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.KIWI, a new domain extension aimed at the New Zealand market, has experienced tremendous registration growth the past two weeks.

.KIWI has gained 170,000+ domain registrations according to NtldStats and NameStat, websites that track new domains. As of this writing there are 187,225 .KIWI domains registered. This now puts the .KIWI domain 22nd in terms of domain registration volume on NtldStats.

.KIWI Domains Graph

These are impressive registration numbers for a domain I’m fairly sure few people know about. I am doubtful many Kiwis, a term for people from New Zealand, even know about .KIWI domains. This is who .KIWI was introduced for in the first place.

The main domain extension that people use in New Zealand is .NZ and more specifically .CO.NZ domains. According to the Domain Name Commission, the governing body for .NZ domains, there are 668,000 .NZ domains across the entire .NZ domain space. A good amount of domains for a country that has only roughly 4.4 million Kiwi residents.

With 170,000 .KIWI domain registrations in two weeks, does this mean that a bunch of Kiwis see the benefits of .KIWI domains? Extremely unlikely, what is more likely….

Domain Zone Stuffing

Okay, let’s be honest. You don’t get 170,000+ new domain registration magically out of thin air. While it would be nice to root for the new upstart domain extensions the reality is we have seen this play many times before. New domain registries claim success by jacking up domain registration numbers and stuffing the zone file.

.XYZ has done this many times and even given free domains. .XYZ ran a deal with Network Solutions where they gave customers free .XYZ domains that matched the .COM domain in their account. The .XYZ registry also ran a promotion in the summer where they sold .XYZ domains for 1-2 cents. Currently they have the most domains with 6+ million .XYZ domains registered.

Odd thing though is searching I can’t find any registration deals for .KIWI domains that occurred in the past 2 weeks. Is this a similar move like the .XYZ and Network Solutions deal?

There are only two domain registrars that have the bulk of .KIWI domain registration. They are Tucows, which resells domains through it’s OpenSRS platform and runs the domain registrar Hover. Tucows has 104,297 .KIWI domains under management.

Then there is Web Drive Ltd. which operated as DomainAgent.co.nz a reseller for .NZ domain names. There isn’t much info about the company but they seem to specialize in reselling .NZ domains to registrars. They are a business to business domain registrar platform. This makes me wonder if DomainAgent.co.nz and Tucows gave registrars .KIWI domains free to match whatever domain they currently own. Or did domain reseller partners actually sell these .KIWI domains?

Currently it’s really unclear. Before this domain registration spike the .KIWI domain was stagnate at around 10,000 domains. So they needed to do something. I have never seen a .KIWI domain in a search result, but zone stuffing a bunch of domains that people are not using.

Most people wonder, “Why would you want to have a ton of domains that are’nt in use?” Simple, this enables the new domain company to claim success and show-up on the domain registration leadeerboards on sites like NtldStats and NameStat. .KIWI is 22nd on NtldStats board right now and 19 on NameStat for domain registration volume. Great for recognition and and getting the world out there about you new domain. It’s a simple marketing really.

Like all domain registries, .KIWI has over 1 year to figure it out. We all know the domain drops don’t happen on expiration but take a few months after that. So they try to get ahead of these drops by re-running deals. Eventually this will catch-up to new domains though.

What are your thoughts about 170,000 .KIWI domains being registered in two weeks? Can this be legitimate domain registrations or is the .KIWI registry doing a classic new domain play?

Are you a Kiwi? Do you think .KIWI domains will ever be as widely used as .NZ domains ?

This is a guest article contributed by Adam. Adam is a domain name broker and founder of YamadaMedia.


gears and sprocketsOccasionally I become interested in a new technology that is just beginning to bud, and if it sounds promising, like others I may take a gamble on registering some domains within that field in the hope the technology eventually goes mainstream.

Each year as the domains come up for renewal I spend some time reviewing the technology, through searching Google News, Google Trends, Google Keyword Tool, and some other tools to attempt to gauge how the field is evolving and whether the investment will prove out, i.e. – whether to hold or dump.

I don’t have too many of these types relative to the size of my portfolio, but I am reviewing one such set now that is coming due for renewal.  Since 2012 when I first registered the names, I have spent approximately $560 over the past 4 years in registration and renewals to maintain the names.

Although each year I evaluate the technology, it seems to be slowly gaining momentum, it is yet to go mainstream and it may well be another four years before it does, if it all.  That is always the gamble.

Assuming it did, in another four years, that would mean perhaps another $500 invested, or a total of $1k, which then again, if it does not and fails to take off, I will still be left asking the same questions and running the same evaluation in four years time, and trying to ascertain whether there is still prudence in renewing or whether I am throwing good money after bad.  With the $1k I might presumably have laid out over that 8 years, I might have instead purchased a more premium .com domain or spent it on 5 to 10 valuable backorders that would have been more likely to return an investment.

Again, the new-tech holdings are a small fraction of my portfolio, so in once sense I see it as a sort of diversification, or at the least, its throwing a little bit of money down on a risky bet on the chance of a big reward … which is not guaranteed.

This is naked speculation for sure.

