events It's bad. No worse. It's sad.

[betthelot]

OK imagine you run a domain business and you sell $7.9 million dollars a year worth of domains but it costs you $18 million dollars to operate the business.
What would you do?
Well MMX owners of such names as .work .beer .london .boston decided to pay the CEO $1.1 million and stop outbound sales.
Did you hear that guys, the main stream bloggers will not pick that up THEY STOPPED OUTBOUND SALES OF PREMIUM NAMES.
They had 13 sales people whose only job was selling premium names in 2015 and it didn't work. These sales people could negotiate the price given they own them and had millions to choose from, a big advantage but it was not financially viable; endusers were not interested.
So a $10million operating loss. They are one of the biggest pure play new gTLDs company and they are hurting like many of them. Will be sold for cents on the dollar within 2 years. Their only hope is .vip launches next month in China.
Invested? Strong sell.
Announced today by the CFO reporting 2015 audited accounts to the London Stock Exchange

 

[bluebox]

betthelot - any reason you felt the need to post yet ANOTHER thread bashing new extensions? That's pretty much all you write about.
I agree with you for the most part but I start to wonder what's your agenda? - why the fixation on this particular topic?
Or maybe we should start asking - who do you work for?

 

[Kate]

It's not unusual for new companies to operate at a financial loss in the beginning. They can raise money by giving up parts of their company to private investors in tranches.

Making losses and burning money in the beginning is normal, but what are the long-term prospects. Many strings are dubious assets that are unpopular among end users. If they can't sell enough to be profitable, then they'll have to diversify or change their business model. That means walk away from new extensions and into different ventures.

Believe me, investors are no fools - otherwise they would have no money to invest.

Just because they have money to invest doesn't mean that are so smart and know what they are doing. It's obvious that there are many new players in the industry (registries and their backers) who have little or no experience of the domain industry. Look at their delusional business plans and zany predictions. They have failure written all over them. Did they really expect that after releasing all those silly strings demand would follow ? What kind of market studies have been done to justify the selection of strings (for example .blackfriday or .hiv) ? Were they all drunk at the board meetings ? Perhaps they should have listened more to domainers.

You'd be surprised how long companies can stay in business at an operational loss before they eventually start making a profit and take off.

Godaddy for example :D

 

[bmugford]

I certainly empathize but I still don't like paying huge amounts for a good domain name because the supply has been artificially reduced by people who have six figures to buy up domain names they aren't using for actual websites.

The additional TLDs means I don't have to, which is why I like them. And probably is why domainers tend to not like them.

You have made a great case why new gTLD make a poor investment. People looking for them are generally looking for cheap options, not to pay a premium price.

Brad

 

[mad409]

A $10million operating loss how can it be any worse!!!! ohh $100million loss, yeah I get it... keep optimistic

I know you've been wanting the downfall of a string of new gTLDs but this isn't the case. If you study the company and listen to them they admit they took on to much, where other new gTLDs outsource many operational functions of this type of business.

They are restructuring and correcting their mistakes. The sky isn't falling if that's what you want everyone to think.

 

[bluebox]

Gee guys - just ignore me, I wont be offended

I don't see the reason to ignore you - just state clearly your agenda.
People who defend new extension either invested a lot of money in them or work for registries.
People who post 10+ threads to bash them... ??
If you have good reason - I would love to hear it.
"I don't like them" doesn't sound like a sufficient explanation for such a dedication.

 

[Kate]

They are restructuring and correcting their mistakes. The sky isn't falling if that's what you want everyone to think.

Restructuring by handing out perks for lack of performance ?
It's the whole business model that is fundamentally wrong. If end users aren't interested, there is little you can do. The assets are almost worthless. All corporations go through difficult times at some point, but that doesn't question the validity of their products/services, or the industry they operate in. Here the validity of new extensions is being questioned. Simply put - the registries are in the wrong business.
There is a huge disconnect between supply and demand.

Other registries are in bad shape too. Example: Telnic has lost £25 million since it was founded — and much of that was before .tel even launched. The .mobi registry failed too, and was sold to Affilias.

The registries have adequate funding for the time being, but won't be able to sustain losses forever. Guess what will happen when the investors/shareholders call it quits ?
This is a big mess and the best has yet to come. Stay tuned for more.

 

[mad409]

I'm confused. Can you post a link to what you're talking about?

The OP is making it sound much worse than it is. Here's a couple new links:

http://www.digitallook.com/news/aim-bulletin/minds-machines-swings-to-loss-in-2015--1140279.html

http://www.proactiveinvestors.co.uk...or-new-life-as-pure-play-registry-125297.html

 

[garptrader]

M&M does have $34.7 million in cash and they are taking steps to curb operating expenses so at least for the next year they seem viable. Perhaps they should not be bidding on additional strings (.CPA, .INC, .LLC, .Music, .Casino) if they cannot make money with the portfolio of 30+ TLDs they already have.

I did read M&M was going to focus resources on inbound inquiries rather than outbound. I will admit I have never found outbound marketing to be a particularly effective use of time. Yes there are individuals who regularly sell domains for low $XXX that long-term might garner a $1500+ offer in the name of cash flow. I don't like the idea of spending hours of outbound effort to sell a domain which long-term might sell for $XXXX for $50 in the name of cash flow.

