DomainNameLogic.com: “New gTLD’s Are Pathetic Comapred To Even .Net.Au”

Registrations

 

*UPDATE Michael Gilmour was not the author of the post, and it was DomainNameLogic not ParkLogic. Our apologies to Michael and the actual author.

DomainNameLogic.com just put out a post on their blog, saying that New gTLD’s are Pathetic even compared to a ccTLD, in this case Net.Au.

I understand the point the author is making which is that new gTLD’s are a bad investment from a domain investor point of view and that they would be better off registering .Net.Au domains

“”This post is purely for investors, but mostly for newer investors who quite frankly don’t know what they’re doing.””

“Seasoned investors know better. ”

“They have seen .info and .biz get abused by spammers, .travel and .xxx fall in a heap, .mobi become obsolete, .tel fail altogether, .asia lie desolate and even the promising (privately-owned) .co.nl fail to get off the ground.

Don’t be fooled, ICANN’s latest ‘release’ of more than 1,900 new gTLDs is nothing more than a money-grab, and a very good one at that.

After all, if the business case for these ‘tulips’ was so strong, ICANN itself would be retaining the rights to administer them, not selling them off as fast as it can. (See ‘Myth #3′ in ‘Three myths debunked’ for more).

Anyway, I thought it’d be fun to knock up a little bar-chart* to show just how pathetic these new gTLDs are, and by contrast, why “.net.au” is a much sounder investment.

The chart speaks for itself, but the main thing to remember is that more than 98% of all new gTLDs are have been registered speculatively or by ‘investors’.

By contrast, most “.net.au” registrants are in fact ‘end users’.

Most savvy investors agree that the health of a domain name extension depends greatly on the number of ‘end users’ actually using it. This is because actual use in the real world equals ‘familiarity’ and thus engenders trust, which results in greater click-through rates and hence higher search engine rankings.

Therefore the “.net.au” extension is more than a decade ahead of each and every one of these new gTLDs.

The author goes on to compare .travel to net.au:

“.Travel” has fewer domains registered than “.net.au”, believe it or not.

While much of this may have to do with pricing (“.travel” domains are expensive compared to other extensions), it does highlight the difficulty that each and every one of these new gTLDs will face.

They are plankton in a pond, compared to “.com”.

In Australia, with a popualtion of just over 23 million, “.net.au” by contrast has enjoyed great success with nearly 300,000 domains registered -more than the Top 8 new gTLDs (to date) combined! Moreover, “.net.au” has strict Australian presence requirements, which none of these new gTLDs are subject to.

This, more than anything, should highlight the value of “.net.au” from an investment standpoint.””

Of course in my opinion the author is too concentrated on numbers of registrations which doesn’t matter unless you own the registrar.

What domain investors care about is whether they will be able to sell the domains they register for more than they pay for them.

Using dnpric.es which tracks the historic sales of domain names there have only been 6 .net.au domain names in the history of time that has sold for more than $10,000 and only 10 more that sold for over 5,000 and less than $10K and 13 more sales between $2K- $4,999.

So out of the 350,000 .net.au registrations less than 30 have sold for more than $2,000 and the top price ever paid was $35K

.info on the other hand which the author bashes along with the new gTLD’s  have had 2 six figure sales, 9 domains selling for between $35,000- $99,999, 30 domains selling for $20K – $35K, well you get the idea.

.Info say what you will have a lot higher ceiling that .net.au  just like the new gTLD’s do and a lot more meaningful sales.

We will check back in a year, but I predict we will see resale numbers of new gTLD that will great exceed in just the 1st year what .net.au sold for in all the previous years.

If your going to invest money in a domain why invest in one that has such a limited upside?

Comments

  1. cmac says

    I predict we’ll see a number of reserved domains selling for a good amount but not much action from registrants selling their domains. for whatever reason this is how it seems to go with new tlds. mobi made great money selling their premiums at sedo, xxx has some great sales of their premium domains but reseller market is virtually non-existent.

  2. Joseph Peterson says

    I agree that nTLDs will outperform .NET.AU in the sales charts during 2014 and 2015 — both as a class and probably in several particular extensions.

