There’s a new trend in the world of domain names: Live websites are being sold in tandem with in-demand domain names, and the first buyer is a donut company. Up for grabs at auction was the right to sell domains ending in .reise, German for travel, and there’s a lot more at stake than meets the eye. This is just a hint at how the whole domain naming system will operate in the future since generic top level domains (or gTLDs) are slated to become a popular asset that’s tradable. In the past, these were a “sticky” part of a business that wasn’t able to be sold or transferred.
According to reports, Donuts paid a hefty sum for the .reise. It’s unknown exactly how much they ponied up, but the bid began at $400,000 and Donuts beat out three other bidders. Already, Donuts has .reisen so snagging .reise is a natural next move. Heise reports that the original .reise owner decided to sell after finding out Donuts scored .reisen and might be taken by a complementary gTLD.
One Tasty Treat
Heise also reports that the Donuts company owner Axel Schwiersch “had unexpectedly bad luck” when he found out a US competitor “was under better conditions at the start due to a more favorable place at the draw.” Now, there are just over 4,100 .reisen domains and about 1,300 .reise domains registered. By German standards, both gTLDs are relatively popular and can nearly be used interchangeably. However, auctioning off .reise at all suggests there are big changes in the domain registries sales as a whole.
Consider this: .co was sold in 2014 for an incredible $109 million (it went to Neustar post-2009 relaunch). Initially, the .co was designed for startups, but it’s gone on to achieve success for all types of businesses. Even 15 years ago, the rights for .tv sold for $50 million to Tuvalu and would likely sell for much more today. Now, everything from .xyz to .london is selling at incredible prices and there’s no sign of it slowing down anytime soon.
A New Market
Prior to expansion, only 22 gTLDs existed (obviously, the most popular was .com). However, since 2014 alone over 50 brand new gTLDs have been put on the market. It’s expected that at least 500 more will be available by the time 2015 comes to a close. So far, companies are going for just one new gTLD but that may shift. There are also exceptions, such as a handful of companies picking up hundreds of TLDs at a time. Donuts has 307 applications for domains and Google has 101.
gTLDs are also being seen as an investment opportunity, and many owners have said they plan to sell in a few years. However, switching to a fluid market for gTLDs might impact a plethora of domain owners. It’s no surprise that .com registries are getting more expensive each year, but what people don’t realize is that whoever owns gTLDs can charge whatever they like. Currently, most gTLDs charge between $10 and $50 per year. However, there are absolutely no regulations in place that can stop a gTLD owner from charging thousands overnight if that strikes their fancy.