What I would be concerned about though if I held a M&M registry domain would be the risk they will raise prices in the future. The largest share of registrations in any new TLD will occur in the first few days after launch. After that sales will trickle in at a much slower pace. So if the registry is not making money on its existing strings, it will have to either increase revenue (most likely through higher prices as they have already announced they are cutting back on outbound marketing efforts) or cut expenses (as they have done) or both. There have already been discussions about the new TLDs' liberty to raise renewal costs on previously "non-premium" domains that then get designated as premium. I believe there is considerable risk with M&M strings that renewals will increase in the future either across the board or on individual domain names which might currently have low renewals. I have had to drop a lot of .TV domains because those $28-$30 renewals are just too expensive given the infrequent nature of .TV sales (a TLD which has been around for 15+ years and yet new TLD investors believe they will take off over the next two to three years???).

 

[dordomai]

For anyone who is not familiar with the TLD scene, here's the list of extensions....crazy, right?

https://en.wikipedia.org/wiki/List_of_Internet_top-level_domains

The market can't simply support that many extensions. If you increase the supply without increasing demand, the price has to decrease. Most gTLD were never worth much now you have 1000x more. Who is going to buy these?

The nGTLD had this cute idea that if they launched a niche extension, businesses and people from that niche would come and build websites on them. It wasn't a bad idea but IMO they were overly optimistic.

 

[garptrader]

With an Excel spreadsheet you can always make optimistic projections of how rosy the future is going to look. However, are the assumptions made in coming up with those projections realistic?

All new TLD strings are largely dependent on domainers for the initial few years and then a hope that the general public embraces them soon afterwards. Again, .Net is thirty years old and still is not a great extension for domain investors. .TV is fifteen years old and there are numerous examples of end users branding video-oriented sites on the extension - not so great for .TV investors having to pay $30/year for a portfolio of them (even worse for those who got stuck with legacy premiums of $250-$500/year). .Info might be OK for developers but seriously how many .Info sales do you see on DNJ every week? .Info has been around at least a dozen years.

Again, a few years ago there was a plethora of millions and millions of aftermarket domains available for any end user that needed a premium domain and was willing to pay a fair price for it. If they did not have the budget for a one-word .COM, they had choices - .Net, .Info, .TV, .Org, CCTLD, .CO, .ME, .Biz, and of course there were many two-word .aftermarket .COMs available at a much lower price. There was no need for a thousand new extensions.

OK now users have more choice but if most nTLD registrations are investors, how long can that last? Investors can only pay renewals if there are end users buying in the aftermarket. End users still prefer reg fee domains and don't like paying a premium - even though they will spend thousands of dollars on other business expenditures.

We don't need more TLDs - we need more end users willing to pay a premium price for a domain. Without end users willing to pay for aftermarket domains, speculation in domain names is not sustainable.

 

[Domain Galleria]

Domainers should wake up and face reality. I am of the opinion that both domainers and the registries are part of the problems .As long as registries keep hoarding good names in the name of premium and domainers registering junks/leftover thereby making the registries feel that their junks are acceptable to the public, the future remains bleak. I wanted to buy realty.online early this year and netfirms displayed it at $4 plus and godaddy confirm it to be available as well and I added it to my cart but because I wanted to add more domains, I didn't check out and was using the weekend to design the project I was going to use it for. I decided to check out the next Monday but couldn't believe what was happening as price changes with strong message attached that the domain was $7,000 plus and that will be the renewal fee as well. I went to whois.com and tried to check if my eyes were seeing right and same thing happened. That was the day I hated all ngtlds and see them as greedy and exploiters feeding fat on domainers. As long as they continue in their greed, failure is inevitable. Which small business is going to dole out $8000 to buy a domain name?

 

[Kate]

Experience is biased.

Everyone is biased to some degree, but that doesn't explain why new extensions are not more popular. Why don't we see more prominent end users buying them for large-scale projects ? Why is the spam and the abuse more visible than the bona fide developed websites ? Why are new extensions not advertised more often ? Maybe there are obvious or not so obvious reasons ?
I certainly don't think we need hundreds or thousands of generic extensions. Excessive supply vs contained demand = market crash. Economics 101.

I welcome them because as a consumer of domain names they give me options and I like options, options is how fair market competition works.
...
I don't like the prices domainers want for domains I want to use. The new gTLDs give me options that I like that are much more affordable.

That's the whole point of new extensions, that we tend to forget: provide more options to consumers. But they have been left out of the equation it seems, it's all about the profits icann and the registries stand to make by hoarding inventory.
I am for sound competition, what I don't like is the anarchistic landscape that icann created. The root is now littered with non-viable, joke extensions like .blackfriday, .hiv and what else. Many extensions are going to crash and will ultimately be retired. The chaos is not going to benefit consumers. The confusion around premium pricing is also producing bitter surprises and that also doesn't benefit people. We then have the TLD .sucks, whose business model seems to be plain extortion. I don't want to be associated with this kind of stuff.
If you think icann are going to police the registries think again. In fact, they created the mess to justify their existence. Sounds very much like government: identify/create a problem, amplify it, then pretend to regulate it.