    There’s plenty of truth in what MIchael Gilmour is saying, though. And I share much of his cynicism. The numbers are far from impressive thus far. But I do expect a number of vanity extensions to catch on with end users in limited but meaningful ways. It’s going to be sporadic.

    “Success” means different things to different people. .NET.AU will probably remain more frequently used and seen than many or even most of the vanity extensions. Obviously, that’s most true in Australia, where .NET.AU will be here and there everywhere for everybody in ways .PLUMBING or .CPA simply can’t be.

    Most of the new extensions are not generic enough to become popular successes in that way. That puts them at a numerical disadvantage, but it’s also what they’re mostly designed for — to be niche-focused.

    Within nearly every niche there are a few top-notch domains that have value for end users. Registries are shooting themselves in the foot by overpricing or reserving their best assets. But they frequently misjudge what’s valuable and accidentally leave domains for domainers or end users to pick up.

    Although I’m somewhat optimistic about end users adopting vanity extensions here and there, I’m not sure about their investment value. And I’m very pessimistic about the effect they’re having on the domain industry — particularly on novice domainers … who are basically paying the salaries of registry employees while getting nothing in return for their horribly misjudged purchases.

    Liquidity in the wholesale domain market is also at an all-time low because funds are being diverted to registries. Domainers buy from each other less than they formerly did.

    • says

      We all agree that most Domainers are aware, and know about the new gTLDs, right?

      Now, there is an extension for Domainers, and that would be dot Domains.

      So, it seems to me that we can calculate adoption for all extension based on that data.
      How many domainers are using dot domains? What ever that percentage is, that is what it will be when the public knows about the new gTLDs abundantly, in each niche.

      • Joseph Peterson says

        If the general public were as prone to buy domains as domainers are, then that would be true for those niches they belong to. However, they aren’t.

        Domainers simply aren’t a representative sample of the general public when it comes to domain registration behavior. So inferences can’t be made from domainer to non-domainer.

        • says

          @Joseph Peterson,

          100% Wrong! So, what are you trying to say to those Registries who spent (are still spending) all that money securing their relative Strings? That they should all have pursued only dot domains because it is the only viable one? Ar you saying that the public doesn’t buy domain names except Domainers? According to TechCrunch, an astonishing 250 million domain names are registered, half being dot Com and dot net. I think the general public owns a lion share of those names.

          If you are right in your assertion, then this entire debate is mute. They lost.

          Besides, if you’re right that Domainers are more prone to buying domain names than the public, and I believe you are right, then you are inadvertently advancing my point, that the group that is a model sample, the domainers, woul produce the best possible results; therefore, the Adoption Results of the other new gTLDs will be “Adoption of dot Domains minus”.

          Domainers are the end users in the dot domains String, just as Tattoo artists are for the dot Tattoo, and so on. Consumer Behavioral Pattern is predictable since we all have one thing in common: human experience.

          The relation of Domainer end user behavior to the public’s is not hierarchical, but declarative. That is to say that it is logical. As I demonstrated in an earlier comment, a set of relations, one per predicate variable. So it’s not complex, abstract, nor object oriented.

        • says

          @Peterson,

          I must remind you that we’re talking ADOPTION of the names, not registrations.

          If 1000 domainers registered 1000 dot domains, but none of the domainers use the names as a primary website, the adoption there will be zero.

          If 500 Tattoo artists registered 500 dot Tattoo names, and 50 Tattoo artists use their names as primary website, the adoption rate there would be .1 (which is greater than zero for the domainers, even tho domainers had more registration. Therefore, the number of registrations is not a direct factor).

          • Joseph Peterson says

            @Domenclature,

            We agree that registration numbers will be relatively small and that usage will be a minor fraction of registrations– both for domainers buying .DOMAINS domains and for others buying something else. All the same, the two groups have fundamentally different motivations.

            Domainers buy domains compulsively and for speculation, including most of their .DOMAINS domains. Non-domainers are generally aiming at either usage or brand protection. Plumbers probably won’t buy .PLUMBING unless they plan to use it. Companies might register piles of useless domains in every new extension under the sun with no intention of development. There’s very little overlap between domainer and non-domainer motivations or registration / development rates.

