When Will Your gTLD Investments Be Profitable? | DomainInvesting.com
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When Will Your gTLD Investments Be Profitable?

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My personal and business opinion is that if I were to buy new gTLD domain names, my investment would be long term rather than the short term investments I prefer to make on behalf of my company. I’ve heard mixed opinions from other people who are buying new gTLD domain names, and I want to hear your opinion on when new gTLD domain investments will be profitable.

To clarify this a bit more, I will give you an example of what I mean when I mention profitability. Let’s say you decide to buy 100 .Link domain names from Uniregistry for just under $1,000 ($9.88/each per year). How long will it take for you to sell or monetize via PPC to make a profit? Obviously, if you sell 2 names for $1,000/each in a year, you are in the black, but if you only sell 2 at $500, you’ll be in the red when it comes time to renew in year 2.

There are more variables at play than meets the eye because many people will continue to buy new domain names, adding to the time it will take to break even. That being said, what is your profitability outlook if you are investing in the new domain names?

Please vote in the poll below to express your opinion:



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

    Reminder from Godaddy’s (21% Global market share) IPO filing…
    https://www.sec.gov/Archives/edgar/data/1609711/000119312514230425/d728713ds1.htm

    average revenue per user for the trailing 12 months is just over $100

    Who is going to buy your .whatever that you paid hundreds of dollars for in the early access program plus years of premium renewals when all the typical user wants is a reg fee domain?

    June 10th, 2014 at 11:07 am

    Bye-bye

    I cannot believe when I think back about this blog.
    It used to be a good blog. I am Not surprised people these days say around that you only advertise other services.

    Even giving a stupid example you had to give Frank S. company` extension.

    June 10th, 2014 at 12:06 pm

      Elliot Silver

      I am sorry that you feel the need to make a rude (and pointless) comment like this.

      June 10th, 2014 at 2:12 pm

    Jamie

    Only cheerleaders are the consultants, or the guys backing extensions, they are using all their past goodwill to suck every dollar before this busts out. Gtlds are not as unique as you think… One word .com’s are worth much more than 2000 keywords across . Extensions.

    Keep buying suckers

    June 10th, 2014 at 3:27 pm

      Elliot Silver

      Obviously people who are consulting or financing an extension believe strongly that the new gTLD extensions will be profitable, at least to the registry.

      At the end of the day, we all need to realize the new domain registries are businesses, and their goals may not align with the goals of registrants.

      June 10th, 2014 at 4:03 pm

      Paul McMenamy

      Hi Elliot and warm greetings from Ireland. Completely agree with your points Elliot. Also, unfortunately, your survey does not reflect the sentiment we each have on specific gTLD’s. I did complete it but only in relation to my very strong feelings on .club – I registered two names a few days ago (www.DistanceLearning.club and http://www.SalesLeads.club) and only yesterday I received reasonable offers on each. But I’m holding them for a while longer as I believe this extension will go far if – just like .com – the name makes sense.
      Interestingly, Sedo also makes interesting Buy Now price suggestions on these two names – $8k and $1.5k respectively.
      Keep up the great posts Elliot anb best regards.
      Paul.

      In reply to Elliot Silver | June 11th, 2014 at 3:18 pm

    William

    I think .com investors are blinded by their portfolios. At the end of the day, no one cares about .com .net or .org. When a company registers a domain name, they want the best (memorable, short, descriptive) name they can afford so their customers can connect with them on the internet.

    Most companies cannot buy the best one word .com name for their industry the same way most of them cannot buy the most expensive prime real estate in their city. Instead, they go with two or three (or four) word .com’s the same way most businesses find more affordable space by locating in a less desirable part of the city.

    Now, there is a new development springing up down the road, a new city called gtld.land. For the price of your small one office flat in the middle of thugville.com, you can own a respectable and spacious building in gtld.land. “Oh no, it will never happen” exclaim .com building owners. “No one even knows how to get to the new city”, they say. But guess what? There is this thing called a navi.link and when you follow it, it takes you to new places you have never been before. And once people visit the new city, they are going to remember how to get back there.

    I am betting that the business owners with sites like BestLandscapingServiceSanDiego.com will see Landscaping.club or Landscaping.xyz as an upgrade. Out of the thousands of landscaping companies in the US, do you think it is possible that no one will want one of these names enough to pay a few grand?

    There is room online for more than one premium brand. But even if the new gtld’s never become premium, some names will have value just because of the name, despite the extension.

    I have 200+ names and I’m still buying.

    June 10th, 2014 at 4:25 pm

      Leonard Britt

      It might seem logical that end users would prefer a one-word new TLD over a three-word .COM but in both cases they generally only want to pay reg fee or close to it. So an investor cannot justify paying $500 to acquire a name and a few hundred more in renewals over the next several years and expect to make a fortune on an extension few know even exist. As well, who sells 100% of their domain holdings? Noone so the occasional sale has to cover the entire portfolio one is carrying – not just generate an ROI for that one domain.

      Again, the average Godaddy customer is only generating about $100 annually in revenue and domainers certainly bring that average up.

      In reply to William | June 10th, 2014 at 5:41 pm

      William

      Leonard,

      First, I don’t own the domains I used in the example but I own some better ones in the same industry that I picked up for the reg fee and a standard renewal. I didn’t pay for any premiums.

      Second, what you seem to be saying is that there is one schmuck out there who will plunk down 100k on landscaping.com but not a single warm body who has a few thousand to spend on another extension. I just don’t see it.

