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How will new TLDs affect your portfolio?

Kevin Murphy, March 3, 2011, Domain Sales

(Editor’s Note: this is a guest post by Shane Cultra, author of the popular domain investment blog DomainShane. I was interested in hearing new perspectives on new top-level domains, and Shane was good enough to provide his thoughts.)

It was inevitable. The growth of the internet and the ever increasing number of people using the web, was going to cause a shortage in domain names.

As the big three – .com, .net, and .org – reached the point that available domains were merely comprised of unpronounceable and hard-to-spell leftovers, internet users began looking for more.

Countries began to market their own ccTLDs as generics, trying to appeal to both local and international users alike. Domain name registries saw the dollar signs and began clamoring to introduce alternatives.

So now that they’re on their way, how will new TLDs affect the value of your domains? Will .web, .car, .love and all the other endless possible TLD options impact the value of your portfolio?

My answer to this question is simple: yes.

There is no doubt all the new TLDs will impact your portfolio’s value. If you own anything other than .com, I think the value of your domains will fall. I feel that .net and .org will fall the least.

The real answer comes down to how the search engines rank the new TLDs. The TLDs that hold the most value will be able to compete in both the US and the international search market.

If Google treats them well, then they will be in the upper tier. The problem is the more TLDs that Google ranks, the more choices a domain owner will have.

As we know, the more choices the lesser the value and chance of a sale. If there are only three shoes on the shelf from which to choose it bodes better for the seller than a shelf with 100 shoes.

In my opinion, the real money being made is by the companies selling these new TLDs. The new releases will leave the domain investing community and domain buyers in general “holding the bag”.

The .travel and .mobi TLDs showed early what will happen as people shy away from a TLD after a short period of time. Speculators were left with worthless domains.

In order for a new TLD to work it takes massive adoption. The local geographic community, the domain investing community, business, and the general public must be a part for it to succeed.

The new .co TLD has come as close as any in the last five years to getting over this hump; .tv, and .me, have also found their place.

A profitable endeavor for the companies managing the release , but only profitable for a handful of people that hold the best of the names.

So back to the original question, will this hurt the value of my portfolio? My second response to my “yes” answer is I think it will increase the value of your .coms.

Dot-com domains are king and will always be the king. They are scarce , wanted and all those that hold the same keyword in alternative TLDs wish they held the .com. Those that tell you different are either naïve or lying.

Domains are often compared to real estate and .com to beachfront property, and I think it’s a good analogy. Beachfront has continued to be considered the most-wanted and highest-priced real estate.

I would throw in big city real estate in this comparison too. You can still buy homes and land outside the cities and away from the beach. Homes just as nice or nicer. Areas of land that are twice as big but still don’t have the value of the beach and city.

When people think of the internet they immediately think .com. When they think of high priced real estate they think of the beach and city. Along with beach and city property, I believe people will always perceive the .com as the highest value.

This is how I am approaching my investment in newer TLDs. I am treading lightly. I continue to invest heavily in .com with a 10% investment in other TLDs. That 10% is invested in super high-quality keywords.

I have no plans to invest in lesser domains, as I think the only possible way to make a profit on my investment is development and I don’t feel comfortable developing domains outside of my field or keywords from random categories.

When I buy outside of .com, I tend to buy in my niche (the names of plants) as they are in my “comfort zone”. For example, I purchased hosta.me because hosta.com is taken and would cost me a ton of money.

I have all the photos and information to develop a site and with hosta being a very collectable plant I thought hosta.me would work. I also can target US Internet users using my webmaster tools – the audience I am trying to reach.

That same domain was a hand-register which tells me that although that has value to me, I would have very little chance of reselling that domain. In short, a bad investment for a flip. In my opinion, this will be the case with 98% percent of all the new TLDs so be very dot-careful.

99 super-short .uk domains registered

Kevin Murphy, February 8, 2011, Domain Sales

Nominet, the .uk registry, has allocated 99 one and two-letter .uk domain names to trademark holders including the Financial Times and Manchester United.

Most of the companies successfully applying for short .co.uk, .org.uk and .net.uk domains under Nominet’s recently closed sunrise period are household names.

Most also chose to acquire both .org.uk and .co.uk variants of their trademark. Only ten of the single-letter and two of the single-number options were claimed. Yahoo managed to get y.co.uk.

Overstock.com, which is currently branding itself as o.co, did not receive o.co.uk, despite having a trademark on the term, possibly for the reasons I outlined here.

One of the big winners appears to be a domainer. Scott Jones acquired 3.org.uk, s.co.uk, s.org.uk, pc.co.uk and pc.org.uk.

Nominet said: “A small number of contested domains will be involved in an auction phase to determine the successful registrant.”

