Morning Folks!! 12/21
Tomorrow is my last post to celebrate my 20 years and then I am back off to being retired, silent and enjoying life. Hope to see you for the 25th in 2020.
If you have read my writings over the years you will know that I like to look at both sides of an issue. I can play devil's advocate. I enjoy balancing information and coming to a conclusion. Many close their eyes to new information. They get threatened by it. They have to lash out. Never understood why. Let the weight of what is discovered be the map forward not a meandering way to a dead end. I always adjust accordingly.
I may not be to the leading edge of technology but I have tried to keep up with it throughout my life because I always devised ways to work less and make more. I still have my original 12.5LB Radio Shack Cell Phone from 1981 and my collections of phones is over 100 including 12 iPhones. Cell service was expensive back then, but I devised ways to make it pay for itself and then some. Each new gadget I would buy may have been a bit speculative and some would say wasteful, but I always figured out a way to make whatever it was pay for itself. That way I could justify my purchases and continue to nourish my appetite for cutting edge whatever.
I have watched the evolution of the cell phone from a "Wasteful luxury" to one of the most important necessities in life. I have watched necessities of life reduced to complete insignificance. They still have a place, but their importance has been greatly diminished. Knowing the difference is key. Recognizing which items are candidates for that and which are not. Which have staying power and which will evaporate.
I have been is sales for 50 years. I understand the art and science of sales. I have seen sales through the eyes of 55 different industries. But what you sell is always what determines your level of success. That is where Need, Want and Desire are filters I use to qualify or disqualify any item that I might see. It was how I found success when traveling to Hong Kong and Taiwan and hundreds of trade shows.
What I knew in the years 1995 and 1996 was everything I had done in my life, everything I learned, every success or failure I had, was to prepare me for this domain name journey.
When it comes to the gTLD's, I just don't see the same thing. The demand is being driven by the sellers and domainers and end users are more focused on their .Brand as they should be. THAT is smart and that will keep them in the game no matter what happens. But domainers can't play in that pond. So for me, the top of the pyramid is not even in play.
The USA is .com centric. I don't see that changing to any degree. They will go to any url if it is in their self interest. Content will be what it is all about. Trust may become a big issue.
The reality is that 2 years into this experiment I have yet to see a single commercial on TV in the USA using anything other than .com with only a few exceptions for .org, .net and .tv. I have seen 3 and 4 words .com advertised. I have seen a number of things ending in tv.com advertised. I have seen domains with "dashes" in them .com advertised. I have seen one commercial with a .tv and I would expect more at this point. Sorry, that is directly related to the new gtld's. .TV vs .Horse. You decide which one is going to be used to advertise first and most. Lots of folks still waiting for .tv to take off. But no extension will have great value like .com until you see them used in real and long term advertising campaigns by folks that advertise all day long.
What do I see coming? My last post called the "Rick Schwartz Equation" is still fully intact. Still too early to see any clear winners. But there are several hundred losers and their carcuses are there for all to see. They are much easier to spot. The story really won't unfold until a truly strong new gtld comes along. In my mind .web still has the single best chance to shake things up. I think when .web is released you will see more registrations in their first week than whoever holds the number one spot the week before. That's what I see. And even that won't guarantee a success. But if .web were already out, it is my opinion half of the gTLDs would be on life support if they are not already. .web could become the next .com or the next .net. Either position is stronger than all others imo.
And speaking of the poor orphan .net. The stepbrother to .com. There are more .nets registered than all gTLD's combined. .nets that have a 1% value of their brother .com and 1/1000 the demand. We all have some .nets. So what? I get more inquiries on my .orgs. .Nets have been a piss poor investment. Thankfully they were all hand registered. You should see the arguments I had with folks about .com vs .net back in the day because techies looked down on .com. Does not mean there are not some .nets sold. So what? Who cares? But I would be scooping up .nets and .orgs today before .horse and most of the others. When they go into the boardroom, all the old extensions will be reviewed and .net, .org, .tv, .me, .info, .biz and others will be discussed and carry weight. It means that one may eventually break out as an alternative. Just not sure what happens to all the others. And when push comes to shove, .brand may be the way to go.
