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

 

[garptrader]

Alice-True the domains that sell do have to pay for the many that don't but many buyers have this mistaken concept that every domain cost the owner $10 and was purchased in the last few weeks so offering $25 should be an adequate return? Most of my portfolio was acquired years ago sometimes in auctions or at least backorders of $69 and in the case of some TLDs like .TV where the renewals are $28-$30 each (times several years) and turnover is only 1%, I will lose money selling for low $XXX. Even then the value of my time has to be compensated. An attorney does not get paid for the paper and ink they use to express a legal opinion. They invested years in an education and professional experience. Those good domains that you really want also cost that domain investor because in the initial years they made a lot of mistakes and had to drop most of their portfolio - perhaps thousands of dollars of training costs. Considering the value of my time (research of search volume and potential end users, administration, auction participation, pricing/renewal decisions, outbound marketing, responding to inbound requests, domain consolidation transfers, etc) I easily have six figures invested in my portfolio. Will I ever see a return on that selling domains at $25 each? No way.

 

[Alice Wonder Miscreations]

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.

 

[Asfas1000]

But I am sick and tired of spending hours looking for domain names for a project just because the good ones on .com are all gone, with a very large chunk of them owned by domainers who haven't used them in years yet want insane prices for them.

What makes you think that if a domain is not owned by a domainer, it would still be available and not taken ? There are million of students, developers, SEO's etc out there who would want cars.com for a fun project.

The market dynamics command that good domains will be taken.

 

[Kate]

That's right, a good name automatically instills more confidence and credibility. People don't always realize that, but they gauge URLs when looking for products/services.
What's your very first impression when you are looking for web hosting and you have a few providers URLs in front of you, before you even check out their respective websites:

hosting.com, 1sclasstwebhost.com, easyhost.net, superhoster.info, superbweb1.com

Which one would you instinctively perceive to be the most professional and trustworthy, just looking at their respective domain names ?

 

[Recons.Com]

I use OVH.com ) Of course, 3L right away conveys reputability. Have also used SoftLayer, which is ok brandable, but chose based on reference (would have skipped based on name) and that was before they were taken over and ruined by IBM.

In short, names matter, end users use them as criteria and not only because they look at it as cool thing, but also that subconscious/conscious experience have taught them that the better the name, the less chance of scam/dishonesty/bad service.

If someone got Furniture.com, he is never going to setup a furniture sale scam website there (get payment, never ship the furniture, move to another domain, repeat).

 

[Recons.Com]

You are missing one point though. For one exposure to scammer on dot com your average consumer sees 100 reliable ones.

For one xyz and other new gtld scammer, most of them see zero non-scammers. And soon they recognize that as one of the signs of something to avoid.

 

[garptrader]

Clearly there are developers (many contracted by businesses to develop a website for them) who do not place much value on the domain name they use. Consequently they refuse to pay more than $50 for a domain name which meant before new TLDs were launched they would quite often be stuck using hyphens, abbreviations, numbers, etc to come up with something for reg fee. New TLDs provide more choices for such low-budget buyers. However, if they weren't willing to pay a premium for a .COM, what makes you think they will pay a premium for a .XYZ?

One thing I noticed at a gym I used to work out at in Miami (before work) - one might think that personal trainers would have many clients who are out of shape, overweight and really in need of coaching to live healthier lifestyles. What I noticed was that most of the trainers' clients were women who were already in great shape and one could argue "Why do they need a personal trainer?".

Those who value fitness are far more likely to pay for services related to their health. Those who do not place much value on fitness (even though a doctor might advise them to change their diet or get more exercise due to high blood pressure, risk of diabetes, etc) are less likely to pay for such services. Those who place no value on domain names are not going to pay a premium for a domain and will migrate to any reg fee option available. Trying to sell inferior-quality domains at premium prices to such individuals is generally not going to work out well (why outbound marketing has such a low conversion rate).

 

[Bram C.]

But the vast majority of spam still has a .com or .net address - .ru is also fairly popular though seems to have decreased recently.

.Com currently has 127 million registrations.
.xyz currently has 2.8 million registrations (2.2% of the amount of .com registrations)

Yet when I check my inbox I get more or less the same amount of spam from .xyz as from .com extensions.
Go figure.

 

[Kate]

Not free but very cheap (< $2). It's one reason why .xyz is popular among spammers. Same problem with .top or .pw, for the same reason.
Cheap pricing is a short-term solution to boost registration volume. Downside: more abuse = bad reputation. A tainted reputation is hard to win back. .biz is still considered a snake oil extension after 15 years. TBH I hardly see any .biz these days, so I can't complain about .biz over spam. On the other hand, I am unhappy about the spam from .xyz domains.

When somebody is looking for the cheapest extension, it's seldom because a high-quality project in the works.

 

[mad409]

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

Not sure that your numbers are correct, if so maybe you should be working for them to help them bail and run for the hills!

Honestly I don't know what their future is but I've seen many companies restructure and bounce back just fine. I do know by outsourcing it will in fact save them money and not take away from their profits as you've suggested. It's cheaper to outsourse than loose money doing it them self, not sure what part of that you don't get. They will in fact save millions by outsourcing and focusing on just selling domains.

Personally I hope they have a turn around, I don't seek out failure like you're doing.

