Blogs about the domain industry and the various players and companies within it.

Arrived at NamesCon

Arrived at NamesCon

After around 24 hours of traveling I've finally reached Vegas for NamesCon! If anyone is around then ping me on skype, facebook or here on whizzbangsblog. I'll be the guy trying to stay awake and get into the Pacific time zone.

On the flight over I fine tuned my two presentations on Monetisation (on Sunday and Wednesday) and I must admit that they've really come together nicely with heaps of illustrations, case studies and data on monetisation. I think that anyone attending the sessions will go away with a lot of great information to help them with their portfolio.

Escrow.com

We have a large team from ParkLogic here which is really great but the bad news is that it looks like our banner for the table on Sunday didn't make a flight.....sigh.....just got to love Qantas. We'll be the table that is handing out little miniature koalas that you can clip to your lanyard and then give to your kids when you get home.

So make sure you make a beeline for our table on the Sunday to pick up your koala and get a demonstration of the ParkLogic Next platform. I think that you're going to love it!

I'd better get going for my walk so that both Roselyn and I can enjoy the conference and not sleep through it. See you at NamesCon!

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

 

 

 

1841 Hits

My Predictions For 2016

My Predictions For 2016

At the end of each year I like to reflect on the past twelve months and then try to make some predictions for the coming year. In a nutshell, I believe that 2016 will see an incredible amount of change in the domain industry. Here’s a few predictions for you…

Shanghai Index

The current Chinese powered boom will peak by the end of quarter one as the Shanghai index continues its rebound. Chinese investors that were looking at exiting money will return to the more liquid stock market as a source of investment returns. Those domain speculators that have invested in long strings of numbers will find they are left holding their assets.

Escrow.com

In an effort to curb costs domain investors will seek to outsource their domain management to firms that provide such services. The economies of scale derived by such firms will free investors time to concentrate on other investment opportunities.

Downward pressure on earnings will continue to place stress on large portfolio investors as registrations costs increase. This will mean that there will be greater numbers of more marginal domains dropped. Those investors that have scaled will be looking for an exit through either marketplaces that are acquiring domains (eg. Godaddy) or portfolio owners that have managed to extract additional value from traffic.

Consolidation of the new gTLD registry market will begin in earnest as the unprofitable registries seek an exit to recoup some of their investment. Successful registry owners will be in a buyers’ market where they will be able to pick and choose whom they acquire for often massively discounted rates.

Traffic domains will continue to underpin the wealth of the domain industry. Additional revenue streams will be developed off the back of domain traffic that is much broader than just the advertising. Understanding true “user intent” and what it means will open up significant opportunities for domain owners that have aggregated large traffic portfolios.

The traditional domain brokering business model will change as the small number of good brokers come under increasing demand from a larger and larger pool of sellers. As the laws of supply and demand come to bear, sellers will offer inducements to brokers to attract attention to sell their domains.

Late in the year, inroads into new management tools will assist domain developers in scaling the development business model. This problem has been the Achilles heel of the development industry and has limited much of the growth in this direction….so keep an eye out on this space.

Consolidation of registrars, monetisation providers and registries will continue as founders seek to exit and economies of scale come to bear on business models. Innovating businesses will be snapped up as speed will become an important asset in scaling faster than competitors.

Despite Marissa Mayer’s (photo above) best efforts, Yahoo will continue to languish and Google will continue to consolidate its hold on the domain industry. As Google’s grips tightens its grip, more and more alternative advertising sources will become viable for larger numbers of market verticals.

NamesCon will be hugely successful and run simultaneously as Affiliate Summit West will be an event that introduces new blood into the industry. The Domain Conference in September will continue to grow and Dietmar’s decision to move Domaining Europe to the Netherlands will pay dividends. DomainFest Hong Kong will really expand as a premier domain conference off the back of the growing Indian and Chinese markets.

So that’s a few of my predictions for 2016. It will be interesting to see how many of them come to pass…..I know that a number of them are already moving forward. See you all at NamesCon in early January.

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

Tags:
3984 Hits

Interview with Jackson Elsegood from Escrow.com

Interview with Jackson Elsegood from Escrow.com

It was a privilege to interview Jackson Elsegood, who is now the general manager of Escrow.com. During our time together Jackson shares a few things about himself and some of the exciting things being developed for Escrow.com.

Escrow.com has become a key part of the domain industry ecosystem and if you buy and sell domain names then this interview is not to be missed!

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

2612 Hits

Analysis of .CLUB and the New gTLDs

Analysis of .CLUB and the New gTLDs

With the crossing over the 10 million mark for the total number of new gTLDs registered I thought that it would be worthwhile conducting an analysis of what is happening in this new market. As is typical of any new market, quite a number of new gTLDs are struggling but as registrations increase, time is on the side of those that have the cash to survive.

