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How FEW Domain Registrations Needed for a New gTLD Registry to Profit?

NONE due to parking page ad revenue or just a few as a result of "premium domain" prices and registry owned AND operated prime keyword websites

5:53 pm on Dec 5, 2013 (gmt 0)

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WebmasterWorld Administrator webwork is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

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It doesn't take a genius to realize that the smart money - those pursuing registry status and promoting the new gTLDs - are targeting the HIGH PPC and HIGH VOLUME markets.

.Law / .Lawyer / .Attorney
.Loan / .Mortgage
.Host / .Hosting

See the current list of 557 new gTLDs here: [webmasterworld.com ]

The REALLY smart money chased the chance to become the central registry for MULTIPLE gTLDs. Why? Efficiency. Craft one application for registry status then duplicate it. Set up the software to run one registry then clone it. Hire one law firm to draft the various documents, TOS / TUC , etc. and then direct that law firm to "change the names, keep the rest the same". That keeps the upfront cost of applying to be a new registry to a minimum. If applying for the first gTLD owner/operator license cost $500,000. - between ICANN fees, drafting of docs, developing software, etc. - then #2 cost $400K, #8 cost #$325K, . . .

Once you are over the hump of setting up the "working gTLD multiple registry model" how many geniuses or suckers . . call 'em what you will . . might it cost to keep their operation running and profitable?

I think the answer may prove to be "not many".

How? Why?

1. Pssst . . . It's the parking revenue, stupid! IF someone types in Car.Insurance AND no one has yet to pay the King's ransom to "own it" guess what is going to appear "on page"? Yep. You bet. An advertising feed (if at all possible, i.e., not outlawed) Who gets to keep all the PPC revenue from "the curious" typing in Injury.Lawyer or Injury.Law? You betcha. The registry until someone acquires the domain.

2. Non-uniform pricing for "premium domains". Want to acquire Car.Insurance? Get ready to fork over $$$,$$$ A YEAR. Other .insurance domains will fall in price on a sliding scale based upon assumptions of value . . until the market proves otherwise. How many premium domain sales/renewals will need to be registered to carry the year-to-year operating costs of .Lawyer, .Mortgage, .Loan? 5 or 10 or 15 keyword variants. Criminal.Lawyer @ $15- 25,000./year will get the ball rolling.

3. Inertia: Resistance to change and the re-billing dilema. Once someone is convinced to invest $$,$$$ in a "premium gTLD" AND to build THEIR brand upon said "premium domain" what's the odds that said person or company will simply walk away to avoid having to pay annual $$,$$$ renewal fees?

So, is it possible that PPC income from parking revenue, alone, may be enough to keep some of the new players in the game?

What if Google clamps down on providing feeds? Could the new, mega-players - the ones who have applied to run 50+ registries - get directly into the advertisng business by creating and selling their own traffic feeds? (Did Google see this potential coming and is that one reason why Google joined the rush to become a registry?)

What if the registries, insteading of simply parking the domains, set up their own sites pending sales? What's to stop THAT from happening? Probably nothing and, in fact, it might not be a bad idea.

What's to keep the "friends of the registry" from registering premium domains at a serious discount, building sites upon those domains, and then sharing in the PPC/lead income AND the eventual re-sale of the domain / website?

Interesting times ahead. I'm not predicting the success of any / many of the new gTLDs but, in a few cases, I think the smart money had been well . . hedged.
2:10 am on Dec 6, 2013 (gmt 0)

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WebmasterWorld Administrator bill is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

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I heard Matt Cutts on a recent podcast saying that recent Google algo updates were targeted specifically at devaluing parked domain pages in the SERPs. It was a specific example that he used. It seemed to indicate that they would be doing more to devalue such pages in the future.