Despite what some say, I have welcomed new gtld's in the sense that it brings thousands of domain evangelists out into the public square spreading the word about domain names. There was a time there was only ONE doing that. Now there are thousands. That helps me and you. But that is a different discussion than taking hard earned money and reinvesting in a riskier side of things. Sorry, just not a path that interests me. Some believe that hurts .com and other extensions. Sorry, I don't believe that one either. Awareness is the key and that's what they bring. Whether the gtld flotilla will each fly on their own? Two words come to mind. Massive consolidation.
That said, the number of registrations will not determine value. The consumer and end user will decide their fate and therefore value not domainers selling to each other. Domainers are financially and emotionally invested. That is fine. But when you have that much emotion in something, you might not be open to the information you need. I am sure great collections are being put together. But the question is will those collections increase in value or become irrelevant in time? For every 1 gtld success there may be a minimum of 35- 40 failures the way I calculate. Possibly much more. Sorry, same or worse odds as Roulette. Gambling vs investing. Yes there will be winners and you will hear about them. But the losers will be a much larger group and they will multiply faster and they will be silent.
Then I always hear they are for "Start-ups." Well if I was looking at a startup and arguably the name you choose and your website are among the most important decisions you will make early on, and you chose a non .com at this moment in history, I would question your judgment. I would say you gave up looking too soon. I would say that for less than $1000 you can find a suitable and very good .com name. The headwinds in the way of lost sales will be more than you can afford. So if you can't afford a grand for a .com, you certainly can't afford a new gTLD. So cheap, misguided and lazy is the picture I see; Sorry.
I think the keyword for the future is despite massive expansion is also massive consolidation. Folks that ignore the math will eventually be consumed by the math. But numbers don't have emotion or feelings. They are one of the few absolutes we have. That does not make me likable or charming. It makes me focused on facts and value. And if that pisses off those with skin in the game, they need thicker skin. The main fact of my focus is value, and you always must factor in circumstance and life expectancy. So if something is going to have great value in 85 years that's great! But you will be dead and so will your kids! So it's more important to eat, pay the mortgage now and enjoy each day.
Clearly 3 out of 4 new gtld's are underwater by number of registrations. Of course the number of registrations may have little to do with the actual commercial success of a gtld. It just happens to be one of the only pieces of data we can judge by early on. Number of registrations may not matter to an end user. Then again, it may! I will judge by the total amount of money spent to advertise and promote any single gtld. That includes all Radio, TV, Magazine, Billboards etc.
Let me tell you how I define success...When I see 3 or more different corporations using the same extension to heavily and consistently advertise on TV and billboards etc. and promote their products and the campaigns last more than 90 days. That to me would be how I define a success. .Net is not what I would define as a success. But it has many millions of registrations. More than all the gtlds added together.
A registrar success is not a domain investor success and that has always been my main point. But through the lens of the registry game there are only a few clear winners out of the 400 extensions released so far IMO. And again many of the stronger extensions have yet to hit the market.
Here is a perfect example from just a few weeks ago and it is quite stunning. This headline from thedomains.com says it all when it comes to efficiency:
".XYZ Has More Domain Registrations Than Donuts 183 gTLD’s Combined"
Simply put one company has done better than another at this stage. Numbers don't lie even if they are skewed by people. You just have to factor that in. You can't discount it 100%. 10 extensions control 51% of all gtld registrations. The other 400 share the other half. The top 50 account for 75% leaving the other 350 sharing 25%. That is before we even have the other 1000 extensions.
As I write this the top 10 gTLD's have about 5.5 Million registrations.
When .web comes out, it may suck ALL the oxygen out of the room to the point where we might see mass casualties and huge consolidation. That could be the end of the party for many. I have a multitude of extensions and still waiting for the second coming.
Let me be clear on what I see in gtld land. If you want to point to .xyz as a success, then so be it. If you think .horse is the future. So be it. Everyone is free to believe what they want and invest as they choose. All I can do is share my vantage point and give it some basis. You can choose to ignore or embrace or even employ. No one is pointing a gun to your head. Take it or leave it. If my view threatens your view, that is your problem not mine because I don't care either way.