      Only time will tell for sure.

      In reply to Leonard Britt | June 10th, 2014 at 5:59 pm

      John

      Well said. Maybe only a very small # of the extensions will have any real appeal, but some of them are bound to be winners to a worthwhile degree, most notably those with “non-alienating” fees comparable to .com.

      In reply to William | June 10th, 2014 at 7:02 pm

      John

      Makes sense to me.

      In reply to William | June 10th, 2014 at 7:05 pm

      Leonard Britt

      Domain investors should not forget that success for an extension (often evaluated based on number of registrations) is not the same as success for domain investors – based on aftermarket sales as a percentage of registrations.

      Average industry turnover is ~1% so if renewals are $10 and you have 100 domains and parking revenue is immaterial you need a $1000 sale to merely cover renewals without even addressing any return on the initial domain acquisition. The only problem is that the average .COM sale at SEDO was only $600. Not good. Now what type of sale do you need when renewals are $25, $50, $100? What happens if the acquisition cost is hundreds of dollars for a premium new TLD? I believe there will be aftermarket sales in the new TLDs but I am not convinced the potential reward is worth the risk of holding a large number of such names.

      In reply to William | June 10th, 2014 at 8:33 pm

      Paul McMenamy

      Nice analogy William – and very true. We need to remember The Flat Earth Society at times as we evaluate progress in domainland. Not all extensions will thrive or even survive but some will and some will do very well.

      In reply to William | June 11th, 2014 at 4:15 pm

    K Domain names

    I think that the returns will come only after the demand kicks in. That will happen when the web presence of these new names begins to effect the other extensions like .com and so on.

    At the moment, people don’t feel threatened by them enough to neglet their prized .com and purchase a .gtld…

    June 10th, 2014 at 10:39 pm

    Josh

    Even I can concede we will see reported trades for profit and end user sells. However for the most part you will see a return in the not so near future to never range.

    Saying that though, it applies to most .com I see as well :)

    June 10th, 2014 at 10:42 pm

    Syd @ Must Have These

    Rick made an excellent post about the gTLD’s and their progress.

    http://www.ricksblog.com/2014/06/gtlds-reach-1million-just-6-months-sound-trumpets/

    I feel only a few exceptions like .app .bar .care and few others is where a considerable amount of end users might register. All the others are a bubble or too less a number considered to be a successful gtld.

    And renew dates are the turning points to see the bubble burst.

    Syd.

    June 11th, 2014 at 12:33 am

    Ron

    The people who say only some extensions will catch on, just don’t get it, this is a new search, and thought process, any popular saying even in the most shallow gtld will have value of it can be applied to an end user product or service.

    .com actually ends the domain, if I want to purchase gold.com, I do not have any similar option in the gtld zone, gold.coins, gold.zone, gold.expert, small generalizations, nothing broad.

    Lots of work needs to be done, end users are not willing to pay premium
    Renewals for the most part overall. I would rather pay more upfront, and have a capped rate, than have uncertainty going forward, along with premium renewals.

    .com is selling to end users, gtlds are still a pipe dream.

    June 11th, 2014 at 2:43 am

    Jonathan

    The spectre of free “G” domains is a sword of Damocles for gtld investments. We pay for the brand or national identity its in our dna, the rest is Walmart & Ebay sucking it up.

    June 11th, 2014 at 3:44 am

    Vinod R

    People may find it hard to get used to it at first, but some words with extensions in the new gtld sequence makes them the perfect match, and that would grow. Some of them are just a waste of time and money but there are gems out there. Its the way how the future of Internet would grow, there is no other option we can grow with the names.

    June 11th, 2014 at 9:12 am

      Elliot Silver

      On the other hand, I’ve found that some of them seem to have the words backwards and make less sense than the words reversed .com.

      June 11th, 2014 at 9:15 am

    Steve

    Business owners are eventually going to go where the customers go. So, the success or failure of the new gtlds will depend completely on what the customers do. Yes, you may have short-term success selling the new gtlds based on speculation.

    Will customers get accustomed to visiting sites that are non- .com or .org? I don’t know, but time will tell.

    My feeling is that most gtlds will fail; about 95% of them. I think only the short memorable extensions like .club will survive and be profitable.

    June 11th, 2014 at 12:42 pm

    CarronDomains

    “The people who say only some extensions will catch on, just don’t get it, this is a new search, and thought process, any popular saying even in the most shallow gtld will have value of it can be applied to an end user product or service.”

    Agree 100% with this comment.

    June 11th, 2014 at 1:05 pm

    Max

    My perspective is that within most .genericword gtlds there exist a small set of commercially desirable destination strings, largely based on a) overall size of market b) usefullness of the string to end users – building direct traffic via mobile divices currently comes down to typeability.

    My 2 cents.

    June 12th, 2014 at 10:24 pm

    And

    The new gTLDs will succeed,i think, and this is one of the reasons why.
    .YAHOO .PHILIPS .GUCCI .NORTON .BUGATTI .JAGUAR .BOSCH and other big brands , are powerful trendsetters. Why would they buy their own gtld brand if not to use them. Maybe not all of them will use them right away, but if just 1 big brand decides to do, then it will create so much positive exposure.
    And if not for that, then because some of the new gtld websites soon will be visible in the serp, and that will create more new gtld awareness and interest. People will se that it is okey to use these new and more aesthetic pleasing domains.

    July 3rd, 2014 at 8:24 pm

    Jond

    Makes sense to me.

    August 12th, 2016 at 4:00 pm

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