Note to Self: Don’t Take Any Domain Advice From Rob Hall of Pool.com

Aug 24 2011

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.

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Outsmarting the Dumb, Outworking the Smart

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16 comments

  1. Tony

    I’ll go one step further. Three and four letter dotcom’s will also retain their value.

    PersonalDebtConsolidation.com
    NewYorkMortgageLoan(s).com

    I’m not selling those. And will be picking up more if the dummies let them go.

  2. Michael

    I completely agree Tony, I think I’m going to hold on to
    1tbExternalHardDrive.com and 2tbExternalHardDrive.com ; )
    Thanks again, Shane keep up the awesome blogging, loving your recent posts. Hope the tendon is healing okay.
    Let’s make some money on the dummies boys!


    1. Post author
      ShaneCultra

      Thanks Michael,

      Sitting here writing with icepack on my foot. My saying used to be “pain is temporary , pride is forever” But as I get older I’m willing to give up some pride to get rid of this pain.

  3. Poor Uncle

    Maybe one day we just have to type Pizza and it goes to .Pizza website. Is that technically possible? Dot com or dot whatever doesn’t mean anything. It is just like http or www. I’d say don’t put all your eggs in one basket. This sounds like yet another attempt by the big boys attempt to put the little guy out of business. Just my humble opinion.

  4. BigB

    I think the new extensions will go down in flames after being shunned by the brainwashed public. People want and expect dot Com domains. Period. End of story. Move on people. Nothing here to look at.

  5. Kevin Murphy

    Owning a single TLD with 10,000 registrations at $10 a year would be a terrible business model.

    Half of your revenue would go to pay your registry back-end provider, another quarter would be lost to ICANN fees, leaving just $25k to pay your staff and cover your other overheads.

    You’d lose money.

    You’d need to bulk-invest in TLDs to stand a chance at turning a profit.

    Don’t expect many new gTLDs to price themselves at $10 if they’re going for a niche customer base.

  6. Rob Hall

    Hey @Tony. I didn’t say that NewYorkMortgageLoan(s).com would go to zero value, just that it would fall.

    Do you really believe that NewYorkMortgageLoan(s).com will be worth more than

    Mortgages.NYC
    or NYC.Mortgage

    And then the question comes up as to what you think Mortgages.NYC is worth. If it is anywhere close to 185k, my point is you could own EVERYTHING left of the dot of NYC or .Mortgage for 185k.

    You don’t even need to sell domains to others. You could simply take them all for yourself and do what you wanted with them.

    I posted a longer reply on the original website that blogged about this.

    Rob


    1. Post author
      ShaneCultra

      Rob,

      Thank you for the comment. If you weren’t respected they never would have asked you to speak. I agree that many will Lise value but there will also be many that lose their money in the new tlds. The title was a little over the top, I apologize

  7. Michael

    Funny funny Shane and Gnanes, but those two sites have a respectable GAKT EXACT match count (much better than some of the stinky garbage I hear people raving about and trying to sell) and when I’m done developing them, they will be decent money makers for sure, or attract a sale from Iomega, Seagate, WD, Amazon, who knows…. Not to mention, you think these external hard drive thingies are getting popular as time goes on? How about bigger storage ones like 1tb or 2tb? Everyone’s using them as we download and transfer more music and HD movies, etc… and they are only going to become more and more popular as cloud storage keeps shitting the bed. Eh, either way, I think theyre solid (and long) exact product name .com’s. What the hell do I know though besides I’ll be buying Apple on the dip today myself = )


    1. Post author
      ShaneCultra

      Michael,

      Just playing with you because you posted two of your own names. If I really had a problem I wouldn’t have let it stay up. I do appreciate your comments and incite

  8. Alexander Teo

    As things become more complicated and choices too many, simplicity is the winner. Premium .com will grow in value. Hungry buyers with money to invest will want .com as their #1 choice.

  9. Ozie Jackson

    I can’t blieve there are people who can’t see this for what it is. Just a moneygrab by ICANN and its investors. If the general public does not acknowledge and companies don’t use the gTLDs that are already available what makes anyone think the flood of gTLDs coming our way will fare any better?

  10. Adam

    “Do you really believe that NewYorkMortgageLoan(s).com will be worth more than Mortgages.NYC or NYC.Mortgage”

    I don’t think that .com is that great, but I do think the whole new tld space is poised to wreak havoc on consumer confidence online and generally cause an overwhelming amount of confusion. From high up on the ICANN mountain it’s hard to understand the complete chaos this is bound to cause. From that point forward, the more complicated you make the internet and navigating it and for someone to remember an address, the more they’ll turn to the standard or a simpler alternative. Look to a major player to angle for another paradigm shift in navigation while the sharks and remoras feed on the chum of speculators.

    “you could own EVERYTHING left of the dot of NYC or .Mortgage for 185k.”
    Are you suggesting that .nyc is going to be merely 185k ? come on

    “You don’t even need to sell domains to others. You could simply take them all for yourself and do what you wanted with them.” Yes, that sounds like a great way to drop $185k down a hole.

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