yadayada Posted October 1, 2014 Share Posted October 1, 2014 The spin off formerly from demand media. Stock is down quite a bit from the spin off. Thoughts? Im struggling to see the different outcomes here. Link to comment Share on other sites More sharing options...
usdtor05 Posted October 1, 2014 Share Posted October 1, 2014 We have looked at this in pretty good detail and passed. We could not get comfortable with the wholesale business as it would appear they can't operate it at any sort of reasonble profit ex. the aftermarket. Without selling the additional hosting/et al services, it doesn't look like this business is all that profitable (even going back to before they entered the new GTLD space and costs ramped). That is somewhat surprising given that they are around $10/domain and Verisign takes roughly $7.85 for a .com. Management claims they have solidified the aftermarket around $28M/year. If the aftermarket really is solidified You can make an argument the aftermarket business has value but everyone we have talked to says the old days of domain selling and ads on expired domains are in the sunset period with the url bar becoming search engines thereby removing the ability to push people towards ads. This would be corroborated by NAMEs aftermarket business' heavy decline. We track the GTLD stats to see if any of them are taking off but so far there hasn't been a lot of pickup. It's certainly early in the game but we aren't smart enough to handicap the new GTLDs success, so we passed. Link to comment Share on other sites More sharing options...
scorpioncapital Posted October 2, 2014 Share Posted October 2, 2014 I don't think .whatever is ever going to be in the same ballpark as .com, as a result, any investment is based on a marketing push and a future unknown about the adoption of these names - which if one can grasp it might be worth a look. Link to comment Share on other sites More sharing options...
usdtor05 Posted October 2, 2014 Share Posted October 2, 2014 Agree with you. You can track the stats here to get a feel and develop and waterfall analysis. http://ntldstats.com/ Link to comment Share on other sites More sharing options...
yadayada Posted October 2, 2014 Author Share Posted October 2, 2014 not a lot of rightside's gltd's in there. Link to comment Share on other sites More sharing options...
usdtor05 Posted October 2, 2014 Share Posted October 2, 2014 i guess that tells us something Link to comment Share on other sites More sharing options...
apparat Posted October 2, 2014 Share Posted October 2, 2014 NAME will also make money by acting as a registrar for gTLDs and have given guidance in the range of ~30% per domain name sold. More importantly though, they have an agreement with Donuts to provide all their actual registry services that are required for Donuts to administer/offer their gTLDs. It's not clear though if this agreement enjoys "equal rights" like their other agreement to share application rights (as per CFO in a recent presentation). However, if the agreement is indeed significant and Donuts and NAME approximately split registration fees on Donuts' gTLDs (of which there are about ~1m or 40% of all gTLDs right now), this opportunity could be substantial and would not depend on any of NAME's gTLDs taking off. Still trying to find out more about this. Link to comment Share on other sites More sharing options...
yadayada Posted October 3, 2014 Author Share Posted October 3, 2014 So who owns .xyz and why is it so popular? Link to comment Share on other sites More sharing options...
apparat Posted October 3, 2014 Share Posted October 3, 2014 Most sites/blogs mention that the majority of .xyz domains were either given away for free (looks like some .com domains were auto-registered on .xyz and given to the .com domain owners) or you were able to register them at a steep discount of $5. According to some sites, this happened before when .info was introduced and free domains were given to .com owners. The number of renewals on these 'freebies' after a year (which then, of course, cost $) was negligible. I'd be curious to hear from someone who has been following this space whether the free .xyz domains are viable/monetisable. Link to comment Share on other sites More sharing options...
Haasje Posted October 17, 2014 Share Posted October 17, 2014 I'm long with a small position here. I think it boils down to: -If gTLDs take off this will be a many bagger and if they don't it's almost worthless except to an acquirer with enough scale in the registrar business The things is I think gTLDs make a lot of sense. In my opinion it's not so much if they will take of but when will they take of. Why I think gTLDs will get adopted: -trustworthyness: a domain like jones.consultancy is just more trustworthy than alfredjonesconsultancy.com, professional trustworthy domains tend to be short and I think that's somewhat ingrained -memorability: its obviously valuabe to have a domain that people will be able to remember, even great search does not entirely negate this value and search does not Always solve the problem when you are trying to remember a site -seo reasons: this is mostly speculative but domains could start playing a bigger role in SEO again -the cost of a domain is still very low in terms of the overall investment required to run a website, the demand for great adresses is not that flexible to price I think but demand for "meh" adresses is very flexible to price Given the difference in margins on gTLDs compared to the legacy TLDs, they just don't have to sell that many to hit the ball way out of the park. I wrote an article for SA arguing the bull case, there are also several articles there arguing the bear case. http://seekingalpha.com/article/2566705-rightside-the-market-doesnt-realize-how-useful-gltds-are-and-how-adoption-affects-earnings Link to comment Share on other sites More sharing options...
scorpioncapital Posted October 17, 2014 Share Posted October 17, 2014 I think MCHX is the better deal here. They have 280,000 .com domains and 6% are very high quality names. The portfolio is virtually free at current market prices and has significant type-in traffic, it's kind of like passive real estate, only much better as it's not capital intensive. Link to comment Share on other sites More sharing options...
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