The current aftermarket, if there is one, is domainer to domainer and speculator to speculator by a huge margin when compared to end users. The demand by the end user is VERY SOFT! With 11 million gTLD's registered that is a minimum of $100-200 Million on the primary market possibly much more with the various premium and pricing schemes. The ratio between the primary market and the aftermarket is growing not shrinking. The aftermarket has yet to develop. Will it? I don't know. There is certainly strong evidence that it is very weak. Until that gap closes, IF that gap closes, is an important tipping point to watch and track. This is just another way to track what direction things are moving. Especially since now we are entering the third year of this.
What I see is based on the countless emails I get to sell me .whatever that would have no value if it were .com. What they are really trying to do is look for a bigger sucker than they are. Unfortunately most are suckers for one main reason. They still don't understand what makes one domain valuable and another domain worthless. Imagine jewelers that could not differentiate between diamonds and glass. Between tin and gold. You would laugh. Well when I get spammed everyday with the crap I see, oh my!!! Truly swampland and quicksand have much more value.
If you want to even be in the game of a gLLD success, I would focus on strong one word domains that are a known phrases and have commercial meaning. I have never posed a list of anyone's domain name that they have tried to sell me. If I did, it would make any professional domainer pee in their pants from laughing so hard. Remember, one domain that means something has more value than 1000 domains that don't.
The one thing I have stressed for years is to know the difference between an asset and a liability. If you don't understand the difference, go learn it, understand it, then apply it. Your nice car may be an asset or it may be a liability. Depends on you. If it is paid off, it is an asset. If it is worth $20,000 and you owe $30,000, it is a liability.
My main point is please don't compare this to the domain rush of 20 years ago. The factors are so much different. The times are different. The world is different. Supply vs demand and Need, want, desire. Sorry, no one can hide from theses truths. Most importantly, the consumer has to embrace them and still holds the ultimate trump card. They will have the final say so. They may be more apt to adapt in areas where cctld's are used than the USA market which is dominated by .com. So region may play a role in this.
Overstock.co is still to this day the only canary in the mine we have seen using a non .com extension in a heavy advertising blitz. They failed miserably. But that was years ago and I am anxious to see the next big splurge by a non .com and see the results. Maybe the Super Bowl will provide us that chance. So if you want to look at a barometer each year and keep score, THAT my friends is the place to do it. The Super Bowl and Times Square Billboards. These are "Ground Zero" for forward thinking advertising. So until those venues are populated with gTLD's on their signs, and they are there long term, we still have a long way to go.
Let me end with this. I have never seen so many negative variables in any business in my life. Does not mean there won't be a HANDFUL of successes. Does not mean they won't be trumpeted loud and by as many as possible. But I would focus on eliminating the hundreds and hundreds of losers, that many want to just ignore, from the few with success. At least ask the question which ones can survive the long term? Ask what happens when a true and dominant extension like .web comes along? Will you have the funds to invest if ones does come along and catch on fire and is embraced?
I wish everyone great success in whatever path you choose. The surprises along the way will be many if you only see blue skies. The key is not being surprised but being prepared as to what will unfold; when and if it will unfold; and also get it right.
Tomorrow is the actual anniversary post I started with and then as I added these elements, realized it would be too long for just a single blog entry.
Have a GREAT Day!
Rick Schwartz
Ian Andrew
Great Post – just Tweeted the link.
So many good insights…
Ian.
Anthony
Why did you spend “$200,000” of YOUR money on flowers.mobi?
Jay
Great Post Rick.
spencer
Great read Rick. Tnx 4 your insights !!!!
Cannot wait for this clusterf#ck to finish so we can get on with the real show that has now been delayed 3 years.
Grrrrrrrrrrr
Krishna
Wonderful post from Rick. I still can not able to understand why Rick is glorifying .web as if it is descending from heaven. It is just another crap.
spencer
I hears ya. .web on its face looks like .net,…a poor substitute for the real thing [.com]
that said, there is a lot of stored energy in .web that can be seen below the surface if you look (its even often used in Movies).
we shall see :)
Krishna
For me .web is worse than .net. Even a giant like Rick seems to have infatuations with some crap new gTLD.