The first sunrise was for owners of UK registered trademarks. The next round, set to kick off February 14, is for owners of “unregistered” rights.

The full list of domains registered can be downloaded here.

Noel Gallagher buys domain name with gig tickets

Kevin Murphy, January 31, 2011, Domain Sales

Former Oasis lead guitarist Noel Gallagher reportedly bought the domain name noelgallagher.com from a squatter in exchange for band memorabilia and free gig tickets.

According to British tabloid The Sun:

The former OASIS star found out recently that a cunning punter in Barcelona had snapped up the domain name noelgallagher.com ten years ago.

And The Chief’s plans to get things in order for his solo career were being held up by the Barca Bandit – because he was demanding a small fortune to hand it back.

Noel took matters into his own hands last week. He paid for the Spaniard to fly to London, put him up in a plush hotel and met him in person to thunder out a deal.

And after some serious haggling, and a few Oasis anecdotes, the chancer changed his demands from tens of thousands of pounds – to some signed memorabilia and guest list action at Noel’s next solo gigs.

I’m not sure how much success Oasis ever had outside of the UK. If you’ve never heard of them: briefly here in the 1990s they were regarded by some (mainly themselves) as the second coming of The Beatles.

I’ve never before seen a domain name story reported in The Sun, a notoriously unreliable but hugely popular Murdoch-owned daily rag, so I did a bit of fact-checking.

Whois history shows that the original registrant was from Madrid, not Barcelona, and that the domain was initially registered in 2002.

While the report claims Gallagher flew the squattter to London to negotiate the deal “last week”, the domain actually seems to have been owned by someone at Oasis’s record label since March 2010.

So either the cybersquatter got a free city break, or The Sun is — shockingly — reporting unreliable celebrity news.

The domain name does not currently resolve.

Did Twitter pay $47,000 for Twitter.co.uk?

Kevin Murphy, January 26, 2011, Domain Sales

The domain name twitter.co.uk, which was until recently listed for sale with a £30,000 ($47,000) price tag, is now owned by Twitter.

The domain now redirects visitors to twitter.com, and Whois records last updated a week ago show that it is now registered to the San Francisco-based company.

Until recently, twitter.co.uk led to a page calling itself a “thorn in the side of American imperialism” and containing a lengthy rant about the microblogging service, which The Guardian reported on in 2009.

It also, since April 2010, carried this notice:

This domain is for sale at offers over £30k. This valuation is based on the fact that I devoted 9 months of my life working on my own t.w.i.t.t.e.r. project in 2005. I have offered the domain to Twitter Inc, giving them “first refusal”, and as they turned me down I am now offering it to anyone else who may be interested. Obviously there are limits as to what you would be allowed to do with the domain and you should familiarise yourself with Nominet’s policies and, in particular, its Dispute Resolution Service (DRS)

The previous owner registered the domain in early 2005 for his own legitmate purposes, well before Twitter itself launched, so it was by no means a case of cybersquatting.

The domain would, of course, have been considered untouchable for any sensible domainer.

Nominet, the .uk registry, currently has no record of Twitter ever bringing a complaint to its DRS, so it seems likely that Twitter had to put its hand in its pocket to acquire the domain.

The change seems to have been first noticed by a Twitter user at the weekend. AcornDomains has a discussion.

(Hat tip: @MathewCoUk)

Is Microsoft buying Kinect.com?

Kevin Murphy, December 30, 2010, Domain Sales

Did Microsoft just file a UDRP complaint on a typo of a domain name it doesn’t even own?

When Microsoft announced its new Kinect games console earlier this year, it did so without owning the domain kinect.com, as I blogged at the time.

But this week somebody – I’m guessing Microsoft – has filed UDRP on the typo wwwkinect.com, which was registered about the same time as the console launched and is currently parked.

The complainant’s name doesn’t seem to be available yet, but the case was filed the same day as several other Kinect-related UDRP cases that almost certainly are Microsoft’s work, such as microsoftkinect.com.

Kinect.com currently belongs to an advertising agency called CAHG. The domain isn’t resolving (for me) at the moment, which makes me wonder if it’s in the process of changing hands.

It would certainly be unusual for the company to own a typo of somebody else’s domain, although I don’t think there’s anything in the UDRP rules that would prevent it winning the case.

UDRP, after all, only compares contested domains against owned trademarks, not domain portfolios.

While Microsoft would not have a leg to stand on if it filed UDRP against the non-typo domain, I expect a good case could be made that the large majority of people typing “kinect.com” into their browsers are looking for Microsoft’s console.

Alexa is showing that kinect.com has experienced a 350% increase in traffic over the last three months, and has increased its Alexa rank by almost two million places.

UPDATE 2011/01/01: Microsoft now owns the domain.