Washington Post On New gTLD’s: Brings The Value of Any One Domain Down to Almost Nothing

A very interesting article in the WashingtonPost.com today basically proclaimed the death of the domain investor with a big assist from Sedo.

The article cites the growing inventory of domain names from new gTLD;’s  saying the parking and type in traffic will be gone and value of any one domain ” down to almost nothing“.

The article was chatting about the new gTLD’s and domain investing which they still refer to as cybersquatting  saying:

“It wouldn’t have been too hard to buy up most of the available addresses, since there are only a couple dozen generic top level domains and a few hundred geographic ones.

“But, starting very soon, that’s going to become almost impossible.”

“Having thousands of potential top level domains available brings the unique value of any one domain name down to almost nothing”

We could register BestSentences.blog, BestSentences.web, BestSentences.home, BestSentences.lol…and on and on.

The coming expansion even destroys the revenue potential of “parking” domains before they’re resold, since fewer people will randomly type in .com addresses.

That means the end of cybersquatting as we know it.

The only domain industry source quoted in the story was Sedo’s Kathy Neilsen who gave less than a ringing endorsement to the resale market for new gTLD;s when she was quoted as saying:

“It’s a huge risk for a speculator,”  If you’re not averse to risk, and they want to invest in property, that’s their right to do that.”

All and all its an interesting read and here is the full story.

However we have seen the Sedo which was reporting weekly transaction in the $1.5 + range have for quite a while gone to the $1.2 or so range sometime surpassed by Afternic.com, especially considering that Sedo includes domain names in its report that they just act as escrow agent.

Comments

  1. says

    well yeah, among the gTLD’s values will be spread so thin. it will be like this for a while i’d imagine… even if you got good names and good discipline against registering crap – you’ll still need luck.

  2. says

    Sedo surely must be thinking about crappy domains with extensions on everything But .com.

    A few of my associates have seen sales between $10k and $30k for 2 and 3 word .com domains.

    As a matter of fact the domain HowYouMakeIt.com which I have for sale is a killer .com domain that I envision soon will be a household name on TV – Online and Mobile.

    I have found that serious domain investors want .Coms period.

  3. SChase says

    Perhaps the content on the site associated with the domain will drive value in the future; certainly things can’t stay the same. Google tends to create deflation everywhere it goes – except in search terms.

  4. says

    RE: Rick Schwartz

    i assume you meant to type understatement.

    probably, but .COM’s certainly arnt going to continue to go up in value as was claimed in the past by speculators.

    or will they?

    how many people think .COM will continue to go up in value with 1,000+ TLD’s out there?

  5. says

    “That means the end of cybersquatting as we know it.”

    Clear evidence how clueless she is, I ready some other of her writings she comes out as a angry unhappy person that doesn’t own her own dot com and didn’t want to pay for it…

    “It immediately occurred to us that if we wanted to execute the Best Sentences idea without paying $30,000 for a URL”

  6. accent says

    Quote: ” how many people think .COM will continue to go up in value with 1,000+ TLD’s out there? ”

    There are nearly 300 TLDs now, most of them two letters. You can get all but the very best keywords in a domain name right now if you don’t mind a off-brand extension.

    There is an infinity of low-interest domain names available. Add another infinity of low interest names and you still get infinity.

  7. says

    ok – but is it low interest because, as domainers say – people dont even know they exist.

    or they do know they exist and just arnt interested? people like to use both of these answers at the same time.

    and what happens this time when domainers are actually running some of the registries and can learn from the mistakes of the past…. just an open ended question that should be pondered before giving knee jerk “we’ve seen it all before” reactions.

  8. accent says

    Quote: “Clear evidence how clueless she is”
    True, but now the Washington Post has printed it, it becomes a kind of reality.

    Probably an example of the junk journalism that is to come. Lots of agendas running around. Interesting times.

  9. bnalponstog says

    “Sedo includes domain names in its report that they just act as escrow agent.” Those are NOT their sales. How do they get away with that?

  10. BrianWick says

    So Interweb asks “how many people think .COM will continue to go up in value with 1,000+ TLD’s out there?”

    ANSWER: I don’t “think” .com’s will continue to increase in value – I “know” reinforced with actual sales to folks that previously had bought and tried to operate a business at .de, .eu, .co, .mobi, .es, .info and other non.com extensions but know in the end they need to make a .com investment.