            So I think my point remains.

  3. says

    Guys lets not forget that with the exception of .club and .photography every extension that had more than 1 application has not launched.

    We can argue if an extension is better if 5 or 10 different companies plunked down the $185K to apply for it.

    But still pointing out other than the two extensions mentioned all others have not launched.

    So .music, .app, .Web and over 100 or more of these are yet to come.

    Also the only Big Geo domain .berlin has launched with NYC, London, Paris, Vegas, .Boston, .Brussels and many more are yet to come

    • says

      @Berkens,

      You in particular know about the new gTLDs, and actually own some pretty ‘fantastic’ ones, so how come you are not using dot domains?

      You have to give a VERY compelling answer to this question, to be credible, Berkens.

      Why not switch to The.Domains now?

  4. Horizon says

    Have to remember to that .net.au is the defacto cctld for Australia,but has been around for quite sometime,so it had a head start of YEARS.On the flip side,as said,a lot of Aussie domains are owned by end users,so are not placed on the market very often for resale purposes….dot com.au is a whole different animal.

  5. says

    I’ve come up with the Formula for all New gTLD Adoption Rate.

    This formula calculates what the Adoption rate would be when the Public becomes knowledgeable and Conversant with each and every new extension.

    This formula is based on Dot Domains, and Domainers as the Control group. All Domainers know about the existence of new gTLDs. There is a specialized extension for Domainers. It’s been out now for months.

    New gTLD Adoption Rate (r), Therefore = Number of Domainers (n) divided by Domainers using dot Domains (d):

    Therefore,

    r = n/d

    • Grim says

      Said the guy who’s obviously never driven a Tesla.

      I agree though, the gTLDs are a waste of time. There are far better places to invest one’s money.

  6. says

    well that settles it – you’re not switching to the.domains therefore i question your gTLD patriotism. its a conspiracy.

    seriously though, domenclature…when you constantly say things like “You have to give a VERY compelling answer to this question, to be credible, Berkens.”

    i mean, i feel like welcoming you to the internet and saying “aww thats adorable.”

    • says

      Go ahead and say it. Dot Domains is for domainers, so its adoption (or NOT) is a crucial data to a group that is in the ‘know’..

      BTW Is ontheinterweb another ego of Berkens? Is that you Berkens using a trouble making ego on your blog?

      • Raymond Hackney says

        Some of the nonsense here is going to stop, you can make whatever “on topic” comments you like but you are not going to make baseless accusations. No ontheinterweb is not Mike, I know who ontheinterweb is, as do some readers by his writing style from other websites. So no there is no relationship whatsoever to Mike or TheDomains.com.

  7. says

    @Berkens,

    Before I forget, you’ve only given an acceptable excuse for not using the.domains, but hardly given a COMPELLING one for not using other Dot Domains available now. If you of all people is not going to adopt the thing, then who? If not now, when? If not dot domains, which?

    You see, it’s compulsory for any domainer pushing dot whatever to adopt and use this extension. Or risk being called names. Imagine how it looks pushing dot whatever without actually using one, it looks REALLY, REALLY bad.

    Anyway, I waiting for a very serious response from you, on why you shouldn’t switch to one of these things now. WHY?

  8. says

    I agree 100% with Michael Gilmour. I have always believed that new gTLDs are just money making machines. Sure, there will be a few sales here and there (especially in the better TLDs like .web) but they will be just flukes. We all know this but of course those that are investing in the new TLDs will never admit it.

    • Grim says

      I’m not sure how .WEB is any better than .NET. But yes, there will likely be some okay sales. And a small handful of great ones. Might as well play the lottery with those odds, though.

        • Grim says

          Yes, I guess that’s true. .CLUB could be okay as well… maybe a couple others… but still, they’re all unproven and second (or even third) rate. So in other words, yes, I’m in complete agreement with both you and Michael Gilmour.

  9. says

    Domen

    Its not an acceptable excuse, the domain is not available.

