Low Price .US Domains are Getting Flipped a Lot

Over a year ago we decided to let expire more than 50 mostly bad or dubious value letter dot-us names that we had been holding since as long as the year 2002 when most of them were acquired. We dropped them due to no traffic or income, plus poor acronym use potential.

It has been quite interesting watching the majority if not all of that group sold, resold, resold, resold and sold again on the domain name forums between domainers.

The sale prices are mostly between say $5 to $20. What makes it even more interesting is what with the low prices I don’t see how the domainers are flipping them for a profit and if they are making some money doing that it would not seem to be worth all the time and effort involved. It seems there is no end in sight as I again see many of them posted for sale again on the forums by their latest owners.

Property.com/Properties.com vs Buying a New TLD

Breaking News: Rick Schwartz sells Property.com & Properties.com for $4 million plus stock. Of course, congrats to Rick on his latest amazing domain sales.

That great domain name sale got me seriously thinking about something I have been dwelling on for a long time, which is the potential impact of the new gtlds, which will be coming online as soon as 2012.

What I mean by that is that since the .property and .properties tld extensions can be purchased for $185,000 each (plus other fees and expenses) it makes the 185k cost look like a great bargain (at least to me), compared to spending millions on the dot-com domains.

Think about this for a minute, would you prefer to own property.com at a cost of a few million dollars, or buy your very own ‘property’ extension for less than 10% of the dot-com price? At this time, some of you may say property.com is best but I feel that view is mostly because so few realize the great impact the new extensions will have in the future. In fact, I predict they will eventually dominate over other tld extensions.

A reason I say that is I am sure most all large and possibly mid-size corporations (maybe even some wealthy individuals) will buy their own extension. After a while I feel it is likely they will decide to brand under their own extension instead of the dot-com.

For example, assuming Ford buys .ford and also owns ford.com, don’t you believe one day they will switch their online brand to .ford and simply redirect ford.com to .ford? Keep in mind, dot-ford should be able to resolve stand-alone, depending on the server dns setup, so you can just typein “ford” to your browser and it will resolve. Same is true for “property” and “properties.”

So again, why spend millions buying the dot-com when you can buy the word without the .com to the right of the dot for 185k? Also, keep in mind, that cost is expected to drop sharply in a few years, well below 185k.

An excellent example of the benefit of going right-of-the-dot vs left-of-the-dot is the acronym domain-name “POS.COM” (a somewhat obscure acronym intended to mean “Point Of Sale”) which has me wondering why anyone today would offer almost a million dollars for pos.com when for “only” 185k they can as an alternative possibly purchase the .POS extension.

Another example is cars.net which sold for a staggering $170,000 last month according to dnjournal.com. The reason I say ‘staggering’ is since it’s a .net extension it will lose a good share of its traffic to .com from typeins. That’s a big reason dot-net is considered to be such a poor choice for a business and branding is difficult.

Wouldn’t it make much more sense for the buyer of cars.net to spend just 10% more and apply for the ‘cars’ tld? Can you imagine the powerful value of owning .cars tld vs cars.net! There really is no comparison when you consider how a business could easily brand themselves as ‘cars’ and tell everyone just typein the word ‘cars’ (and forget about adding .com or .net).

One more example is “StockBrokers.com” that recently sold for $185,000, which by coincidence is the exact same price as buying .stockbrokers extension.

Think seriously about this, wouldn’t you really prefer to tell websurfers to just typein “stockbrokers” to reach your website vs the longer “stockbrokers.com” There are many other examples where the cost of buying their own tld extension would have a lower cost vs buying the high-priced dot-com domain, and also make more sense for overall branding purposes.

As a cool monetary benefit, and option, you will also be able to sell to the left-of-the-dot names for extra income to enable other brokers to buy a domain such as TopBroker.StockBrokers.com, for example, plus you can sell unlimited numbers of other domains to the left-of-the-dot since you own the right-of-the-dot. Isn’t that interesting!

Major Dilution to Existing .tld extensions i.e. .net

We have been writing for some time about the massive dilution to the current major domain name extensions which will be caused by the anticipated vast number of new gtld’s expected to be introduced starting in 2012.