I repeat, the way new extensions have been deployed is downright criminal and should be investigated. I am surprised the FTC isn't on it.

To sum up, new extensions already have a bad reputation and are the laughing stock of the Internet. Of course, some extensions are more problematic than others. But I don't want to associate my projects with extensions that suffer from a lack of credibility.

 

[betthelot]

The OP is making it sound much worse than it is. Here's a couple new links:

http://www.digitallook.com/news/aim-bulletin/minds-machines-swings-to-loss-in-2015--1140279.html

http://www.proactiveinvestors.co.uk...or-new-life-as-pure-play-registry-125297.html

A $10million operating loss how can it be any worse!!!! ohh $100million loss, yeah I get it... keep optimistic

 

[vivaldi]

Ok I'm out of your thread but before I go just let me reminisce on a few of them...


New gTLDs, are they about to blow?

WOW Mind+Machines makes huge cost cuts

Day 1 of the implosion N.gTLDs. Stop renewing

Its bad. No worse. Its sad.

What else is someone to do when they can't afford to play the game

 

[Kate]

I think after 50 years i.e. around 2065 AD when the present population of 7.5 billion reaches around 12-15 billion people and I assume out of that around 8-10 billion will be online at that time than all these extensions will be hugely popular because sheer volume of people browsing the Internet.

People don't need domain names to access the Internet, they just need IP addresses. Few people want to own a domain name, unless it's for business.
So the market size right now isn't 7 billion people. It's much smaller than that.

Of course the registries have always overestimated demand. The domainers also make the same mistake of overestimating the demand from end users for aftermarket domains. The industry is smaller than we perceive. The reported sales are testimony to that. Assuming reported sales are the tip of the iceberg (they are) and that the total amount of sales is say, 10 times higher - the percentage of aftermarket-worthy domains is still very low and it is concentrated in mainstream extensions. The share of alt extensions is absolutely marginal.

#lottery
#foolsgold

 

[brandnow]

I'm confused. Can you post a link to what you're talking about?

 

[betthelot]

I know you've been wanting the downfall of a string of new gTLDs but this isn't the case. If you study the company and listen to them they admit they took on to much, where other new gTLDs outsource many operational functions of this type of business.

They are restructuring and correcting their mistakes. The sky isn't falling if that's what you want everyone to think.

Restructuring by dumping their back end system and paying nominet to do it dumping their registrar and paying uniregistry to do it - both will cut into their profit margins less jam. With a projected $5 million costs AFTER the costs savings of outsourcing and with only 300,000 names under management and a third being the give away of .work; they need to be selling 750,000 names a year just to break even and at their current growth rate of only 15,000 names a year that will not happen in my life time. So whats left .VIP to the rescue - they have one last card to play before it comes tumbling down .vip. Small details but the devil is in the small details. Anyway keep reading the propaganda and don't do your own homework recipe for success

 

[mad409]

Oh OK, then outsourcing, allowing them to focus on what they should be doing, selling domains can't bring them back? Whatever.

I've stated my thoughts on this, some may agree and others might not. I do know this is one of many threads you've started pertaining to the failure of new gTLDs, not sure why I wasted my time in this one...

 

[mad409]

something we agree on

Ok I'm out of your thread but before I go just let me reminisce on a few of them...


New gTLDs, are they about to blow?

WOW Mind+Machines makes huge cost cuts

Day 1 of the implosion N.gTLDs. Stop renewing

Its bad. No worse. Its sad.

 

[Webliquids]

i cant understand what you are talking about...

 

[DomainVP]

I think most domainers that kept the pulse on what was going on with gTLD's knew that the eventual end is a bust.

The whole program served two purposes;

1.) Generate income for ICANN via applications for new extensions.
- Literally pulling money from thin air in the multi-millions.
- Expanding profit sources from renewals. Win-Win for ICANN.

2.) Increasing the value of the .COM namespace.
- Don't think for a second that gTLDs were designed to replace .COM. If you thought that, you just weren't following the money.
- Oversaturate the extensions advancing .COM dominance.

Yes, there are valuable gTLD domains, but we all know by now that they are sold off at a premium price. So I can acknowledge that there are some good gTLDs but the majority of them are just poorly marketed crap sold by registries looking to make a buck on the possibility that the world would want these extensions.

There was never a need for them, and it was just a win-win money game for ICANN and every major player with influence that hinges their business on .COM.

 

[Ram G.]

Hookers and blow?

Are you talking about ICANN?

 

[bobbarato]

The 3 Rules of TLD Club:

1. Don't talk smack about ICANN.
2. see rule 1
3. see rule 2

And if your sales staff are costing you more than they bring in, they aren't sales staff, they are cost staff.

If I owned a tld I'd hire a small group of witty social media posters that used very attractive female avatars and listed my tld in their profiles.

 

[Silentptnr]

Seems clear to me. If you don't see demand, or increased demand, likely result is failure. Period

It's simple supply and demand. There is hope, restructuring and all that. But no demand = failure or major losses.