    Done

    End of story

    the.domains will be available in the next 6 month or so whenever ICANN says so, why should I consider changing thedomains.com to something else completely when the best possible new gTLD will be available shortly .

    Done wasting time with you for the day got to go make some money instead.

    • says

      Since when does ICANN policy stop the Registries from delegating forbidden names?

      You know what Berkens? For a guy that is using 4K TV already, I find it strange that you have to sit at home to chat online. Do you mean to tell me you can’t multi-task, or go mobile? Get yourself an Iphone or a tablet!

      I’ll be waiting, when you come back for the answer.

      • wmx says

        Where did he say he did not have an iPhone or tablet. He said he was done with you. He owes you nothing. If a domain is on a collision list, ICANN is not giving it to Berkens.

        • says

          Are you, therefore, implying that there is only one good name in the entire dot domains string, and on top of that, it’s withheld?

          Then, tell the Registries to stop pushing the stuff until they are ready.

          He owes me explanations if he blogs.

          • says

            @domen
            Mike doesn’t owe you anything just because he blogs, stop being so demanding.
            He had every right not to respond and has every right to ban you from his blog if he wishes.

            I really feel @domen you are very antagonistic.

    • says

      Adoption means USE, not registrations. Actual use of the extension as the primary website, as the domainers would be the end users in the dot domains extension.

      So it’s the inverse of of rate:
      1/r=n/d

      So.

      r=d/n

      rate = 0/7000 = Zero

      Therefore, adoption = Zero

  10. says

    I am on the fence about the new G’s, there is data that is for, and there is data that is against them right now. It is really early to tell, my main area of concern is governance. The end user does not care, for all they know godaddy owns the registries, and they do not know the difference between donuts, and mind and the machines etc.. What is working against the new gtld’s right now are the restrictions, I would think something like The.Domains would be used for this blog, or was reserved in a TM registration period, to have it on hold places barriers of entry, and operation in such an arena. I am sure many generic terms, and 2 letter abb will never see the light of day due to all the blocks. Who are they blocking for, the .com?

    People had rules, and regulations, and unknowns, what is SEO.Expert going to cost in 3 years time if somebody makes a multi million dollar site on it. Will the guys from Donuts do what they have been doing, and cherry picking past sold domain reports which are not verified, and placing premiums on them. So in the future will they be going over financials of companies and placing premiums on them for that same reason as well. I am sorry, but these are big red flags, this is one of the biggest hurdles to get over, and I know nobody will give you a straight answer today. Yes, I know you have a set time period to renew, what happens when expiration lapses, and I have built a million dollar company on a new GTLD, and now you want $100K in annual renewal, there is nothing in your contracts that says you will not do that. That is why the people that know something about the industry will say .com will go up, even at $10, you are sitting pretty.

    • Grim says

      “what is SEO.Expert going to cost in 3 years time if somebody makes a multi million dollar site on it.”

      Since that would be a legitimate business, I expect its worth would be based on the same things that any business’s worth would be based on. In other words, the extension doesn’t matter… only the profits the site takes in. The thing is, how many gTLD investors will be creating ‘million dollar sites’? (Or even thousand dollar sites?) Since it takes both a lot of time, money and hard work to create sites like that, it’s easy to guess that those types of sites will be extremely rare. And if you’re going to spend a lot of money to create a serious business, why not just take one hurdle out of the equation and invest in a good .COM in the first place?

  11. says

    domen, im not mike and i dont even know any of the bigtime domainers personally. its just like you put people “on trial” all the time. its cute but juvenile. like anyone has to answer to you… nobody cares if you have strong opinions. i do it all the time.. its constantly laying out ultimatums that is silly.

    also these exact sciences and theory you always try to lay out are too exact.. like any equation that complicated is actually going to play out in the end, cmon now..

    • says

      @ontheinterweb

      Richard is right. When you deal with math, you deal with mathematical composition, mathematical imposition, mathematical exposition… you deal with numbers, not gossip, or hype. You should embrace that.

      Domainers are smarter this time around, call it blog commentary 2.0? Commentary with substance.