    “Add another infinity of low interest names and you still get infinity.” – and what that does is expose the fact that there are a “Finite” number of .coms – so the more non.com introduced – the better off generic/intuitive .com are:)

  11. says

    Definition of ‘Flight To Quality’
    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This flight is usually caused by uncertainty in the financial or international markets. However, at other times, this move may be an instance of investors cutting back on the more volatile investments for the conservative ones (i.e. diversifying) without much consideration of the international markets.

    while flipping between CNBC and CNN for about 45 minutes saw roughly 24 Major URLS crossing, whether advertised or part of their own Networks every single one was a DOT COM.
    Madison Ave knows what’s good for them.

    TV will always be the King of media streaming or not, even if the way/apparatus/receiver changes …

  12. accent says

    Quote: “… when domainers are actually running some of the registries and can learn from the mistakes of the past …”

    Sure, some will make money. The issue for .Com owners is how many businesses that would pay $$$$ or more for a good .Com domain will instead get a new gTLD for reg fee. That is a different question.

    Domainers will sweep the registrys clean of the obvious good names long before end users ever see them. Which is increased supply, but not that much of it, imho, and pretty much a one-time increase. Later rounds of gTLDs will have to pick over the leavings of this round, there is not going to be much premium material there.

  13. bnalponstog says

    The TLDs for Grown-Ups (.com, .org, .net and the like) will stand, with still plenty of room for the new WebVille .anything gTLDs for the dress-up games set. The article’s a bunch of hooey.

  14. BrianWick says

    Exactly “Generic” -
    If a writer has no clue about the subject matter – then they are clearly qualified to write about it – because their readers have no clue either. My God Brian Williams has proven that over and over again – and their is nothing wrong with that :)

  15. says

    Worth noting that these new gtld’s will come with big advertising budgets, law of averages says a few will gain traction .music does come to mind as just one example as something that will grab attention …….especially something like ‘free.music’ Kids don’t care where it comes from, regards.

  16. says

    “Having thousands of potential top level domains available brings the unique value of any one domain name down to almost nothing”

    So how does this apply to LL.com , LLL.com , NN.com, NNN.com, NNNN.com , LN.com etc…..

    And Brandables, also domains that do not include a new gtld in them , ie FatButts.com etc…..

    The .Com is not a bubble, it’s a bullet!

    Chow

    Stu

  17. says

    I believe as the economy improves, the .Coms will sell more and the other extensions will sell a lot less in general.

    Saturation of .coms means that they will either stay the same or go up in value because most everyone would buy more from a .com. This I believe will still be the case for a long time to come.

  18. Grim says

    .COM is prime real estate on the Internet. Prime real estate never goes down to “almost nothing”. Not even close. As a couple of others here have mentioned, there are already many other alternatives to .COM one can choose from right now… so why wait and get so excited for an onslaught of even more of them? What makes the new gTLDs so special? For example, why would .WEB be so much more desirable to own than .NET?

    .COM has absolutely nothing to worry about. It has been the leading extension from Day 1. And like any leader in any product category, it’s an extremely difficult task to take that role away from it, no matter how much the latecomers market their product. Anywhere in the world, you can buy prime real estate for millions. You can also buy lower-income housing for much less. Adding thousands or even millions more sub-standard, low-income units doesn’t lessen the value of the much more desirable places to live.

    It’s an incredibly wonderful dream to think that gTLDs will have such a huge impact on every other domain name out there. But it’s just a dream. Mediocrity is as plentiful as aluminum. But most people, given the choice, would prefer gold.

  19. says

    yeah but do people not use the existing gTLD’s because:

    A.) they dont know they exist

    B.) they know they exist and think they’re pathetic.

    i hear these two answers sometimes in the same paragraph from dough mainers.. so whats up?

  20. says

    1) Verisign is going to eventually delay or put the kibosh on the new TLDs. They have the money, power and influence to do so. And all the smaller groups that are already opposed to the new TLDs will leech onto their movement and provide a smaller form of support.

    2) This “journalist” obviously does not understand how the Internet works. Nor does she understand how habits are formed or broken. Look at what MS has had to do to even get BING on the same radar screen as Google. Millions upon millions of advertising dollars. Millions more on design and consumer awareness. Internet users know .COM. They understand .COM. They trust .COM. It is a habit that will be near impossible to break. Yes, certain TLDs will accomplish this through strong word association and a marketing blitz. But most of them, in my opinion, will fail. I doubt people will be so easily swayed do change just because it’s cheaper. It’s all about habits.

