A look back at 2014
In the domain industry 2014 certainly belonged to the new gtlds. The new gtlds were the most talked about area in the domain world, forums, blogs and personal conversations were dominated by opinions, debates and agendas. The industry has never seen anything like this with so many new extensions all vying for the attention of domain investors, companies and the public alike.
A lot of domain investors who said they would never register one, changed their tune in 2014 and purchased a few. There were certainly those that stuck to their guns and remained out of the new gtld pool.
A poll conducted on TheDomains.com showed 78 out of 200 participating readers did not register one.
How Many New gTLDs Have you registered in 2014 ?
- zero (39%, 78 Votes)
- 1-9 (27%, 54 Votes)
- 75 plus (15%, 30 Votes)
- 10-29 (13%, 25 Votes)
- 30-74 (6%, 13 Votes)
There have been many prognosticators who have already given their opinion on the outcome of the new gtld program. I think it is way too early to come to any definite conclusions about anything. This is a long term game, one in which some are going to lose their shirt. One can look at some of the registrations and some of the renewal fees both regular and premium. With little liquidity the average domain investor who jumped in looking to find the second .com Gold Rush, will be forced out under the weight of their own renewal fees.
It will take years to see how the public reacts to the new extensions, will Dress.Sexy look weird to them ? Will they think it is not real and either add .com to the name, or just Google the phrase and wind up on another website ? It does take time and the registries that are well capitalized and patient will be able to see how that plays out in the long run. I know I have spoken to plenty of younger people in the 16 to 25 year old range that don’t think a domain is as important as I do. They use Tumblr, Facebook and Twitter where they can come up with their own unique name. Now as they get older they may see the point of not being enclosed in someone else’s walled garden, that they should want to control their content and image completely.
The aftermarket for new gtlds has been virtually non-existent and that is too be expected so early on in the process. The thing I have tried to figure out is price points, if you own a new gtld that has plenty of similar options sitting there available, how much do you sell for ? Is regging a name for $19.99 and selling for $500 a great deal in the new gtld space, lest you are talking about an incredible word-extension combo ? Plenty of domain investors in .com don’t sell names for $500 to $1,000, they only consider $2,500 and up, that may shift for new gtld investors who own a larger portfolio and have expensive renewal fees.
The novelty effect is another factor, I kind of think of many of the new gtlds like fashion brands, and some are evergreen and some are fly by night. Does everyone who loved Guru, still like it ? Did some like Ninja over Guru or maybe for 2015 the Ninja wants to be seen as an Expert. 2015 and renewals will tell investors, registrars and registries a lot. I know a few people have told me they plan on dropping everything they registered, one person told they felt embarrassed and that they were duped. “Raymond I will never buy anything but .com for the rest of my life, people like frank s. have caused me much financial distress.” Now I don’t know if this person can blame Frank and they did not tell me how much they spent, they only told me they registered 26 domains. So this person may have dropped $500 to $1,000 on the new gtlds and now just wants them gone. How many others will feel the same ?
Companies in the industry getting together was also another theme of 2014, from Neustar buying .co to Igloo buying Aftermarket.com the trend of companies getting together should carry into 2015.
Andew Allemann did a good recap on the 2014 deals which you can read here
I think it makes sense that over time there will only be a couple parking providers, and I can see consolidation coming to the Brandable Boutique space. There are so many small boutiques out there that could benefit by getting together and combining resources for both an advertising and SEO benefit. You need to be in front of potential buyers for these kinds of names.
Some companies in the space are publicly traded and results for 2014 were mixed.
Rightside (NAME) which was spun off from Demand Media in July has not been faring well as a standalone public company. The company finished 2014 at $6.72. The trading range on the stock for 2014 was $6.42 to $17.00.
Web.com (WWWW) the parent company of Register.com and Network Solutions, has a 50% stake in NameJet and 100% ownership of Snapnames which they purchased for $7.4 million. 2014 was not kind to Web.com as the stock was down over 40% for the year. The trading range on the stock was $14.71 to $37.72.
Tucows (TCX) The Company’s services include OpenSRS, Platypus, Hover, YummyNames and Butterscotch. On August 1, 2011, Tucows (Germany) Inc. (Tucows Germany), the Company’s wholly owned subsidiary, acquired 100% interest of EPAG Domainservices GMBH (EPAG). The company also owns Ting.com a mobile phone service provider. 2014 was a good year for Tucows as the stock was up 55.5%. The trading range on the stock was $11.62 to $19.63.
Verisign (VRSN) The company running the .com registry was certainly an interested participant in the new gtld rollout, the company hit its highs before the new gtld names started rolling out in late January, the company was trading at $62.96 and found its way down to $47 come April. The stock bounced back throughout the remainder of the year and closed 2014 at $57.00. The stock was off just over 4% for the year. The trading range on the stock was $46.45 to $62.96.
Minds + Machines (MMX London AIM) Minds + Machines is a major participant in the new generic top level domain (“gTLD”) application process and currently has an interest in over two dozen uncontested gTLD applications, including dot London. Minds + Machines has a further interest in more than 40 additional gTLD applications for which there are still competing applicants. They also own their own registrar. The company had a rough 2014 down over 44% for the year. The stock is a penny stock so volatility and high risk go with companies like this. The company traded as high as 17.75p and as low as 6.75p in 2014.
Neustar (NSR) The company that bought the .CO Registry is one of the most shorted stocks on Wall Street. Currently, 22.1 million shares of the company have been sold short, which amount to 41.2% of the company’s entire free float. The company’s short interest has risen gradually over the last year. It was lowest at the start of the year, with a short interest of 8.8 million shares and made a high of 22.4 million shares in June. The stock is down close to 44% in 2014. The trading range on the stock was $23.82 to $50.18.
The new year will bring more extensions and more debate, some of the more highly anticipated new gtlds will be coming to market such as .web and .app. I think overall we will see the majority of domain investors trimming their portfolios and focusing more on quality.
To everyone that was a reader in 2014 thank you for your time and comments. A healthy, happy and prosperous New Year to all of you.