Frank Schilling and Mike Mann Discuss gTLDs

[Deleted member 70408]

I posted two interviews on my blog today - one with Mike Mann and the other with Frank Schilling. Each of these guys have made millions of dollars from their domain investments. They each run successful companies in the domain industry.

Despite their similarities in terms of successful domain investments, they hold opposite viewpoint about gTLDs.

Here are their thoughts:

Mike Mann - http://www.elliotsblog.com/mike-mann-on-gtlds-9737

Frank Schilling - http://www.elliotsblog.com/frank-schilling-on-gtlds-7163

Feel free to chime in to ask questions or comment.

 

[Deleted member 70408]

I posted a poll today to see who people believe may be accurate: http://www.elliotsblog.com/vote-mike-or-frank-7639

 

[siteman]

http://www.elliotsblog.com/mike-mann-on-gtlds-9737

What will happen to the money domain investors spend on gTLDs?
They will lose most of it

I agree with him

 

[ImageAuthors]

I agree with him

And I agree with him agreeing with him.

But, of course, most domainers lose money on their .COMs too. I'd say that if you add up all the investments from all domainers in the new gTLDs, then a much bigger percentage of that total investment will be lost than compared to a comparable investment in more established extensions. But, as with .COM, the successes and failures will not be uniformly distributed. There will be a minority of lucky or savvy people who will make money with some new gTLDs. I'm speaking about domain investors as opposed to registrars, registries, and the armies of gTLD consultants.

There are 2 different questions:

(1) How much success will the new gTLDs see online, from the vantage point of the average web consumer?
(2) How risky and/or profitable is investment in the new gTLDs, from the vantage point of domainers, compared to other kinds of domains?

Obviously, the new gTLDs cannot be good investments unless the answer to question #1 points to success for the gTLDs themselves.

But it's important to note that success of the gTLDs online does not necessarily make them good investments for domainers. In other words, a negative answer to #1 implies a negative answer to #2; but a positive answer to #1 does NOT imply a positive answer to #2. #1 is a necessary but not sufficient condition for #2.

 

[ImageAuthors]

I ask myself whether Frank Schilling -- if he were not running a registry now -- would be investing in these new gTLDs as a domainer. He has expressly stated that he won't be chasing SLD strings in the new gTLDs. In the interview, he mentioned lack of time as one reason; and I'm sure that's a legitimate reason. Another reason might be a perceived conflict of interest; but that's neither here nor there. Obviously, we can only speculate what Frank Schilling would do if he were not running Uniregistry.

But Frank Schilling certainly understands supply and demand -- especially the value of scarcity. If the goal is to offer a multitude of cheap catchy gTLD strings to the general consumer, then I can definitely understand his optimism about the general consumer liking the new gTLDs. Would they like them as much if domainers somehow bought them all up and made them expensive like .COM's? I doubt it. Then again, why should a domainer buy 1 domain in 1 of these numerous cheap catchy gTLDs and hope to sell it for 10, 100, or 1000 times its purchase price? He'd be competing against the same multitude of cheap catchy gTLD strings. And why should the end user pay a premium on a domain in some new gTLD when there are hundreds of other options still available to register? Or maybe domainers have bought up ALL the other options? I'm dubious that could even theoretically happen, given the volume of domains involved. But even if it did happen, that means 1 end user would pay 1 domainer a premium price on 1 domain because 500 other domainers have bought up 500 other domains. So 1 domainer wins. The end user pays an expensive price -- just as he now would for a .COM. And 500 domainers lose.

If Frank Schilling weren't running Uniregistry, I think he'd do the math too. And he'd probably mostly avoid investing in domains with these new gTLDs for the same reason I would:

Demand ... the same
Supply ... massively increased
Prices ... ?

If I were Frank Schilling around the time this flood of new gTLDs first began being discussed, I would ask myself how I could get involved with the largest chance of profit and the minimum risk. I would immediately see that prices for these new gTLDs will be driven very low, simply because a massively increased supply will have to compete for a limited-as-ever demand. So the answers would be two:

(1) Avoid investing in particular domains with these new gTLDs (since the profit potential from resale will be far inferior to .COM, where supply is low and demand is high)

(2) Start a registry to get some profit from the interest in cheap catchy creative gTLD brands. There, at least, wholesale volume can make up for the low wholesale prices the inventory will need in order to sell at all.

I'm sure Frank Schilling is also motivated to innovate and be part of a massive change. He doesn't need more money; so his motives are probably as pure as you can get. But he's also smart enough to know not to throw money away -- which domainers would be doing, primarily, if they buy up lots of domains in these new gTLDs.

 

[Yaadoo]

There's two issues for domainers here:

1.) Can they make money with gTLDs?
2.) How does this affect their current domain value.

I think there's already been a lot of reasons provided why gTLDs won't be super successful for domainers at least in the short-run. Long-term, who knows what will happen. I think what we can say though, its that it's going to hurt the .com, .net, .org, etc values. The question is whether it will be a big hit or a small hit.

 

[Vanster]

It will be an interesting case study for sure. .com will always be king; cctlds have their place; and .whatevers, well, time will tell

My advice is to find competent registrars with short pre reg queues and go for gold