Today, all the dumb money is chasing Dot Coms. Yet, that could easily shift and shift quickly, as speculative registrations are generally on a one-year horizon. By "dumb money" I'm not referring to business owners who actually build out their websites, but to speculators hoping for a quick flip on very poorly selected domains.
Registries like Donuts and others need to slash their acquisition and renewal cost. That will change both the conversation and unleash speculation, specifically Donuts, as they hold some of the best Not Dot Com inventory. The owners of the Dot Club registry has already slashed renewal cost to levels of Dot Net domains— and is now ranked in the Top-5 for Non Dot Com registrations— although they are still imposing market price on acquisitions. Good start, guys!
It's mass speculation that plays the dominate role in domain registrations, not those end-user build-outs that get all the press. Overall, it’s estimated that more than 75% of all domains are inactive— but that's misleading because the 25%, the live sites, have accumulated over more than 30 years of Internet growth. Those Dot Coms have permanent homes and are typically renewed automatically. It's the vast majority of the undeveloped domains that are being held for resale or by dreamers with good intentions. For nascent Non Dot Coms, virtually all were bought for resale, as there are few notable build-outs.
“It’s mass speculation that plays the dominate role in domain registrations, not the end-user build-outs that get all the press.”
The Top-5 Non Dot Coms alone represent almost 40%* of all gTLD registrations — and there are over a thousand in play. Of those, three (.top, .xyz, and .club) have holding costs comparable to Dot Com or Dot Net. Only .Loan and .Vip have taken off despite being priced as luxury goods. For some gTlds, the annual cost is so crazy high there are but a few hundred registrations or less. The Donuts registry, where all domains are luxury priced, has only one ranked in the Top-20, the Non Dot Com, .ltd.
* The Top-5 have 8.9 million registrations of 23.2 million Non Dot Coms
While the messaging captures value, it’s the underlying market size and quality that determines value. Clearly, loans have a high perceived value and, presumably, VIPs have high discretionary spending, a moniker known in all languages.
Raising non dot com Stature
What’s lost on these registries is the immense value of word-of-mouth promotion on market growth. Right now, we’ve got professional investors and millions of speculators trashing Non Dot Coms in favor of traditional domains. Combine slashed pricing with the visibility of recent sales, and millions of speculators would begin promoting gTlds— especially the younger ones, betting on the viability of Non Dot Com where Dot Coms have already peaked in value.
“Right now, we have the registries holding prime inventory for themselves and charging high renewals to anyone who dares invest. Professional domain investors remain wisely on the sidelines.”
We’ll never see a perfect storm like the one we had in the late 90’s; the excitement of an Internet roll-out, mass free publicity, and a concurrent price drop that fueled speculation. Like many early investors, my first 1,000 domains cost $100,000— and I sold my Lincoln Park condo in 1998 to pay for them! Yet, within 2-years, the minimum registration at the time, holding costs dropped over 80% and I somehow survived. Yet now, after several years, I’m still waiting for registries to drop Non Dot Com pricing down from the stratosphere.
Today, there is nothing really new and little publicity, so short of the registries spending hundreds of millions in advertising, only professional investors can raise the stature of Non Dot Coms. Right now, we have the registries holding prime inventory for themselves and charging high renewals to anyone who dares invest. The vast majority of professional domain investors remain wisely on the sidelines.
Yet, the pros are not were the real money is. For every savvy professional there are thousands of amateur speculators willing to spend real cash on anything with an upside. These are the same crazed speculators that continue to fuel the crypto Ponzi schemes and enrich Las Vegas casinos.
“The real source of Verisign’s enrichment: Annual renewals on up to 100 million worthless domain registration that will never, ever be sold or built out.”
You can see this for yourself, on any given night. Just look over the available domains at NameJet, where domain professionals compete for inventory. You’ll see bids on only 3 of every 100 available domains. What this illustrates, clearly, is that amateur marketers paid real money to register and hold unsellable Dot Com junk, perhaps, for years. That’s a registry’s dream!
For every 3 Dot Coms of tangible, commercial value, 97 of each 100 registrations were doomed from the start. Even professionals rarely get it right, but it’s the amateur who are the real source of Verisign’s enrichment, annual renewals on up to 100 million worthless domain registration that will never, ever be sold or built out (97% of the 75% inactive Dot Com registrations, numbered at 131.9 million).
That’s what’s at play. Assuming a $10/year registration, that’s almost one billion dollars in annual revenues— $1,000,000,000.00 in crazed speculation— money which will begin to chase Non Dot Coms, once Donuts and the other registries get this right.
do the mall
Think of it like this. Non Dot Coms are like beautiful new malls with obscene rent and very few stores— run by the mall itself— and nobody shops there! The malls have great location, but the owners dream of eliminating the shop owners and doing it all themselves, or charging their store partners such high rent, no entrepreneur in their right mind would move in there. Is it any wonder that Non Dot Coms have barely taken off?
UNLEASH the crazed Amateurs
As with any aspiring mall, there needs to a variety of stores stocked with great inventory to attract shoppers. To unleash the crazed amateurs, Donuts and other registries must first get professional investors on-board by slashing acquisition price and renewals— empowering them, rather than displacing and competing with them. Only then will Non Dot Coms be seriously promoted by domain professionals, those industry veterans who actually talk to and influence real buyers— unlike the registrars, who are just the vending machines for Non Dot Com domains. It’s the stores and personal service that make malls famous, not their locations.
“Combine the push of professionals with the pull of superior messaging, and DotComs may soon be cast as the “old school” domain, like having an @AOL address— as in “Oh, God, where-have-you-been!”
That’s how this really works. Share the love to create the frenzy. For Non Dot Coms to become the domain of choice, professional investors need to make money selling Non Dot Com, not just the registries. That will amplify the promotion effects 100x— because thousands of professionals will begin raving about them. As of January 2018, Donuts had a sales staff of just three professionals, so a 100x promotional increase is hardly an exaggeration!
Once professional investors begin touting Non Dot Com and sharing success stories, that will unleash the millions of amateurs speculators who, like minions, will begin to buy up all the Junk.Domains in lieu of the JunkDomains Dot Coms they're buying now, dreaming of untold riches. You can not beg that kind of publicity, nor spend millions enough to achieve this effect with advertising. This is just like fashion. The masses follow the trendsetters. Donuts and other registries can not do this alone.
“Registrars are just vending machines for Non Dot Com domains, so they rarely influence any real customers.”
Combine the push of professionals with the pull of superior messaging, and Dot Coms may soon be cast as the “old school” domain, like having an @AOL address— as in “Oh, God, where-have-you-been! That's the only way speculative Non Dot Com registrations will rapidly grow to 100 million. Share the love.
going retail
Even for registries that deplore speculation and don't care to tap into this billion dollar renewal market, the principles are the same. Professionals, actual users of Non Dot Coms in this case, are essential to hasten adoption. You need to align with trendsetters to get other professionals to pile on— even pay them to adopt Non Dot Coms.
The goal is just to entice professionals to host their sites on hip, cool Non Dot Coms, rather than own and forward them to their traditional Dot Coms. That’s a safe upgrade, as there’s no need to dump their existing Dot Com or replace email addressing. As you'll see, there's a role for both domain types.
Check out DXC.Com to see this in action. All they've really done is use DXC.Technology as their website address and in their logo. DXC Technology Company— their entity name— now projects hip and cool, but with minimal disruption and no goofy email addressing. Should someone type in dxc.com, c'est la vie; goes right to them!