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Donuts spends $50 million on new gTLD auctions

Kevin Murphy, June 16, 2014, 07:40:50 (UTC), Domain Registries

Donuts has revealed that its bill for new gTLD auctions has so far come to $50 million.

That, coupled with some other data released in a blog post last week, suggests that it’s spent over $2 million, on average, per gTLD.

CEO Paul Stahura wrote that the company has participated in “roughly” 50 auctions and that it’s won more than 50% of those it’s participated in.

“We’ve spent $50M to win those auctions to secure the resulting TLDs,” Stahura wrote.

According to my numbers, Donuts has been in 45 auctions and won 23. I may be missing a couple, but the numbers fit with Stahura’s. That would make an average spend of $2.17 million per gTLD.

That doesn’t mean the company has burnt through $50 million of its funding, of course.

In private gTLD auctions, the winner pays the losers. By losing at least 22 auctions, Donuts could just as easily be breaking even.

Not all of Donuts’ auctions have been organized by Applicant Auction. A few were settled via other means. Applicant Auction takes a 4% cut, which means its take so far is approaching $2 million.

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Comments (4)

  1. ADI says:

    I cannot believe I see .xyz ad on your blog.
    I will not visit your website any more.

  2. Alejandro says:

    Donuts’ actions remind me of an old joke:

    Q: How do you make a small fortune in gtlds?

    A: Start with a large one.

    To me, it seems obvious that this money will be gone forever, never to be seen again. What am I missing here?

    • zack says:

      gone forever? I doubt that – although it depends on what these 23 TLDs are averaging in terms of domains names sold and price per domain name.

      Assume these 23 TLDs average 35,000 names per year at $20 then they would be close to break even after 3 years. Of course this does not consider marketing or fees paid to their vendors but I don’t see the money being “gone forever” as you point out.

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