According to a recent post over at TheDomains.com, Rob Hall of Pool.com made the following statements at the Opening Session of the Dot Next Conference.
“if I was an owner of a large amount of two, three and four word .com’s I would dump them as new gTLD generic terms will be worth more than the .com equivalent in the future.” “If I owned Shoes.com I would probably keep it, but if I owned Greatshoes.com, or GreatShoesforsale.com I would dump them”
Michael Berkens was in attendance and like many of us, he was curious if Hall wanted to elaborate on his statement. His explanation went like this as told by Berkens.
He used the example of “Ottawa Pizza”
Rob thinks that once there is a .Ottawa and a .Pizza the domain names Pizza.Ottawa or Ottawa.Pizza would both be worth substantially more than OttawaPizza.com.
I asked assuming if GreatPizza.com is worth $50K today what would it be worth a few after say a .Pizza is live.
He said there would be an immediate loss of 20K in value and the decline in value would continue but slow.
Finally he asked me to tell him a domain I owned, so I said Stuff.com.
“So would you rather own Stuff.com or .Stuff for $185K?
“If you owned the TLD don’t you think you could sell 10,000 registrations a year at $10 or make $100K a year.”
Maybe you would sell 50,000 registrations a year and now make $500,000 a year and that would be an annuity in perpetuity.
I am the first to admit I am biased, but I am also an intelligent human being that is open to change and future opportunities. I understand that all that is valuable today could easily be worth pennies in the domain world. Things change quickly. Yet I still think this is naive advice. There is no doubt that alternate tlds are going to take a hit. They already have. Dot name, dot cc, and to a point even dot tv all have minimal commercial use. The more possibilities from which an end user has to choose the less value the common domains become. It’s like trying to sell a house in a subdivision with 400 lots left to build on. Nobody is willing to pay a premium because they can just go build a similar house down the road. But dot coms aren’t in that neighborhood. They are down by the beach. All the lots are built on and no more are open. Some are on the beach, some are three blocks away but they are still all taken. Rob Hall is saying you should sell that house in that sold out subdivision because that new house in the unbuilt subdivision will end up being worth more. That would only be true for two reasons.
People perceive that living in the new neighborhood is more prestigious or two, that the new houses have more modern amenities and perks that the old beach houses can’t deliver. Now translate that metaphor to domain names. These new tlds offer nothing but availability. Dot coms are the most known, wanted names in the world and they are basically “sold out”. Buying the new tlds is settling. You only buy them because you can’t afford dot com (or if you’re from another country your corresponding cctld like .de). Hall is saying instead of buying a $185K dot com you could own the entire tld and make more money. He assumes you want to go into the tld business.
In short, if you have junk domains then the brand tlds are going to affect you, but guess what? Your names already had little value it’s just now they’ll have none. I think that Rob Hall is wrong about the two word dot coms losing most of their value with these new introductions. I am so certain that he is wrong I am willing to put my money up against it. In reality I am a one word dot com investor (evidently he thinks these are going to be fine) so it doesn’t apply to me as much but I also continue to invest in two word dot coms. As usual, only time will tell us if Hall is correct or not. Time will most likely reveal if Hall or Pool have a financial interest in the new tlds and used the statement to support these investments.