Big, Overpriced and Out of Touch
That has been the knock on some of the early players in the domain industry. Network Solutions, Register.com are hemorrhaging domains to the lower cost providers because they are stuck at a higher price point, ($35) that is 4-5 time higher than what is available out there. The conventional reasoning is that because they were the first, they happen to now manage the bulk of the larger corporate organizations domain names and they have no issue with $35 as long as the domain is safe and sound. To lower their price would be to instantly remove renewal dollars from their compan’s bottom line. Makes no sense.
What is Their Role?
They don’t want to get involved in a price war with GoDaddy and all the other low-cost providers out there. They have good thing going and “It’s Hard Out Here for a Pimp” when your trying to get money for the rent. Remember they are positioning themselves as providers to businesses not domainers. Not that businesses are not looking for savings but this is still chump change. They may change their policy, but they shouldn’t. Lets take a quick look at some potential numbers.
GoDaddy 35MM Domains x Avg $9 renewal Fee – $7 in ICANN/Verisign costs = $70MM margin.
NetworkSolutions 5MM Domains x Avg $35 renewal fee – $7 in ICANN/Verisign Costs = $140MM margin
1/7th the number of domains, 2X profit. Pretty compelling, No? Now these are just for illustrative purposes but you get the point.
Do They Need to Do Anything to Stay Relevant?
That gravy train cannot last for ever and they need to expand their options and their customer base. They need to develop or buy a better wholesale/generic label registrar than they have now, to attract bottom feeders (us) and experiment with pricing and products before they roll it up to their retail clients.
Why do We Need to Thank Them?
Register, Enom Retail and NetSol are doing us all favors by keeping their price high. It buoys the value of domain names to the retail/end-user market. The worst thing WE can do to domains is make commodities out of them. You need to remember that EVERY domain is an asset. You need to value domains based on their potential and opportunity not their current performance. We all believe domains are not just URLs but online real estate. That real estate has the potential to house a multi-billion dollar enterprise. That is powerful.
Online Advertising and Domains
Lets take online advertising. We have seen different customers who buy ad space in the exact same space and area with the exact same traffic and visitors. Some of those ads generate a 4+% click through rate and high sales conversion. Some ads do .01% click through –a tiny fraction of the first. The performance depends on–The company and product in the ad, the offer/graphic, and promotion and support behind that ad. When talking to potential advertisers, how should you calculate the value of that space? Use the top performer as a potential baseline and put the onus on the advertiser to try and match that performance. We are talking about the same traffic, visitors and space after all. Domains (to an extent) are similar.
The End Game
Granted, some domains are better than others but all have the potential. People pay $100 a month for their cell phone with only a fraction of the functionality of a domain. We need to keep that in mind and we have a responsibility to the public to demonstrate that value. That way we will be able to make a nice profit on our own portfolios and retire early!!! Now go forth and prosper and thank Register.com Network Solutions for holding firm!