  12. says

    @ontheinterweb

    You need guys like Domenclature who pick things apart, and sort out theories, it is good for the blog, creates traffic, and convo, just what they want. Hence more traffic, and revisits, and updates.

    In this business who cares who knows who, at the end of the day, your big buddy domainer is not going to pay you an end user price for your domain, majority of sales are one off clients for the most part. Yes, there are portfolio, and web designers who may come back for more, but unless you ask, nobody will ever think twice to answer.

    • wmx says

      To the contrary the naivety was on your part. might be that you just don’t know any big boy domainers as you put it. I know they may not buy at end-user price but they may buy a wholesale price when you need to move domains and having those relationships will help you sell those types of names where the average formum user will not have that benefit.

  13. says

    I believe the jury is still out. Many of us are skeptical but we really should hope for the best. I honestly believe that the more we can get users to think about the urls they visit, the more powerful good domains will become. For the new GTLDs to work, we all know they have to be adopted…not just traded. Wake me up when that happens.

  14. says

    This is a really poor representation of performance (or anything really…)

    If you want to see the impact of gTLDs as a cohort vs one ccTLD (which is flawed in-itself) you need to add time to this. Without a doubt the velocity of growth in “some” of the new gTLDs are crushing .Net.Au.

    1. Take for example the first 6 months of operations (registrations) gTLDs vs .Net.Au (out of the gate interest)

    2. Take the last 6 months of .Net.Au vs first .Net.Au (current market snap shot interest)

    Switch up the numbers and you’ll have a better view of whats going on imo.

    MBerkens also rightly points out the upside cap potential. ccTLD / gTLDs are both domains but they are vastly different products. Different investor appeal, different end user appeal, different markets ect… Pretty much they are both domains and that is were their similarity ends.

    All that said, I am a big fan of ccTLDs as well as some of the gTLDs, some of the most exciting ones are yet to be released as well.

      • says

        Karamouzis,

        Countries of the world are different, but we find ways of calculating their various GDP or currency exchange rates, or standard of living….

        A new g TLD can be contrasted with a ccTLD. It’s proper. There is no such thing as better new g TLD. … In the abstract.

        • says

          By way of your example….

          You’d compare the total GDP of the United States in the last 10 years VS the combined total GDP of a random number, of random countries, over the last 6 months – and come to what meaningful conclusion?

          Hopefully that makes it more clear on why the data used and conclusion are of little use/value.

          • says

            I believe I used the word “Contrast” rather than “Compare”.

            Elsewhere, contrast is described as “the state of being strikingly different from something else, typically something in juxtaposition or close association”, as an example is given as follows:
            “the day began cold and blustery, in contrast to almost two weeks of uninterrupted sunshine”. Therefore, one day is squared up against ‘almost two weeks’.

            The confusion can be placed on the title of the piece, which speaks of “Compare”, but in the the article itself, the anonymous author (that’s another error by Berkens here, the article has nothing to do with Michael Gilmour of ParkLogic) talks, and deals with “Contrast”. See the following extensive quote (almost an excerpt) from it:

            “Anyway, I thought it’d be fun to knock up a little bar-chart* to show just how pathetic these new gTLDs appear at present, and by contrast, why “.net.au” is a much sounder investment. The chart speaks for itself, but the main thing to remember is that as much as 98% of all new gTLD domains have been registered speculatively or by ‘investors’. By contrast, most “.net.au” registrants are in fact ‘end users’. Most savvy investors agree that the health of a domain name extension depends greatly on the number of ‘end users’ actually using it. This is because actual use in the real world equals ‘familiarity’ and thus engenders trust, which results in greater click-through rates and hence higher search engine rankings. Therefore the “.net.au” extension is perhaps more than a decade ahead of each and every one of these new gTLDs”.

  15. says

    I have been very critical of the new G’s for a long time…and justifiably so. However, I agree with Bill, “..some of the most exciting ones are yet to be released..” I see a handful of gtld’s on the horizon that i might grab up, but only ones where i have the matching dot com or where it’s very generic.

