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Meet the first new gTLD domainer

Kevin Murphy, February 4, 2014, 15:31:16 (UTC), Domain Sales

Gary Schultheis has bought hundreds of new gTLD domain names already and plans to buy thousands more this year.

Gary SchultheisThe former venture capitalist doesn’t consider himself a domainer, but analysis of Whois records and zone files over the weekend shows he very likely spent more than anyone on Donuts’ seven newly launched gTLDs.

At one point he owned about 10% of the .guru zone.

Schultheis’ new company, ii.org, is betting big — and long-term — on being able to sell from a large a portfolio of new gTLD names, he told DI today.

Right now, his investments are concentrated on .guru, where he says he’s picked up “hundreds” of names already.

DI research shows ii.org spent roughly $30,000 on a couple dozen generic .guru names in a single day last week, including exercise.guru, medical.guru, socialmedia.guru and divorce.guru.

“We’re not from the domain industry,” Schultheis said. “Folks I’m working with are either from the financial industry or the data industry. We’re looking at this from a smart, data-driven, black-box methodology.”

Most recently, Schultheis was president of TLO.com, a company that provided background research and risk management data services. He says that’s informed his strategy with ii.org.

“I like to take vast amounts of data and make decisions based on actual data, rather than speculation and guesses,” he said. “We may buy one-offs based on news-driven events but we try not to act emotionally.”

He’d rather not talk about the specifics of the company’s algorithms, but said they were tested out to create a portfolio of .com names, with mixed results.

Flipping some of these .com names will provide operating revenue, he said, adding that he has access to potentially millions of dollars in funding due to his previous work.

“If we have some .com’s that are industry or location specific, we have enough confidence we can sell those easily for cash flow,” he said.

“Our strategy is not to buy a million dollar domain and try to sell it for two million dollars, we’re going to buy things that will turn quick or have the potential for a massive multiple in future.”

But revenue from new gTLD sales may not come for years, he said.

“We have a five-to-ten year window on these and don’t care if we don’t sell any of these for years,” he said.

With that in mind, part of the risk of investing in “premium” strings with Donuts — which has earmarked many generic words for higher renewal pricing — is the high carrying cost.

“Click traffic is not going cover the renewal costs of these name,” Schultheis said. “gun.guru is going to cost me $400 a year to carry.”

Schultheis said as a venture capitalist in the 1990s he became aware of .com names and started buying up his own. That became International Internet Inc, which was publicly listed in the late 1990s.

Schultheis said the company (from which ii.org gets its name) was worth a billion dollars at one point, though it seems to have gone out of business around the same time as the .com bubble burst.

Now, he reckons new gTLD names will start to acquire Google juice before long.

“We own computer.guru,” he said. “If you type in ‘computer’ into Google now I believe .com’s will outrank it, but I believe over time that with the Google algorithm becoming more specific when you type in ‘computer’ as it relates to an expert it’s possible we could be as strong as .com.”

Of the seven ASCII gTLDS currently on the open market, .guru is the only one ii.org has touched. Schultheis said. In future, he intends to concentrate on where he feels the big-money buyers are.

“We’re very interested in some of the city names,” he said. “But ones like .sexy and .ninja are more for a college-age person, and I don’t feel that the audience there will show the return we’re looking for.”

By contrast .guru speaks to executive types and companies with money to spend, he said.

Without naming names, he said some other gTLDs confuse him.

“With some of these TLDs we really scratch our head and say ‘What were they thinking?'” he said. “There are dozens of these things where I don’t know how they’re going to pay the bills.”

As for ii.org’s outlook, Schultheis said its portfolio is going to be a mix of assets that he thinks could be sold quick and others that are long-term plays.

“We know we’re early. Everyone wishes they could go back to early 90s and buy up all the .coms they could,” he said. “But I also own some .mobi’s so I know you can also be wrong.”

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Comments (21)

  1. Acro says:

    Getting in early comes at a price; I ran into ii.org on several queries. Obviously, he has a large budget as these early registrations are pricey. Let’s see what percentage of the zone files he owns – say – a week after general availability.

    • Tate says:

      .Guru domain names? REALLY??

      C’mon there is no value in those strings.

      The same way they are asking $799 for .luxury – no one will pay that.

      .COM is king and always will be.

      There are premiere one word names in the .COM arena that are not moving right now.

      .Guru is a waste and someone trying to hype it as the next .COM movement.

      Save your money people – no one cares about .Guru or .Cool or any useless new strings.

  2. Ryan says:

    Majority of the good names that are not reserved are about 90 percent gone, the general avail pre reg should take out that other 9 percent.

    There are many gamblers out there, lots of action on 31st on… Hardly cheap at $40 reg fees. This guy doesn’t seem to have any market insight just taking a gamble on the most popular of the first of thousands batch.

    Running zone files his iio came up in a lot of searches on the 31st when it was $1300 plus to register each name. So he needs end users that are going to pay $2000 and up out of the gates.

    I don’t think 3 word gtlds work, they have to be short, and dead in point.

