How's the great dot-thing gold rush going? Well, coffee.club just sold for $100,000

A quick look at the economics – who's hot and who's not

The domain name coffee.club has been sold for $100,000 (£62,600), marking a growing acceptance – and value – in the market for new top-level domains.

In a novel move, the coffee.club owner will also pay the domain's registry operator through an installment plan: 10 percent each year for the next decade, with no interest.

"It is part of our Startup.club program," .CLUB chief marketing officer Jeff Sass explained to The Register. "It means that people are able to get a high-value name now but have money left over to actually run their business."

The company is benefitting from the fact that out of the more than 400 new top-level domains that have gone live on the internet this year, dot-club is one of only three have managed to break the 100,000 domain mark. With greater numbers comes greater awareness and greater value. (It also helped that .CLUB had the highest-profile launch of its names, with rapper 50 Cent using the domain 50inda.club as a fan website.)

"It's clear that usage is important," Sass tells us. "And we have an advantage in that 'club' has an actual meaning, and one with a global nature. About 60 per cent of our domains are being bought from outside the United States."

Other launches for new names have been less successful: for every dot-club and dot-berlin (150,000 domains and counting) there has been a dot-rodeo (200 domains) or a dot-mortgage (120 and counting). On average, new internet registries have registered just under 10,000 domains each, meaning the market as a whole is currently running at a loss.

It is a market that used to be very easy to understand: sell as many domains as possible at the lowest price possible. Every new registry planned to be the next dot-com. The market's new entrants are mixing things up, however, with a broad range of models, prices and approaches.

"We took an active decision that we would be like dot-com," Sass told us. "In order to make dot-club accessible: a low price and general availability. The flip-side is with low margins we have to achieve high volume."

The Coffee.club sale represents a large one-off profit to .CLUB. They have "reserved" a list of 6,500 valuable so-called "premium" domain names to be sold at higher than normal prices.

Other companies have taken different approaches. While dot-club domains are typically $15, a new baseline of $50 has started establishing itself among registries that are aware that the days of multi-million-domain launches are over and so they need to make more from each registration.

One extreme case of the premium names strategy has been in Minds+Machines launch of dot-London. Despite a healthy 50,000 registered dot-london domains, the company has reserved no less than 66,000 names for its own use and is offering them at higher prices, and with a higher annual renewal rate.

At the high-volume end, the most popular new gTLD is currently dot-xyz with nearly 700,000 domains but virtually every one of them has been given away for free: an effort to emulate the social media view of the internet where size of user base comes first and revenue second.

At the other end is dot-rich "the world's most exclusive address" where all domains start from $2,500. The jury is out on whether people want an "exclusive" domain name – so far just 53 people have been persuaded. But at that unit cost, the operator of dot-rich will likely only need to persuade another 100 people to make money. ®

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