Bitcoin, GDPR, Chinese Economy, New gTLDs: Giuseppe Graziano Discusses From An Investors' Perspective

Posted in: Domain Names at 02/02/2019 00:02

The domain name investor side of the industry is the focus of today’s Domain Pulse Q&A where Giuseppe Graziano gives his views on the year just gone, the year ahead, GDPR and the relevance of domain names. On 2018, Graziano says the EU’s GDPR had less impact than expected, but overall for investors its impact was slightly negative, while bitcoin is starting to impact on investors. For Graziano’s GGRG, 2018 was a “transition year” with some high value transactions. Looking ahead, a slowdown in the Chinese economy might bring some challenges and a likely consolidation of investors. On new gTLDs, Graziano says they’ve achieved their goal of “more options” but a result has also been “second tier domains have lost most of their value because end users have more options available”.

Graziano’s GGRG also publishes a quarterly LXDO report (available for download from their site) that focusses on the 614,928 short and numeric .com domains defined as “liquid”. GGRG has won the prestigious Escrow.com “Master of Domains” award as one of the top 3 grossing brokers in the world.

Domain Pulse: What were the highlights, lowlights and challenges of 2018 in the domain name industry for you?

Giuseppe Graziano: At the risk of it sounding like a cliché, 2018 was an “interesting” year. The major events which affected the domain industry were: 1) the GDPR coming into effect 2) the petition to stop the increase in prices for .com domains and finally, 3) the bitcoin roller-coaster which indirectly affected the secondary market. This is because many domain investors had invested in cryptocurrencies, but also because blockchain companies had effectively become the largest spenders in high-value domains.

For GGRG.com it has been a transition year. We completed high-value transactions both in the six and seven digits, a record number of 3 letters .com transactions and we also launched LXME.com, our automated brokerage platform dedicated to the buyers and sellers of 3 letter .com domains (stay tuned for updates).

DP: GDPR – good, bad and/or indifferent to you and the wider industry and why?

GG: The GDPR has had a slightly negative impact on the aftermarket, mostly because of the uncertainty it generated. If the contacts of a domain owner are masked, there is an additional layer of friction, which means fewer transactions. This obviously it is not good. This being said, the GDPR has had a less negative effect than forecasted.

DP: What are you looking forward to in 2019?

GG: Traveling to reconnect with clients and industry friends! We also look forward to expanding our offer with LXME.com, so we can help even more customers create immediate liquidity for their domains and, in the process, making the domain aftermarket more efficient.

DP: What challenges and opportunities do you see for the year ahead?

GG: A slowdown of the world economy, starting in China, might bring challenges as we are going to see fewer transactions both in the primary and secondary market. We will also continue to see more consolidation, with marginal players being bought or squeezed out of the market, and more and more investors quitting the game. Overall, the domain industry has become a lot more competitive and there is a higher barrier to entry for whoever wants to join both as an investor, or service provider.

On the other hand, this consolidation is an opportunity for all the companies and individuals who shine to do even better and capture additional market share.

DP: 2019 will mark 5 years since the first new gTLDs came online. How do you view them now?

GG: The purpose of the new gTLD program was to give more options to companies and individuals wanting to go on the web. They accomplished that goal. Companies are successfully using new gTLDs domains to launch new products or services. However, the new extensions also increased the supply available, which means that second tier domains have lost most of their value because end users have more options available to them.

DP: Are domain names as relevant now for consumers – business, government and individuals – as they have been in the past?

GG: They are. The number of domains registered is steadily growing. What is changing is their aftermarket value. Domains have evolved from a way to be found online, to traffic machines, to SEO boosters, to storage of value during the Chinese boom, to pure brands. Throughout 3 decades, they have always stayed relevant.

Previous Q&As in this series were with EURid, manager of the .eu top level domain (available here), with Katrin Ohlmer, CEO and founder of DOTZON GmbH (here), Afilias’ Roland LaPlante (here), DotBERLIN’s Dirk Krischenowski (here), DENIC (here) Internet.bs’ Marc McCutcheon (here), nic.at’s Richard Wein (here), Neustar’s George Pongas (here), CentralNic’s Ben Crawford (here), CIRA’s David Fowler (here) and Jovenet Consulting’s Jean Guillon (here).

If you’d like to participate in this Domain Pulse series with industry figures, please contact David Goldstein at Domain Pulse by email to david[at]goldsteinreport.com.


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