When legends say something, we should listen and observe as I did the same when Frank Schilling glorified these crap.
thetechpros
I went looking for dead.horse, of coarse…Thanks for your efforts and insight over the years Mr 1800
Lifa
A great read as always. What came to my mind is, isn’t perception the driver of it all? Or is advertising the beginning and end of it when you look into the value of an extension? .com still crushes them all but it possible can’t be top forever or can it? What makes .web an exception from the rest?
spencer
Behavior Behavior Behavior is the driver of it all, Lifa.
Bill Hartzer
Certainly you bring up many great points when it comes to the gTLDs. It’s refreshing to read your honest opinion. Can’t wait for .web to go GA.
DonMurray
I can’t afford to invest in new gtld’s but I can afford a good .com:)
If readers or new or old domainers have not read 12 EASY steps in 36 months you probably should.
I believe more $$ will be made in domains in the next 36 months than in the past 20 years of domaining. China is going to push values so high that you average domain investor will be priced out along with everyone else. Don Murray:)
Josh
Rick’s post in a nutshell: “Don’t let greed get in the way of common sense” [and numbers].
Chris Campbell
The idea Rick brought up regarding massive consolidation caught my eye. There is no sustainability for many of these extensions if they don’t each achieve a supportable level of registrants. I wonder which gTLD will be the first to falter and have to be rescued? Thanks Rick…
Joseph Peterson
Some very good points raised.
Bill
Best point made from this post: “Content will be what it is all about.”.
Domain alone really doesn’t matter, especially if it’s a new gTLD… it’s all about the content. You have to have content and develop that domain if you’re going to get any value out of it.
Isn’t that what the SEOs have been preaching for years now? Content is king?!?
Frank Schilling
I read half of this post.. The biggest thing that struck me was how long it is. “Thou doth protest too much” my brother. : ) we are just 2 years into this experiment and there are 6mm not-com names registered. By year 5 there will be more than 50mm.. by year 10 there will be more not-com names registered than .coms and most importantly, by year 20 there will be more not-com names “in use” than .coms in use. Those are my predictions. If they are wrong it’s only because the milestones will fall sooner.
People lose money in .com names too.. In speculation you risk and sometimes you lose. What you can’t do in .com is mine a space for good names anymore. You also can’t follow promotion cycles like in .XYZ, .CLUB, .LINK and .CLICK that let you take a punt on $1 or $2 first year registrations. There are people who have bought 1000 names for $2000 and instantly found one winner or two that they can flip for $2000 getting the others free. That is not possible in .COM.
What you need to have with any extension is the ability to hold and renew. And you need a product that’s strong enough that you could cold-call a buyer and convince them to take a risk to buy. That is easier in new names than in .COM as well.
These are immense changes happening around us. But like watching the clouds move, they seem to be standing still unless you watch them in time lapse. Even if Google wins .web and markets the hell out of it, therer will be no single string bigger than .com, but all the other New G’s taken together WILL become bigger than .com.
That’s important because there is no going back in 10 years to get the good ones. They are there now and they will all be gone in 5-7 years.
You’d have to be retired and protecting a valuable portfolio names you had the foresight to buy 20 years ago to completely ignore and vehemently oppose the growing tidal wave of new stuff so vociferously.
.COM is New York in 1901, and by 1980 there are going to be great cities in LA, Dallas, Denver and Seattle (where there are only cow towns today). You can stay in New York and make a buck or two, or you could go out West. There is risk in both places.
I do agree that there is much greater “liquidity” in .com names today and that new names are still viewed as highly speculative, but these are the days for getting and shelving the new stuff. You sell later as the available inventory thins.
In short, this is exactly like the gold rush of 20 years ago, There are different miners this time and different shovel salesman but it’s “exactly” the same.. Same risks too. This time will be bigger and there will be more registrants holding more names in the end, which is perversely good for .com. .COM may actually shrink as it goes up in price in a few years time (it could go up by a lot).
Lastly .net was always flawed because it had no marketing and was originally launched for “networks” and “networking companies” that stigma tainted it for the first 7 years of its existence and carries on a bit today.
