Domain Spotlight:

Have New Tlds Turned Domains Into “Baseball Cards” and Led Us to a Game of “Greater Fools”?

A great conversation broke out on The Domains on Friday about the new releases for .TV and the newer TLDs in general.  One post caught my ear more than the others.  It was written by a poster named Domo

to little to late for the extension.
Auction or not… , tv domains will land in domainer’s hands (As it dis in the later release disaster) , domainers which mainly play the “Greater Fool” game where domains become “trading cards ” (.info deja vu)
The strenghtening of c.c’s (country codes) and the advent of new TlD’s will even weaken the extension more…
The problem since day one has been the pricing structure and the uncertainty that provides and not “smart money” likes to invest on that…

The TV is the Tv and the Net is the Net, yes there is some synergy but that’s all , but it has nothing to do with the .tv extension…
That dog didn’t hunt.

I agree with this post in many ways (and disagree in some as well).  There is no doubt that domaining is a game between domainers.  Buying and selling between people that think the domain is worth more than what the original person paid for it.  In ways it certainly is a game of “greater fool” but there is one other major “game” that is similar…….the stock market.  The huge underlying difference is that stocks have a value based on income and profit.  Sure the price can be inflated due to speculation and future income but, in general, it all comes down to numbers.  Domains?  There are very few domains sold on revenue anymore.  They are purchased merely on speculation that someone will be willing to pay more that what you paid for it.

Dot tv is even riskier.   They receive NO type-in revenue, are often mistaken for the, and are tough to develop for anything non video related.  Add in the fact they high renewal rate and you certainly have a “baseball card” type scenario.  In all business,  with risk comes reward and for those who snagged the “cheaper” dot tvs it certainly makes them easier to resell.  Especially the person that got the single letter dot tvs.  As to the “smart money” quote.  Smart money knows when to get in and get out and they certainly got in this week and are looking to flip for easy money.  Smart money always keeps a small percentage of portfolio just for opportunities like this.  A turn and burn.  IMO there are very few smart money players holding large amounts of .tv or weaker tlds in their portfolios. (I’m sure I’m going to get a few disagreements here)

Unfortunately, eventually someone will be left holding the bag as a new tld  is released or a new ccTld gains strength.  The ending to this story is no different that the ending to every story I write, dot com gains strength.

Domain Spotlight:

7 Replies to “Have New Tlds Turned Domains Into “Baseball Cards” and Led Us to a Game of “Greater Fools”?”

  1. Every TLD is essentially a rebirth of the same namespace: same keywords with a different extension at the end. With the exception of .tel that cannot be developed, all TLDs have the potential to be resold as ‘coinage’ (trading cards, in your argument) or as developed web sites irrespective of the TLD. Personally, I do not invest in TLDs that their only source of thunder is some gimmick, e.g. .TV = television.

  2. You .com owners are always drinking each others cool-aid! The extension that is losing strength in foreign countries is not new extensions, but the .com extension, which is seen by many foreigners as a U.S.A. country code.

    There was an aricle about this subject not too long ago; the Swedish country code (.SE) is replacing .com by a wide margin.

    With respect to the .info extension, I hear domainers saying this extension will suffer when new extensions are introduced, this in my opinion is pure speculation. There are more .info’s being registered on a daily basis than .org, .biz, .us and occasionally .net.

    I know what some of you are saying, that this is only because one can register a .info for 79 cents. What you all are not taking into consideration is that these names have an 80% renewal rate at the regular price.

    I had one .com cool-aid drinker tell me that the reason for this 80% renewal rate was because people didn’t want to lose their initial investment; as if one would spend $10.00 to save a 79 cent investment! How dumb does that sound?

    With respect to .TV, I believe that if the country of Tuvulu, which owns the .TV extension, brings the pricing of this extension under control when it regains control of the extension from Verisign in 2012, this will be the ideal extension for television networks online. There will be thousands of television networks on line in the future.

    What do you think of that .com cool aid drinkers?

    1. I agree with you on the country codes. They SHOULD be the tld of choice. It represents local. I think you are on the opposite extreme. If you think dot com is losing value you are sadly mistaken. There is huge potential in ccTLDs but the safety of dot com is unmatched

  3. Diversity is king, not .com. I own some very good .com’s. I own great .info’s and .TV’s. I own prime ccTLDs. While I would love to have all prime .com (or should I say “mint” for you baseball card collectors out there), the domainer to domainer market is largely what feeds the .com prices. To mitigate your risk, diversify. ccTLDs are where end users are moving and they are getting a lot more value for their money (which goes for alternate gTLDs as well like .TV). There’s no reason a smart domain investor can’t devote some of their time and resources to that market. Do you really think the buyer is an idiot?

    Domains and baseball cards are founded on similar principals – limited supply and long term demand which drives speculation, hording and a lot of waste. But baseball cards are illustrative in that this type of market is easily disrupted by oversupply so that even mainstays of the industry (Topps, Donruss and Fleer back in the day) get wiped out when everyone and there brother creates a new set (extension in domainer terms). I think the explosion of extensions could wipe out far more than just .info’s or .tv’s in the short term, but like all markets, they generally have a way of correcting themselves for the better after a major overcorrection.

    So maybe “Diversity outside of domains” would be good advise as well 🙂

  4. I have made money in .tv every year since 2005. You need to find the opportunity in every extension. Verisign has always had the premium pricing system and back in 2004 I regged for non premium a mis pricing by Verisign that name was turned around and sold for a $4200 profit in 05 and brought about investment in a premium which oh by the way did have type in traffic it made $200 a month parking. That name was sold and listed in Dn Journal in 2007 for $25,000.

    Its all about opportunity, and domaining is not a team sport, go out and find your niche and run with it and no that’s all that matters at the end of the day.

    Oh and by the way the “REAL” conversation about .tv was on Namepros .tv sub forum.

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