    The only folks I hear clamoring for these new TLDs to be released are those with vested interest in them, not the public. I think they are going to be detrimental to the navigation of the net and will undoubtedly create confusion among the users and ultimately more traffic to the .COM versions of whatever TLD they are using because of HABIT.

  21. says

    Here is one reason why .com will always be number one. I bought NewYorkCity.cc in per-registration back in the late ninety’s, the domain dropped about 5 years ago and I got it back a few days later, I don’t know why I bothered. I tried to sell it a few times for $500.00 and no takers. What is NewYorkCity.com worth?

  22. says

    Been reading the discussion about all the new gTLD’s and there are some good points.
    I have well over 500 Domains, Some for my Companies and most as Investments.
    I recently Sold NationalWaterHeater.com for $5,800.00 so I am also in this for the long haul and for the money.
    This is my first Post here, Mostly due to time issues as I own Plumbing, Heating, Cooling, and Construction Companies on Long Beach Island, NJ which is on the Jersey Shore and Ground Zero for Super Storm Sandy and we have been going 20 hours a day, 7 days a week…

    Now, How I see this going is sort of like Real Estate on the Island I am located on.
    The cheap homes will always sell as everyone is looking for a bargain. The best deals are the worst locations in the middle of the block and they always flood. The homes are built as cheaply as possible including press board kitchen cabinets, cheap formica tops, and cheap vinyl windows and siding. Basically, its still a House on the Island, but it’s no frills.

    The Top Homes are always in the best location such as Oceanfront and Bayfront. If you want one of these you are going to Pay and you are going to pay Big. There is only so many Ocean and bayfront homes and lots. They can’t make anymore and whats there is there. The Quality also is a factor and some are built to the hilt with all the best of the best materials and craftsmanship. Some are built on a budget but they are still located in the Best Location.

    There will always be people who will buy a home on the Island just to be, On the Island.
    The demand for the Ocean and Bayfront homes always outweighs the supply as the location is spectacular, your view will never be blocked, and there are very few of them available.

    Sounds just like the Domain Game we are playing here.
    Ill stick to buying quality. I really like the View…
    Big Sam

  23. says

    Speaking from a personal perspective here, folks know I am a big proponent of the new gTLDs, and I have to say that the reporting on the WP seemed a bit ham-fisted and inaccurate about the value of domain names.

    Thinking it through, I had a college professor describe user behavior and habit in a real simple manner with the following saying, “22 days to make a habit, 22 days to break it”.

    That would put many of existing users at 5-15 years of habit in slapping a .com on the end of things. Newer users and younger users will adapt more promptly.

    Let’s take business world change and the pace it happens as an example of how quickly to expect adoption and change. I am not saying that .com gets replaced, rather I am just using this as an example of behavior change.

    Something like the fax machine as means of commerce communication as a parallel… email, digital signatures, and desktop scanners have reduced the amount of use quite a lot. But we still see it (and somewhat expect it) on a business card.

    Out of a stack of business cards you might have from a recent networking event or conference, how many of those cards did not have a Fax number?

    Another thought is, how many of them had an @Twitter or Facebook url? These are new but did not displace anything, really, other than to increase the presence and means of contact.

    The way it appears to me is that the real impact of new gTLDs will be an increase in the valuation of the existing secondary market. Like in the way that the expansion of the suburbs around the city drives up the secondary market values of in-city property.

    Most experts, including myself, believe that the only names impacted adversely in value will be mediocre ‘longtail’ names where there is a nexus with the TLD purpose, and really only after a period of time while people adjust to the changes in navigation.

    The article could have benefited from more in-industry research, but in summary I don’t think it hit the mark in its prediction of the secondary market for existing domains.

  24. rashedx says

    “22 days to make a habit, 22 days to break it”.

    i assume you mean breaking ” bad habit “, Why i need to change the habit of using .com , is it a bad habit ? and change to what ? dot.what . Is there a difference ?

    Rashed

  25. says

    I think a large flood of .whatevers will only enhance the flight to a standard model or a few well-established TLDs. Of course, what do I know? I’m not a reporter.

    Wait! I totally am a reporter; I just became an online media developer as the technology emerged. HA!

    Obviously the issue is too complex for the glad-handing, pandering Washington Post.

    xD

  26. says

    @rashed I clearly did not say “bad habit“, I just said “habit“. Like writing checks at the store vs using debit/credit. I still see my mom reach for a pen and checkbook instinctively. Both methods work for payment.

Join the Discussion