Why is Domaining Still so US Focused?

It was always very interesting but also wired to me that domaining was so US oriented. When I was at my first T.R.A.F.F.I.C. show in Las Vegas in 2007 nobody, NOBODY was really interested in ccTLDs. COM was king and there was no doubt  about it. This is still the case – COM is the most popular domain name in the world but this world is expanding very fast and COM share market is shrinking.

The truth is that in the European Union COM is usually the second or third domain name and ccTLDs are the kings of its markets. This is exactly the case in Poland, where I live and where are 1,7M .pl names registered. There are also 190,000 .eu names and only 170,000 .com domains. The same situation is in other markets such us .de (Germany), .co.uk (United Kingdom) etc. According to the lates VeriSign report there are 83M COM domains and 76M ccTLDs.

And don’t get me wrong – it is OK for me as I have less competition here in Europe and I can easily buy good ccTLDs cheap and develop ccTLD projects but it is always strange to see how ignorant some people are.

The same case is with IDNs. I mean IDN names not TLDs – just to give you an example: pożyczka.pl would be IDN for nonIDN version pozyczka.pl. The meaning for that domain is  “loan”. And YES, people in Poland start using IDNs a lot and in 2-3 years they will get more popular than nonIDNs. How do I know that? I see my IDN names statistics. For some pair of parked names – IDNs are getting more UV and revenue than nonIDNs.

But I have good news for ccTLD investors – good times for us are coming :) DomainSponsor has recently announced opening its subsidiary in Europe, DomainFest is coming to Prague in October 6-7, 2010 and T.R.A.F.F.I.C. conference is coming back to Europe in 2010, this time to Milan (Italy) and Dublin (Ireland). In September 2009 we heard that Go Daddy expands further into Europe with new data center to ensure faster access for Go Daddy’s growing European customer base. More of such news will be announced this year – there is no doubt about it.

And world is bigger than only US and the EU. There are big markets in Asia, South America as well – great potential there for sure. According to Internet World Stats US has now ~ 220M Internet users, EU: 310M, Asia: 740M (China: 360M), Brazil: 70M. BBC prepared nice Internet map, where you can see Internet penetration and users in the years 1998-2008. There are 1,7 billion Internet users on our planet Earth.

BTW Check out Facing The Absurd blog written by one of the finest European domainers. You will find there things that you won’t read about anywhere else.

Daniel Dryzek

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15 Comments »

  1. Dan said

    Hi Daniel,

    I’m happy to hear US based companies are expanding to Europe. Those are some amazing numbers. 1.7 billion is a lot of burgers to serve. LOL ;)

  2. Mike said

    Look at the PPC revenues of US and non-US traffic, and you will quickly discover why nobody cares about generating non-US traffic.

    Domains under ccTLDs are also not rare (as you point out, less than 2 million registered in some ccTLDs vs. 80 million in COM). Rarity is what drives up direct sale prices.

    • Thx for your input. I agree but this is the reason why I invest my money in ccTLDs – domain prices are not overpriced (in most cases) and as you pointed out – there are not to many names registered – so there are a lot of names that are great and not taken yet. OK – the rarity comes into play here but best names are taken anyway and good domains have nice prices already.

      Regarding PPC revenue – this is declining both for US and non-US traffic. And that is really not so important. The cost per acquisition does really matter. So if I can buy domains with non-US traffic for less than domains with similar but US traffic – then it doesn’t really matter for me if the PPC is lower. I paid less, so I can expect less revenue from the PPC.

      For me the potential is important. I will invest my money where the ROI is higher. In my opinion return on investment in ccTLDs will be higher in coming years and that’s why I bet on ccTLDs.

  3. Chip said

    It is true that ccTLDs are growing at a faster rate and aftermarket prices are moe affordable. Two things that need to be looked at when evaluating your figures:
    1) How many of those ccTLDs are registered by US based investors(domainers) looking for an SEO lift (and therefore US based visitor ad revenue)rather than a fully developed site? The numbers are very significant. Also, how many of those ccTLD registrations are pushed to a .com site? Again, those numbers are big as well. Take a look at .eu domains for example. How many .coms are redirected to the cctld? Not very many I would be wlling to bet.

    2) It is fine to look at ccTLD in total as a goup and compare them to .com but you are not putting the domains into contect. Traffic anaysis will show you the com traffic and usage is major multiple greater than all ccTLD combined. Also every ccTLD’s audience is limited to the Geo it represents, so you can only compare an individual ccTLD with .com, not all of them together, if you want a picture of comparitive value.

    • >90% of ccTLDs aren’t registered by domainers. And most of that 10% left is regsitered by nonUS domainers. Why I think so? Because most US domainers haven’t been really interested in ccTLD market until last year, where there was a major crisis in the US.

      If we talk about .eu – this is very new TLD and I think it is one of the most successful among other new TLDs – but of course a lot of them is used only for redirection. But I also see a lot of new projects that use .eu domain name as a main domain. I believe in .eu domains. But if we talk about ccTLDs as .de, .pl, .es, .fr, .co.uk – most of them, really MOST, is used as a main domain name and not redirection to .com site. To be honest – most of them don’t have .com names and use only ccTLD for their website. For example – if you want to build an Internet brand in Poland you will use .pl domain name in 99%. If you want to build global brand – .com will be your choice in most of the cases. But most of the companies do their businesses locally and ccTLDs work perfect in such cases. And even if you sell your products globally it is more often now to use multiply ccTLDs for different markets than one .com website for all of the markets.