As an example of dilution, we will discuss the long-time well known dot-net extension. It’s always played 2nd fiddle to the vastly superior dot-com however .net will soon have lots of competitors competing with it and causing general overall dilution to all extensions and to dot-net in particular.

The initial high Icann cost of $185k to buy your own extension will no doubt result in mostly the top brands or keywords being purchased at this time. However, we are sure the cost will drop a lot and more and more mid-size or non-famous brands and keywords will eventually have their own extension.

Using dot-net direct competition as an example it’s likely extentions such as .met (dating?), .let (EU rentals?), .pet (pets?), .wet (water/pools?), .bet (gambling?), .get (search?), .jet (jet sales?), .vet (veterans?), plus longer ones like .mynet .enet .inet .netgear and the real obvious .network will be taken in the future.

With so many similar potential domain name extensions all competing for Internet traffic and marketing themselves it would seem after a few years the direct dilution just to the old dot-net extension will result in many people saying ‘dot-who’ about dot-net. Therefore, we can predict the already low value .net domains will decline even more in general value.

Major Bear Market Expected for Geo Domains

Starting next year unlimited numbers of new domain extensions are scheduled to be sold and some will be up and running. We always assumed major brands such as .sears .apple .microsoft .hp .godaddy .ibm and many others would want to own their own extension, not necessarily to sell domains but for their own product, use and branding.

Now I am hearing many reports about large U.S. and international cities including the cities of .tokyo .sydney .london .newyork .sandiego .la .vegas and others planning to also buy their very domain extension. At an initial cost of $185k it may seem high to you or me but to a large corporation or big city it is not too significant a cost.

Having heard about many major cities with plans to buy their own extensions it would seem logical the end-effect will be to greatly devalue the domainer or investor owned geo dot com’s, including mid-size city dot-coms. The smaller or mid-size cities may not want to invest now or be able to budget $185k but they will likely do so as the ICANN price drops (and I am sure the fee will decline rather quickly and dramatically within a few years).

At that time I believe you will also see many mid-size cities such as Palm Springs, Bethesda, Burbank and Scottsdale for example, getting their own extensions. It’s also possible they may not wait for lower costs and instead apply soon, agreeing to pay the 185k ICANN fee.

Think about this scenario; A visitor (or resident) in Scottsdale Arizona knows many cities now own their own domain so would he be more inclined to typein to a search box or the browser window “Scottsdale.com” or the word “Scottsdale” without an extension? In our opinion there is little doubt as time goes by the word Scottsdale will prevail as the most popular choice, relegating Scottsdale.com to 2nd tier status, which dot-com decline would be ongoing and the scottsdale.com down-trend be more pronounced as time goes by.

In our opinion, this news marks the beginning of a very significant and long term bear market (a likely permanent major drop in geo domain values), impacting mid to large city Geo domains in particular. I would expect a number of them to go on the auction block soon before they decline more in value.

Overstock.com is rebranding itself as O.CO

Found this on the Overstock.com website this morning. It’s also Super Bowl Sunday, so perhaps not just a coincidence since the .CO extension domain names will be strongly marketed in today’s Super Bowl commercials, making Overstock.com’s announcement real good timing in that regard.

“Shopping at Overstock.com internationally is about to get easier with the O.co domain. Since the company acquired the O.co domain name in July 2010, Overstock.com has been simpler to access by mobile Internet users. Now, to minimize confusion and hassle while translating the word “Overstock” into other languages, Overstock.com is rebranding internationally and will be known as O.co as of Jan. 2011. This guide will address any concerns you may have about Overstock.com’s new domain.

Q. Why will Overstock.com be known as O.co internationally?

A. In July 2010, .co domain names became available for general purchase, and Overstock.com acquired the O.co domain name in order to reinforce the “O” of the Overstock brand and capture customers’ attention with a short, memorable web address. The short .co domain will also solve translation issues and allow Overstock.com to create a universal logo, brand and web domain name that will be recognizable internationally…”

Click the Overtstock.com® woman on the couch picture below to visit the new O.co® website: