbers of replacement investors behind them to support the current valuations on these bewildering meaningless domains they’ve been using for purposes with zero connection to traditional intrinsic Internet branding value.

    February 26th, 2016 at 2:09 pm

    ikehook

    Any one ever actually look at what domains the Chinese are using? 30% of the top Alexa ranked sites are number letter combos. I think you can safely say that the Chinese have their own “traditional intrinsic internet branding value”

    February 26th, 2016 at 2:18 pm

    michael ehrhardt

    you can not buy ( own ) a domain

    it is always just for rent !

    .com sounds like complicated
    take a look on your keyboard
    find .com
    find .ws
    find .top

    when Chen Mingyu get her first date, nobody will use .com anymore

    update yourself

    February 26th, 2016 at 7:00 pm

    John

    This was a trick blog post. He’s not investing in .ws because it’s gambling, not investing, though he gave away the answer in the fourth paragraph. If there were anything about .ws that suggested “investing” he would be doing it. And now it’s time to play, “the emperor has no clothes.” Look at how the emperor is “investing” today. Lol.

    February 26th, 2016 at 7:27 pm

      Elliot Silver

      LOL… the only gambling I do is playing blackjack on occasion…. maybe even tonight :)

      In reply to John | February 26th, 2016 at 7:34 pm

    John

    That said, three particular .ws domains would be worth it if the “investment” price were right:

    8.ws

    88.ws

    888.ws

    February 26th, 2016 at 7:31 pm

    Jonathan

    Elliot Silver: Be interesting to have a resident Chinese nationals comments to this post, can you reach out to “domaininvesting.com” China blog to post. The reciprocal symmetry is surely two way?

    February 27th, 2016 at 2:56 am

      Elliot Silver

      I don’t have many connections in that area.

      February 27th, 2016 at 8:14 am

    Samit

    I’m with you on this Elliot, I’m not investing in ‘short, chinese premium and numeric’ .ws domains, I don’t get the Chinese market either.

    Numerics are something I steer clear off too, don’t make sense to me either as an advertising / brand pro or as a developer. (I do regret not having registered some 5n.com, but then hindsight is always 20/20.)

    In fact I’m going the other way and selling of my .ws domains, thanks to all the recent talk (hype?) about them I think it might be the best time for me to exit. 😉

    February 27th, 2016 at 4:53 pm

    Daniel Ballard

    Since so many of you guys here refer to “gambling” via “investing” for reasoning their decision for or against .ws: the line drawn here is mostly artificial since investing is essentially gambling but with the odds in your favor.. nothing less, nothing more..

    but indeed this valuation of the odds can be / is still highly subjective (as are the pro’s and con’s listed), therefore some seeing it as an investment, other as pure gambling.. me seeing it as the latter and therefore not touching the remaining .ws…

    February 29th, 2016 at 7:07 am

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