  3. Keith says:

    I like it

  4. Hank says:

    Smart guy wish I had thought of that

  5. Ryan, there are many good, meaningful, single-word SLDs available in our first seven TLDs. Prices for those TLDs revert to regular pricing tomorrow.

    Bob Samuelson, Donuts

  6. Andrew says:

    There are lots of people taking this algorithmic approach to both existing new TLDs and new ones. I think most will wait until the regular pricing kicks in tomorrow, because you’d have to sell these domains for a heck of a lot to cover the early pricing.

  7. If the plan is to register them early and pay the additional fees, then hold them for 5 to 10 years and pay all those renewals the domains will need to be sold in the high four figure range at a minimum (more likely he’ll be asking 5 figures).

    In the end, would someone rather have Divorce.Guru for five figures or DivorceGuru.com for three to four figures (making basic assumptions but it’s the point).

  8. Acro says:

    DivorceGuru.com for three to four figures? That’s quite the gap.

    I agree that premium names have higher renewal fees and anyone investing in them long term and in volume better have a long term strategy and an ample budget.

    • Point being taking a keyword and adding GURU to the end followed by a .com is not a high priced domain in most instances, so 3 to 4 figures. I saw a BIG keyword+guru.com sell for $2k on GoDaddy auctions a few months ago. One where adding “guru” worked well. Who uses the term Divorce Guru anyway?

  9. Not Com Tom says:

    For every domain investor commenting on popular domain blogs that they won’t touch new gtlds, there are likely several that will be. They’re just not eager to come out and say so.

  10. Racer X says:

    .DumbPhuck

  11. Adam says:

    wait just a sec. I thought that all these new extensions were being released so that the market had more choices. . . . and here comes Joe I’m not a domainer scooping them all up. Good luck bro. Nobody was “from the domain space” before they started down the path to losing their shirt.

    btw, what do you think domainers do ? We just pick domains randomly and register domains based on a news story. You have no idea what you’re talking about, which makes me think you’ll be even more of a failure. You think Buydomains, Frank Schilling, HugeDomains, etc just pick names at random ?

    There’s people using this approach in the existing profit centers of com,net and org and even cctlds and killing it. They will continue to do so and there’s still room for peon domainers like me, and all the rest of the domainers you know nothing about, to come in and scoop up good domains.

  12. Don Q. says:

    Q: How do you make a small fortune in the new gtld’s?

    A: Easy. You start with a large fortune.

  13. Enrique Benndorf says:

    These squatters are parasites.

  14. The Winning Bidder says:

    Attention: You may want to beware of doing business with this gentleman. He sent one of his .guru domains to auction on Sedo at the end of February. It was a no reserve auction, although in the auction details page he stated that he expected the domain was worth a certain price range. I won the auction at a four-figure price that was below that range and paid as soon as the auction ended. One day passed, two days passed and he was not delivering the domain, despite multiple contact attempts from Sedo. I called him and talked to him on the phone and notified him I had won the auction and gave him my transfer details. He said he was not the person who takes care of this and he would get in touch with that person and “decide what to do.” I told him “what to do” is to transfer the domain to me since I had won it fir and square and paid for it. Another several days passed so I followed up with an email. No response, nothing. Finally, I decided that even though I wanted the domain at the price I won it at, dealing with this type of seller is not worth the precious time of my life and the aggravation, so I allowed Sedo to follow up and eventually cancel the sale. Sedo has advised me I can pursue legal action against him for his nonperformance on a legally-binding agreement. I asked Sedo if he would be banned from selling or his account closed and Sedo said it had taken unspecified action against his account (which they could not discuss in detail). Unfortunately, this may be a downside of the new gtlds bringing new people into the domain space, some good ones with new ideas, but clearly not all. It is disappointing also because like many here I am passionate about domains and situations like this (and the people who cause them) tarnish the reputation of the domain industry and the many good people in this field. So you may want to think twice before bidding on a name owned by this fellow and pay mind to my story of my negative experience dealing with him.

  15. Tate says:

    1. Their old company was never worth close to 1 billion. It was a penny stock and even if there is a bubble, 1 billion has to be worth something, correct?

    3% would be $3 million.

    A billion dollar company would not be on the pinks sheets.

    2. Big gamble on gTLD’s – if anyone understood these new strings it is going to take 20 times the marketing budget to get the public to remember.

    WHY?

    Because if you were born in the last 20-30 years you typically know .COM

    So how much is a company or site going to have to spend to get my to remember .guru or .xyz

    gTLD’s are a way for a handful to make a couple of bucks and to convince the public its the new .COM boom.

    2-3-4 years from now, it will still be .COM and always will.

    Happy hunting boys and gals.

  16. Gabriel says:

    .Guru isn’t a horrible extension . . . but .Guru just sounds goofy to me. Can’t take it seriously.

  17. Gabriel says:

    Not that .Gurus wont sell. But I just imagine it being used solely for marketing purposes and then having the .Guru redirect to the .com or some other gTLD.

    For Example: A small auto shop named Mike’s Garage owns MikesGarage.com.

    Mike puts up a TV ad and he wants to let people know he’s an expert auto technician.

    So Mike uses “Visit – MikeTheAuto.Guru” which redirects to MikesGarage.com

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