.XYZ Domain Registry: “How To Blow 1 Million Dollars In 2 Days” (Plus Cheap Renewals At West .cn)

xyz domains

The .XYZ registry decided to blow more than a million dollars in 2 days to boost they registration numbers. Also a new renewal deal with West.CN and .XYZ domains comes to light.

.XYZ $0.01 Domain Name Promotion

XYZ registry is running this promotion for the past couple of days offering $0.01 .xyz domain name registrations. Yes, that is $1 for 100 newly registered .xyz domains.

.XYZ went from about 2.85M domains to about 3.65M domains in about a day adding about 788,173 domains according to namestat.org.

People are buying all sort of crap domains like NNNNNN.xyz, LLLLL.xyz or even CCCC.xyz.

Do you know what happens to extensions that offer free or nearly free domains? They become spam/scam heavens and people think they are worthless.

xyz-001

I bet they will go over 1M new domains before the promotion is over. That means that the XYZ registry will have to pay $0.25 for each domain to ICANN. That is the ICANN fee paid from registries for each registration or renewal year. That would be $250,000 for 1 million registrations.

On top of that you have to add the fee that is charged by the .xyz backend provider that is CentralNic. Although there is no information that I know of on how much the backend fee per domain name is, I guess it is at about $1 per domain. Because .xyz has such a big volume compared to other New gTLDs I suppose they could get 50% off. So my guess is that the .xyz backend provider fee is $0.50 per domain. That is another $500,000.

Now we must factor in the placement fees paid by the XYZ registry on various registrars. It costs to be on the front page of registrars. I will also put a modest figure here of $250,000. (I will not even get into the whole Network Solutions deal and its chances to be happening again in this particular promotion. But it could be happening somewhere else. See below.)

So that is a total of 1 million dollars spent by the XYZ registry so it can add 1 million registrations in a couple of days. (This number could easily go to 2 million or even higher. My numbers are very modest and factor in big discounts from the backend provider and the registrars.)

Maybe it is not that bad in terms of marketing. You get a lot of publicity, you pump the numbers and you hope that some suckers renew their domain names next year. Either because they are on auto-renew or because the registrants have no respect for their money.

In order for .xyz to make their money in 1 year back they need 1/3 of the 1 million domains to be renewed. (at $3,00 wholesale)

I am not sure what people expect from these 1 million domain names. Probably to win the lottery. Let’s just say that there were some .xyz domains worth registering for resale when .xyz was launched 2 years ago. How many domains do you think that are worth more than reg fee ($0.01) are left by now? 5? 10? Yes, people do like the lottery odds. Good luck with that.

Here are some other interesting ways to blow a million dollars in a day.

WEST.CN .XYZ Domain Name Renewal Deal

BTW, Daniel Degari, XYZ CEO, visited west.cn and discussed with West.cn ‘s CEO He Xiaojiang about .XYZ ‘s development in China. Discussion topics were about .XYZ ‘s MIIT approval, renewal fees and domain names misuse.20160527181500-1

.XYZ Registry explained that their renewal fee is the same internationally, and West.cn understands it. To maintain the leadership position in the New GTLD market, and to return the favor to the domain investors who have supported West.cn, West.cn ‘s CEO Mr. He decided to put in more than 10 million RMB to help the renewal fees.
The renewal help fund is over 10 million RMB, and it starts in mid-June. At the same time, .XYZ ‘s investors are going to get high rebate back from West.cn so that they can get very low renewal fees. After rebate, renewal fee is within 18 RMB. The period is until 2017 year end.

Is it really West.cn putting the 10 million RMB (1.5 million dollars) to support renewals at 18 RMB ($2.73)? Hhmmm… I bet XYZ has no comment on this deal but I am sure bet the other registrars would be really angry if they find out.

Sold.Domains

About Konstantinos Zournas

Konstantinos studied Computer Engineering and Computer Science in London and lives in Athens, Greece. He loves domains and building websites. He is online since 1995, learned about html in 1996 and got into domains in 2002. He started the OnlineDomain.com blog in 2012.

21 comments

  1. Domain Observer

    There is no difference in value between a crap COM and a crap XYZ domain. So why would one buy a crap COM domain for 8 dollars when they can buy a crap XYZ domain for 1 cent ?

    • Domain Observer

      And there have always been “SUCKERS” who buy crap COM domains. Another reason why Verisign is angry at XYZ.

    • There is no difference in a crap .com and a crap .xyz meaning both are worth 0.
      But the lottery odds are way better for .com domains than .xyz.

      The thing is you shouldn’t register crap domains anyway.

      • Domain Observer

        Yes, I agree. But the reality is there are always SUCKERS who buy craps in this world. What’s important is the REALITY.

  2. On a positive note, I like Negari’s fashionable shoes.

  3. “A penny saved is a penny earned” – Benjamin Franklin

  4. Patrick Hipskind

    All large companies got big by putting growth over profitability for the first three to five years. I like Daniel’s style. I think he is in it to win it.

    This .01 cent sale is the best way to get growth. You take a loss on the books for the first three to five years in exchange for growth.