      I look at ccTLDs as a group, because I see Europe and European Union to be more exact, as a whole. I am an European investor and I invest in European market and that means I buy ccTLDs and not only one TLD.

  4. .. said

    ccTLDs will soon overtake .com in global domain registrations http://bit.ly/2VGDfo

  5. Jacek said

    Daniel, while I’m generally a blog lurker, I think it’s time that I finally chime in here and correct you. Every time that I read one your posts about the Polish domain market, you always paint the geography so that it leans towards your own personal domain holdings, and I find this quite disingenuous. First off, .eu is no where near to being as popular as .com in Poland as far as development is concerned, and to even imply that it is a second to .pl is totally absurd. In fact I would go so far as to say that there are more developed .net and .org domains in Poland than .eu. With the exception of a few top level Polish keywords, .eu is a terrible landscape for any domain investor. It’s a low liquidity extension, with even mid level Polish keywords domains being worth reg fee. And to make matters worse, Google still doesn’t favor it in it’s ranking algorithm.

    I know you are primarily a .pl and .eu holder, but please start being honest regarding the landscape outside of .pl. I honest I am really tired of listening to you push this .eu, please let the market decide.

    • Regarding the liquidity.. “The .de extension remains the most commonly sold ccTLD domain on the Sedo marketplace followed by the .co.uk domain/extension of the United Kingdom. The European extension, .eu, launched in December 2005, takes third place.” http://sedo.co.uk/fileadmin/documents/pressdownload/domainmarketstudy2009-uk.pdf So not bad at all as for 5 years old extension.

      In terms of developed sites .com may be more popular in Poland but I see trends and see that there are more .eu names in Poland than .com and I predict that .eu will be the second extension in Poland. We can check if I was right in one-two years.

      And this is how I see things. This is my opinion and nobody is made to think the same :) So you can have different opinion on .eu domains and that is OK.

      • Jacek said

        Again Daniel, I think you’re letting your personal domain holdings distort reality. Everyone knows ccTLDs sold at Sedo are unevenly leaning towards .de, .co.uk, and .eu. Please don’t try and hustle me into thinking that their marketplace represents entire ccTLD industry averages as a whole. It’s just one very tiny tiny piece of a much greater pie, with the largest slice being private sales.

        What trends are you referring to for the Polish market with .eu? I see new websites appearing in Google.pl every day for .com, .com.pl, .net, .org. Where are all of these .eu projects you are talking about?

        Setting aside .com vs .eu in Poland, at the end of the day, I would take a .net or .org Polish keyword portfolio over a .eu portfolio (for the same keywords). I would probably take .com.pl over .eu as well, though as both are down towards the very bottom of the bargain barrel, I would have to think about that last one.

        .eu in Poland and elsewhere is for gamblers, not businessmen. In two years .eu will go nowhere, especially with the domain industry shedding equity by the month around the world, for .com, .pl. etc. It’s a dirt cheap bargain buyers market now, if you’re in a acquisition phase as I am then you know it’s softer now than in 7-8 years. It will take 5 – 10 years for the domain industry to come back to 2005-2007 levels, and that is assuming economic recovery starts today. Looking at the US economy, plus Greece, there is a chance things will slide down further.

      • As I told you Jacek – you have full rights to have your own opinion :)

        My is that .eu is not going anywhere and will stay with us for much longer time than 2 years ;) And yes – Sedo marketplace is quite representative for domain industry.

        I see many small and medium companies setup their websites under .eu domain name and that’s why I believe .eu has a bright future.

        But as I told you – you can have different opinion on that matter and I respect.

  6. Jacek said

    LOL Daniel, Sedo sales are not representative for the whole domain industry, and stating so makes you appear quite novice. Most domainers know that the majority of domain sales as a whole are private transactions, 99.9% of which go unreported.

    Sheesh Daniel… :D

    • Sedo is as representative as it can be. I am novice in domaining (only since 2007) and learning all the time :) But for me Sedo is representative as for transaction conducted through Sedo. You can’t measure something that you don’t know about. That’s why I use Sedo sales reports. There are no reports on sales that were not disclosed ;)

      And my comment about Sedo was only an answer to your point about liquidity. Sedo report just shows that there is quite nice liquidity in .eu market :)

      Jacek – if you don’t like .eu domains, you don’t invest in them and don’t see any reason doing that – fine for me. But why to convince so obstinately others to your opinion? :) Let people decide.

      • Jacek said

        My advice to you Daniel, as I’ve been buying domains for 12 years now, is get to know the domain industry outside of Sedo sells, outside of the domainer blogger world, and outside of DNJournal. The amount of misinformation and complete drivel pouring through domaining.com, is precisely due to the fact that most of these people fail to realize that domain trading is much larger than the tiny little speck of sale charts they’re all pouring over. Based on my own personal unreported sells and purchases, and every other domainer I know, trust me when I say that the real “life vein” of the industry is what you cannot see.

  7. “most of these people fail to realize that domain trading is much larger than the tiny little speck of sale charts they’re all pouring over.”

    Absolutely!

    Another question to think about is “How many of these so-called domainers are REAL, full-time investors?”

    Most successful domainers are still, very much underground. Even in .au, almost none of them “do the conference thing” and you will never read about their sales on a blog somewhere.

    • But is that really helpful to the industry that the business is being done underground? Maybe that is the reason why domaining still isn’t widely accepted and not treated seriously.

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