  16. says

    Point related more to .net.au than the new gTLDs:

    ccTLDs with two-levels are being supplemented with the one-level variant in a growing number of countries. New Zealand introduced “.nz” (said to be a counterplay against “.kiwi”) to reduce existing “.co.nz”; Indonesia is offering a “.id” to reduce “.co.id”; “.uk” was just released to compete with “.co.uk”.

    It stands to reason that Australia would eventually release “.au” alongside the existing “.au.com / .au.net / .au.org”. these two-level ccTLDs are unwieldy.

  17. says

    Collectively as domain investors we may have to do some work to develop an aftermarket for the gTLDs. I know we all would rather just buy them and park them and then flip them for a profit, but that will not be possible until an aftermarket develops for them. If and whenever that happens.

    The number of registrations is not the deciding metric for the success or failure of the gTLDs. End user adoption is. And end user adoption will facilitate the development of an aftermarket. If we start putting up mini-sites we might entice more businesses to start buying and using gTLD names. I wouldn’t plan on making any money off the mini-site, but you may get an offer on the name. Heck with Google, I wouldn’t even worry about their search engine rankings. We just need decent websites on these gTLDs so businesses start buying them and using them and an aftermarket develops.

    I’m developing a blog on a .Tips domain name for Sports Bets and I am having no problem getting followers on Twitter. Google has already indexed the site. I know these gTLDs will work. There just needs to be plenty of websites developed even if they are mini-sites, to show businesses the possibilities of their use. I believe they will catch on and businesses will start buying them in the aftermarket.

    • cmac says

      well domainers are buying but if end users don’t buy from domainers, they won’t continue to buy. like someone said on a forum, for new gtlds, domainers are the end users. at least for now. there is little to no demand from end users for the new gtlds.

      • says

        There’s no demand because nobody asked for them. Endusers were more than happy with the available options they had. OK, .COM is oversaturated, but .NET and .ORG aren’t. And even if you wanted an alternative TLD, you already had a wide selection: .CO, .ME, .BIZ, .INFO, etc.

  18. says

    .NET.AU are mostly bought for brand protection.
    And because they are mainly bought by end users, the number of (re)sales is insignificant.
    Recently, for a short time, they were offered for $1 when you were registering .COM.AU

  19. says

    Hi all,
    I just woke up on Monday morning to this post…..I actually didn’t write it!!!!!
    My blog is whizzbangsblog.com or michaelgilmour.com
    It looks like someone is trying to impersonate me by using the LOGIC part of ParkLogic (my company) and then claiming that it’s me.
    Mike, are you able to please publish something to this end?

    Cheers!

  20. says

    I’ve just received an email from the owner of domainnamelogic.com (he tried to reach out to me on the weekend). He has also reached out to Mike Berkens here to ensure that there is a clarification on who wrote the article.
    So it looks like he’s not an impersonator but there is just a little confusion about who wrote the article.

  21. says

    Should it surprise anyone that a company based in Australia, whose entire business model is based on keeping businesses locked into a few specific domain extensions should author a negative block post against the new domain names?

    Sorry to break the news, but the new TLD’s are here to stay and the premium niche names and corresponding TLD’s will continue to gain traction.

    After all with a business called “DomainNameLogic” you would think they would understand this.

  22. todd says

    TheDomains has thousands of readers that saw this post with its original content. If you did not make a comment then you will have no idea that you edited this post and that Michael Gilmour did not make these comments to begin with. Obviously the only ones that know you edited it are the ones who made a comment and are notified of new comments to this post.

    I think there should be a brand new post stating that he did not write this post to begin with and that it was a mistake. You not only owe it to your readers but you owe it to Michael Gilmour.

  23. says

    Todd

    Already chatted with Michael he is fine but quiet unhappy with the registrant of DomainNameLogic.com who is a fellow aussie who picked a domain that appears to play off of Michael’s brand ParkLogic.com which of course is only in the domain name space.

  24. Louise says

    After this post, I researched MIchael Gilmour to find the article. The only confusion is the original post credited Michael Gilmour.

    Attn: Michael Gilmour: cats are finally getting respect!

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