At this stage, to renew what I currently have I would need to stick about 15% back on top of the $560 already invested.  In some sense I tend to view this similar to pot odds in a hand of poker, except I don’t know the exact odds of making the hand (or, the odds the technology will actually emerge to make the names profitable), however I only know that the amount to add to the pot to stay in the hand is small relative to the size of the pot already, making it seem on the surface like a small decision.  Still, in some sense it is only myself I am playing against, and comes back to that question of whether or not I am throwing good money after bad.

Have you ever bought into a tranche of new-tech domains – names related to a not-yet well known field or technology that you hope will one day become widely used – and if so, what criteria do you use to evaluate how long to hold those names or how long to follow the technology before it seems like throwing in the towel and shifting that money to smarter investments seems warranted.

If you have anything constructive to add please share your thoughts, stories or feedback in the comments.  Thanks for reading.

It is an undisputed fact to anyone involved in the domain name aftermarket that a significant upswing in overall pricing trends of certain categories of domain, namely short 2 and 3 character .com as well as strong one-word .com, have been realized over the past year due to a strong influx of Chinese buyers into the market.

Writer and financial strategist Simon Black of SovereignMan.com today speculated in a blog post that a driving factor behind this influx is the Chinese Government’s increasingly tightened capital control policies amidst a flagging economic outlook and flailing stock market.  I say ‘speculate’ as I don’t know that there is any consensus as to the overall motivations of individual Chinese buyers.

However the supposition – that Chinese buyers are buying expensive domains as a way to get their savings offshore –  does not seem completely unfounded.   Mr Black explains:

Chinese citizens now have strict limitations on the amount of money they can withdraw while traveling abroad, plus restrictions on how much money they can transfer overseas.

But for any Chinese citizen with savings right now, it’s pretty obvious what’s happening. And they want to get their money out of the country.

But it raises a difficult question– how do you get money out of the country when the government has imposed strict capital controls?

With a little creativity, there’s always a way.

Bitcoin has been a popular alternative in China because people can easily cross borders with vast sums of money encrypted inside their mobile phones.

But there’s a new tactic that Chinese are using now: domains.

Yes, those domains. As in Internet “.com” domains.

I believe though that Mr. Black falls short on a few key points within this claim.  He continues:

But… Chinese aren’t looking to make money. They’re not buying domains as investments– they’re using domains to TRANSPORT money.

Think about it– if you have $50,000 that you really need to get out of China, you can buy an expensive domain today.

Naturally there are no restrictions (for now) on buying a .com domain. So the sale goes through without any problems.

But domains are international. Almost anyone in the world can buy or sell a .com domain.

So later, you travel overseas, open a foreign bank account, then sell your domain to someone else.

The proceeds of that sale get paid to your new bank account abroad. And, presto! You’ve just moved a lot of money overseas, completely circumventing capital controls.

Naturally there are some costs involved, including some brokerage fees for buying/selling the domain.

But for Chinese citizens whose alternative is to let their savings remain trapped within a failing system, they’ll gladly pay a few percent to move their money abroad.

You can read the full article here.

First, nearly anyone with an active involvement in the domain aftermarket can tell you that there is no such thing as “presto!” when it comes to buying and selling domains, unless you are able to make a killing on the buy side, meaning, that you purchase a domain at a price that is well undervalued.

Otherwise, domain names are not a very liquid asset.  That being said, premium domain names, and short, 2 and 3 character domains of which the Chinese are very active buyers, certainly have much more liquidity than the average domain.  However, more is a relative term, and we must bare in mind that these buyers are now buying at the top of the market.  The price of 2 and 3 (and even 4) character domains have never been so high.

If Mr. Black were more acquainted with the domain market, he would know that buyers today are paying in some cases nearly triple the value for some domains than they would have sold for a year or so ago.

Therefore, while flight from capital controls seams like a very plausible motivation for the upsurge in activity from China, it would demonstrably not be such a simple matter of using domain names to transport wealth as is being claimed, in as far as since the Chinese are the ones driving up the prices it remains to be seen how they would easily unlock an equal value of their investments by reselling to overseas buyers who are not subject to the same forces.

A second point to note is that typical brokerage fees in the domain industry are not on the order of “a few percentage points” but rather will range easily from 10% – 20%, thus also negating the idea that it will be easy to unlock anywhere near full value, as in addition to buying in at peak pricing (although, who really knows if this is the top of the top), it presents the added difficulty of having to sell a domain name yourself if you want to avoid having 10% – 20% skimmed off of your investment by brokerage fees.  Brokers add liquidity, thus doing without them can also decrease the liquidity of the asset.

This analysis is not meant to trash Simon Black, as I am in fact someone in agreement with much of what he writes on and I would encourage anyone to research his blog further for alternative viewpoints to financial planning and economic freedom.  However I feel that in this particular case Mr. Black, while presenting a reasonably sound hypothesis, is not familiar enough with certain nuances of the domain aftermarket to really say for sure whether flight from capital controls is a valid motivating factor for Chinese buyers of domain names.  It may well be one among many motivating factors, but I am inclined to say there must be others, and that it may not even be the strongest factor.

What do you think?

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