Escrow.com

The first chart shows the total number of new gTLDs that have been registered month on month since Feb 2014. As can be seen from the graph it’s basically been a linear growth rate until the last month, where it has taken a definite turn upwards. It will be interesting to see if this recent trend will continue moving forward.

new gtld growth in registrations

 

When we look at the growth rate per month chart there has been a rapid downward slide that has stabilised around the 10% per month mark. This is not unexpected as the initial numbers were small and any growth off a small base will be quite large.

 

What is interesting is the fact that the trend line is flattening out to just over 7% growth. According to a recent report the overall global domain growth is around 6.5% so trending down to just over 7% isn’t surprising. Once again, the uptick in Nov is a bit of an aberration so it will be interesting to see if the trend continues.

Now here’s the challenge for the new gTLDs. According to nTLDstats.com (where this data comes from) just over 8 million domains are parked (ie. 77%) or not being used in the “wild”. What this suggests is that the majority of the growth is coming from the domain investor community.

Why is this a problem? For a start, this means that the majority of domains are not being seen by the general public in more traditional forms of advertising. Hopefully this will change as some of the global brands that have their own extension will begin advertising with it.

Secondly, domain investors are after a return based upon the value of the domain sales that they achieve. Given the massive influx of domain supply this value is unlikely to be realised in the near term. This means that there won’t be as much money to reinvest into the new gTLDs from the domain investor community and it’s very likely that over the next couple of years a lot of the domains will be dropped.

Here’s the other issue. Other than November the number of domains registered per month is basically linear BUT the number of extensions available to register has been growing rapidly! This essentially means that there are more and more new gTLDs fighting over the same sized pie. What this suggests is the new gTLDs have been largely unsuccessful in enticing new money into the domain space and are totally reliant upon a finite domain investor pool of investment funds.

Now let’s take a look at .club as they are often regarded as the poster child of what to do right in this space. Since they were launched they have been growing month on month in a roughly linear fashion until July where growth essentially stopped and then resumed at a more modest rate until October and then skyrocketed in November.

.club domain registrations

Given the northern hemisphere summer period a slowdown in growth for July and August should be expected but the rapid surge into October and November is staggering. I would like to claim that the rapid increase was a direct result of readers seeing the .club banner advertisement on my blog but sadly, this is unlikely to be true…..although I cross my fingers.

Percentage growth in .club domains

I actually believe the team at .club have been really smart in laying the ground work to tap into the Chinese domain market. This became particularly focused since the beginning of September when they attended DomainFest Macau. It was clear that they were on a mission to evangelise .club to the Chinese marketplace.

The recent release of a slew of premium domain names into two auctions has created a huge amount of interest in the extension. This has clearly spilled over outside the auction domains into the wider .club inventory and has resulted in a rapid increase in registrations. It’s being smart about how to leverage these publicity events that has made .club a standout in the industry.

Given the recent surge in registrations, a back of the envelope calculation would immediately indicate that .club is a profitable extension. The entire industry should celebrate any extension getting over the line and this will hopefully spur those that are struggling onwards.

I would not be surprised if Colin and the team at .club are casting their eye over a few of these struggling extensions and considering an acquisition or two. With their proven marketing muscle this would almost be a no brainer. It will be interesting to see what happens in the months ahead.

In the meantime, I'm going to be keeping my eye on the industry as I believe there are a lot more acts to this play before the final curtain is raised.

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

3766 Hits

Why Rightside is a Good Long-Term Investment

Why Rightside is a Good Long-Term Investment

In a previous article (click here) I wrote about some of the challenges that I believed that the publicly listed company, Rightside, was facing in the short-term. In particular, I explored the registry business as a reflection of the entire new gTLD space.

Now let’s take a look at the Rightside registry, now from a quarterly targets perspective but from a more long-term point of view. If the business unit can sustain the most recent quarter on quarter growth rate of 26% then in the long-term the registry business will just print money.

Escrow.com

As the following chart shows, a consistent 26% growth rate will mean the registry business will eclipse the registrar business and leave it behind. At the end of 2018 (which is only just over 3 years away) the business will be doing around $50m per quarter.

Rightside Registry

The great part about this is the cost base doesn’t scale with the revenue. Adding additional records to a database isn’t a big problem once the servers and software has been developed. To date, Rightside has been sensibly focused on expanding the distribution channels for its own TLDs and partnering with companies such as Donuts to supply registry services.

If the latest growth rate in ngTLDs is sustainable then the Rightside registry will very quickly become the largest business unit in the company. In my previous article I indicated that Rightside was a great company without any sizzle……although the registry looks exciting there’s still the risk that the growth rate falls off.

If the rate of grown falls back by 50% to 13% then the revenues at the end of Q4 2018 drop dramatically to $11.8m per quarter. Remember that globally the sales of new domains is running at around 6.5%.

I still believe that there is an opportunity for Rightside to purchase a business or develop a complimentary business over the next few years that can augment all of their business units. More importantly, it needs to be one that will get the market excited and interested in playing with the stock for capital value. This will then ease some of the pressure of the management team and allow them to take a longer-term view of the business.

I would remind everyone that I do not own any Rightside shares and that if you are considering to invest in anything that you seek professional advice before doing so.

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

1769 Hits