I expect consolidation too in the coming years, but new names taken together will continue to outgrow any existing extensions on a percentage basis.
Joseph Peterson
This stretches the imagination so thin that it beggars belief. You say:
“In short, this is exactly like the gold rush of 20 years ago.”
1996: A world full of major brands and companies yet to get online. Very few TLDs on the menu. A single suffix can dominate attention.
2016: Everybody has had 30+ years by now to get online. Just a slender sliver of rebrands and startups. Hundreds of unfamiliar TLDs are on the menu, all competing against one another. No single TLD can dominate … unless it’s .COM.
To me, these 2 situations seem drastically different. Maybe I’m just stupid, though. Please explain to me how they’re really identical.
John
I tend to be “pathologically” honest and have both .com and a lot of domains in a handful of new gTLDs I considered to be of quality with potential.
My perspective is that I am primarily an end user and publisher, and only secondarily someone who also likes to sometimes sell domains. Since I started in 2001 as a “domainer” however, I’m always very interested in domains and have obviously posted in the blogs a lot.
Most of my domains are crap in terms of sales and liquidity if that were my main goal, or just above crap, though I do have some really good ones. Even my crappy domains are useful to end users, however, but certainly not worth renewal every year now. I registered too much and have let a lot go – culling the flock. But I still have hundreds and hundreds. Some I have also bought as an end user also with an eye for a possible sale later on, it can go either way with me, mostly getting great deals especially in the aftermarket.
I also have experience publishing under multiple new gTLDs now.
After reading all of Rick’s post and Frank’s post, and while I partly hate to be choosing since I like this Frank Schilling fellow, I will say that Rick’s argument is more compelling and I would also say even more balanced. You have to read his whole post, however. And I would say that Rick “doth *not* protest too much,” but Frank is actually “trying too hard” with his argument and projections.
In each case where I am publishing under a new gTLD, by the way, I have decided that I will very likely switch to .com. The only reason I haven’t started yet is time and motivation now, otherwise I already would have.
In Rick’s really “balanced” post by the way, he certainly does acknowledge the likelihood of *some* successes with the new gTLDs.
I stated above that I tend to be “pathologically honest.” When .US was being released in 2002, one of the things that delayed me getting in on the pre-release action was that in my pathological honest I could sense that by and large practically nobody in the country even cared or knew about it, despite at that time there was even something about it for a long time on the home page of Go Daddy prior to the imminent release. Sure, some “domainers” and one or a few public interest org’s cared, but not the country in the big picture sense. And I was right. By now some may have even seen me rant a bit about Neustar in the blogs because of this reality being the case and status quo to this day, including recently at DNW.
I mention that about .US now because in my “pathological honesty” I have also thought about .web from time to time. I even remember something Frank said about it during a speech a long time ago I happened to hear, in which he mentioned how it was mentioned in a movie. Here are my pathologically honest thoughts, and I too tend to have a track record of being right: .web is weak, it’s time is past, and it’s no “second coming.” The term itself is a bit passe even though still in common use, but people are not going to care that much about it. It may still do okay, but definitely no new .com. Possibly not even a new .net. All the hype and hope and expectation about .web in my opinion is likely to fizzle out to a lackluster reality.
Regarding the new gTLDs, by the way, one that appears to be a bit overlooked I will mention here. With all this talk about “gold” when talking about domain names and TLDs in general, certainly a very fitting analogy I might add, I would commend .gold as being one of the best ones with that really pleasant kind of cool factor that makes it very desirable, at least to an end user. In my opinion, that is one of the gems among the multitude of detritus, though some may not even be thinking about it. I did notice that Mike Berkens snapped at least one .gold up during EAP that would normally have cost $3,000, however. I imagine .gold has hardly any registrations now, though (I haven’t looked lately), which would also be an unfortunate function of the very high pricing for basic registration. I think that too is one of the main problems for the new gTLDs in general – the mostly higher than normal pricing.
Jose Sabater
Thanks Rick.
The memory of silence is a little with what you give us for as long as I know little read and only in photos and videos, distances are often bleary but you always have to have answered my questions have been consistent.