 

[betthelot]

Not sure that your numbers are correct, if so maybe you should be working for them to help them bail and run for the hills!

The numbers are correct they give very detailed financials as they are invested in by some big UK funds. They will save $5million by outsourcing but that still leaves a massive black hole that can only be filled by atleast doubling their reg numbers. Good luck to them - investors are being taken for a ride when the CEO gets $1million on past performance

 

[betthelot]

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

Sorry not making it clearer, I did rush it somewhat. In summary today MMX a major registry of the new gTLTDs posted year end accounts for 2015, showing $10 million loss for the year. When you dig into the figures 2 things struck me 1) they paid their CEO $350,000 and gave a performance bonus of $400,000 together with his last years payment of $350,00 he walked away in January having been paid 1.1millionUSD for 2 years work.
2) They started to employee sales people to do cold calls to prospective endusers, to sell their premium names and they have I think 28 different strings .london .law being their best ones. Upshot was it didnt work so the 13 sales people they employed have stopped getting on the phone or sending emails to endusers soliciting sales. Now they employ less sales staff and only react to incoming inquires basically sit and wait and hope to sell some names at premium prices.

link http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/MMX/12793409.html

 

[Arca]

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

Why do you think .VIP might rescue them? .VIP, short for "DOT 'Very Important Person'" or pronounced as "DOT 'Vee-Ai-Pee'" or "DOT 'Whip'"? I don't see value in this extension. And Chinese words don't really start with a 'V' sound, so I don't see the significance of this extension launching in China as well.

Am I missing something?

 

[Josytal]

endusers were not interested

The bane of most new gTLDs.

 

[Josytal]

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?

Forewarned is forearmed.
He who has ears to hear, let him hear.

 

[stimpi777]

awe - whats in a name anyways.

 

[Rick Ace]

Thanks mad409, for posting the link to DigitalLook. It clarifies many things.

Minds + Machines is making major business decisions and is going through restructuring processes. While these processes puts any company at risk to a loss, Minds + Machines is also trying to cover its losses to look good to investors. Many companies face a year where contracts that helped them rise become a burden on it.

There are many factors at play here. The company is also using its cash reserves to expand. In conclusion, all of these things are business tricks a to expand a company. You can't just extrapolate this information for domaining.

The first set of threads on gTLDs were a nice counterargument. But I'm afraid to say that it seems to be turning into misinformation and petty arguments.

 

[garptrader]

From the release, $6.3 million in 2015 revenue and $12.2 million in operating expenses. With their shift in focus to being a pure play registry they hope to bring "fixed" operating expenses down to $6 million post-restructuring. While premium domain sales might trickle in, there will also likely be many domains which are not renewed. The release mentions 292k domains under management. Many newbies rushed in to new TLDs and it is natural for a large percentage of newbie registrations in year 1 to get dropped over the following two to three years. I would suspect M&M will have a difficult time increasing revenues merely on registrations alone without either adding new strings (which increases administrative costs). The likely scenario is that to boost operating results they will look to increase renewals enough to boost revenue but not so much to accelerate an expected decline in the registration base. That will be a challenging undertaking as domain investors are price sensitive.

So let's take a new TLD investor who holds 100 M&M domains. I checked pricing on several M&M strings and it appears at Godaddy their strings generally run $25-$40 though .London was $59. Wow! I thought $30 .TV renewals were expensive. Anyway, we'll use $32 as an average and say the domainer is currently paying $3200 in renewals. If M&M increases the average renewal to $40 or $50 each, how many domains does the investor renew?

 

[garptrader]

I will also add one other point about renewals which are $25+ - they make profitability challenging for an investor. Industry turn has historically been around 1%. We now have close to 16 million new TLDs probably 90% held by investors yet most DNJ sales reports of new TLDs are registry sales not investor sales. With 1% turn you would expect a much higher number of reported sales so it is likely new TLD turn is well below 1%. With $25-$40 renewals on most M&M strings, you need to sell one domain of your 100 M&M domain portfolio at $4000 (less 20% commission at many marketplaces) to cover renewals. As I said, we aren't seeing a lot of $4000 aftermarket new TLD sales. If the renewals are increased, registrations will drop.

 

[Casey L]

This is one of the most common failures amongst businesses throughout history. They think that making a dozen new extensions will equate to a dozen times revenue, while being obtuse to supply and demand. They think if another registrar sells 100 .coms for $10 each, we only need to sell 1 .hotgarbage for $1000 to be just as successful.

It's not impossible for these new extension companies to be successful but they have to realize the current state of the domain industry first and work with that in mind.

 

[Wannabean]

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.

My guess is verisign agent. I don't particularly agree or disagree with the OP but they do seem determined to make a lot of noise about the shortcomings of ngtld's, whilst ignoring the successes.

 

[dordomai]

.) 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.

In my opinion they were designed to replace .com. At least that what some of the major players hoped when they entered the nGTLD game. They hoped that flooding the market with hundreds or thousands of extensions would make .com disappear.

It didn't work of course. 15 years too late.

 

[DNScholar]

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.

I like social media thing, evolutive thought.

 

[Wannabean]

Please list a few.

Oh come on there's been loads and loads of big sales and you know it.

 

[dordomai]

Oh come on there's been loads and loads of big sales and you know it.

I think he was speaking about extensions not individual domain sales.