    • Andrea Paladini

      Actually many start ups are still “putting growth over profitability for the first three to five years” and many of them are going bankrupt, others are going to fail soon, especially those without a sustainable competitive advantage, with no or poor business model … and when the current “cheap money party” and asset bubble will end the situation will even worsen …
      Some people never learn from history … and “those who fail to learn from history are doomed to repeat it” …

  5. .XYZ was offered below $1 for a long long time. Zillions of domainers picked over everything already. Most of what’s left was judged not worth $1.

    Meanwhile, all those sub-$1 domains are facing expiration. West.cn has roughly a 40% share of all .XYZ domains registered. And they clearly don’t expect all those bulk speculative .XYZ purchases to be renewed at full price – which is what, maybe, $8? They’re hopeful that they can squeeze some renewals out of customers at $2.73; and even there, many Chinese domainers won’t renew.

    So domainers are expected to go out and register domains that weren’t worth $1 before. Earlier (and presumably better) .XYZ domains are felt to be worth around $2.73 at best by the BIGGEST player in the .XYZ space. And domainers are supposed to ignore that “no confidence” vote and keep buying the inferior leftovers!

    Really this is all about inflating the registration numbers – as usual where .XYZ is concerned. It seems the .XYZ registry has only 1 sales pitch. Just look at today’s press release.

    Title:

    ” … the #1 New Domain”

    Opening sentence:

    “The World’s Most Popular New Domain …”

    .TOP was about to pass .XYZ. .VIP had a more successful launch than .XYZ, and .VIP charged full price, whereas .XYZ stuffed domains into customers’ accounts without their knowledge!

    Naturally the .XYZ registry wants to inflate their numbers. Otherwise they lose their whole silly sales pitch!

    By participating in these penny registrations, domainers simply enable the registry to continue to make misleading claims, which will dupe more domainers and (now and then) the general public. Domainers are allowing themselves to be USED as a prop to – let’s be honest – deceive other people.

    • West.cn has 1.1 million .xyz domains.
      1.1 million domains at $2.73 is 3 million USD.
      Why renew domains that you can’t even resell for $2 or $3?
      Especially if you can drop them and register them again at $0.01!

  6. Patrick Hipskind

    I kindly ask Konstantinos to let me list a few domain names to make a point — Daniel left plenty of meat on the bone especially for a penny per domain.

    I registered FootballJersey.xyz, Disposals.xyz, GolfClothes.xyz,, MensApparel.xyz, Parachutes.xyz, etc..

    If you search by hand rather than using a list you can find some good domain names. So as a domain name investor I am supposed to pass these names up for a penny?? Really??? If I don’t sell anything by next year to cover renewals I can drop them, then Daniel takes the loss and I don’t.

    • @Patrick Hipskind,

      Keep in mind, nobody registered those for $1 during the past 2 years. So the odds of a passive sale at some higher price aren’t high.

      Meanwhile, the same strings will be available in numerous other nTLDs – which all have fewer registrations and, hence, more availability than .XYZ. In order to pay a higher price for .XYZ, end users would have to walk past other $1 and $10 options.

      Time is worth money too. Finding domains to register is work. Identifying potential buyers is work. Making a sales pitch is work. If it’s worthwhile for you to spend your time on FootballJersey.xyz, go ahead and try.

      But a domainer’s cost is NEVER a penny. We all must place some value on our time. All of us can imagine crappy domains that we wouldn’t want to bother managing even if they were free. Everybody has their own too-tedious-and-insignificant-to-bother-with threshold, just as everybody has their own taste in domains.

    • Yes, please drop them. 2 word new gtlds are a big no-no unless of creditcard caliber. There is a reason all these were not registered. You are registering them just to have inventory.

  7. If they take a loss on every $0.01 registration, how many promo registrations does it take to bankrupt the registry?

  8. The new gTLDs ownners are pretty much like gambling addicts, they keep throwing money at it hoping a win may come, when the odds of a win are almost nil.

  9. Hello Konstantino,

    The new TLDs in our opinion lose all credibility as an effective Online Marketing Strategy. Why? SIMPLE = ( .COM Subdomain creation completely nullifies the whole new TLD reason for existence.)

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) https://www.UseBiz.com

  10. Andrea Paladini

    Kostas,
    Well, I was sure they had some sort of “under the table” agreement also with West.cn.
    As I wrote in some of my previous comments, they are replicating those hidden agreement all over, trying to make huge registration numbers because they know renewal rates will be very low …
    That’s a very weak business model, based on deception as key marketing tool …

    The whole xyz thing is a castle of cards which soon will collapse …
    “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.”

  11. Many people I know took the opportunity to use xyz domains for phising or scam emails. xyz will always have “promos”. this is the cheapest and easiest way to obtain domains for this purpose.

  12. I know this is an epic “bump” to old news, but .XYZ is at it again. They are officially giving out free domain registration with a coupon. 1 cent registrations, free domains… and then they wonder why their rep has tanked and search engines authority undermined by all the spam.

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