Look at both sides
will be sad in our
which little retreat
or much arrived.
Not being for many,
Like his, not contempt
to others, get out of here
go once, behave friend
we’ll meet again.
Talk and drink tap water
where out keywords,
then sitting on a chair
you drew a line with your staff.
No word passes my friend
It has a law sincerity
therefore always game
as one who taught me
You tell me, sorry
I do not listen, they told me
that the domain king lives here.
It is not like this! warn that not
The pigeon shit
produce elsewhere,
where is it ? with silence.
there you’ll find it ..
Written by Jose Sabater (Live in Spain – EU) to you: Joesaba@gmail.com
Thank you that life will teach us of his journey that began 20 years ago.
Merry Christmas forever, and every New Year be better.
Mary Shaver
Why dot web over dot net?
I fail to see why an already established and fairly well used extension .net is so inferior to the new .web.
I own the .com and .net of the exact same keyword phrase, the .net received around 10% of the direct navigation of the .com version.
Even this month the .net is averaging 8-9% of the .com
You can still buy a .net for around 5-10% of the value of a .com and make money actually running a small site utilizing the direct navigation traffic.
So why gamble on a new gTLD?
I think the old legacy domain extensions like .net will increase substantially if the new gTLDs experiment fails.
Mary
Juan
Thank you, Rick. Big thank you. Registry owners like Frank, want to make money off newbies.
Leonard Britt
The promoters of new TLDs need to be very careful of the language they use to do so. Referring to new TLDs as the .COM of twenty years ago – the opportunity of a lifetime just might get your ___ in trouble with the FTC for promoting an internet scam. The reality is most newbies buying new TLDs are more likely to end up losing every dollar they put into domain names than they are to become wealthy from their nTLD investments.
New TLDs are great for the registry operators – just like online casinos which transfer wealth from the players to the operators.
Without end user participation most new TLDs will end up like .mobi or .ME – just another withering TLD which ends up being a big loser for most who buy into the hype. There are too many nTLD launches for more than a small number to succeed – from an investor vantage point. If you cannot sell a .Net in today’s market for more than low $XXX, who is going to pay $XXXX+ for a new TLD?
elevator
Thanks to Ricks, your retirement will surely payoff well.
All I know is that there are already too many nGTLDs in the market right now and we are stll expecting much more to come. Haba! the market is saturated far and far too much, there are lot of confusion and more are still coming.
.com is extremly too popular for any saturated market to bit down. Though there could be a change in one strong extension but definitly not from this confused and saturated market. Too many extensions are onground for what?
Thanks and cheers.
bhans
To be honest i never saw Rick as a domain king, just a lucky guy who got very early into the .com game and made good money. Also a guy who protects his .com portfolio which is logical in these times. His comments / predictions about new gtld’s are already flawed since usage, numbers but also awareness is going up quickly. As for .web, despite i’m a new gtld investor, it’s ugly and why the hell would i add .web if i made already people aware about my online presence.
Lifa
Isn’t getting early in the game the genius of it all? I surely can’t see the luck in that. People generally follow success and if you don’t have the numbers to prove it then not a lot care one bit. Until we see as many ads on tv with these different extensions then there’s no point to argue. Clearly they haven’t gained enough ground. So far the predictions in this blog have been spot on.
DiAngelo
With all due respect, the new extensions are bought by individual speculators, Internet digging dreamers.
Try to see what is behind the new names: just “coming soon in 2000-late”.
The word is hungry and in a war, like Pope Francis said, there is no time for such long term investments.
The greedy an rich end users always will choose the deviated path to their success: YELP.COM, PCKD.COM, LYFT.COM, GETT.COM
When the Investment Funds with their finest money oriented nose in the wind will re-start hunting the domain names, then we’ll talk about money from Internet speculations.
No Gold Rush any more.
Julio Maysonet
Better late than never… I would like to read more.
Thank you for the post.
New gTLD’s Are in Serious MELTDOWN Mode. Breaks below Nov. 2019 Levels and Dwindling! | The Rick Schwartz Domain Name and Traffic Blog: RicksBlog.com - Home of The Domain King®
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