Stock site SeekingAlpha.com just published a blog post entitled New gTLD’s Pose No Threat To Verisign.
Verisign (VRSN) is the registry for the .com and .net registry
The author of the post is stock analyst Zeus Kerravala, is the founder and principal analyst with ZK Research. Prior to ZK Research, Zeus Kerravala spent 10 years as an analyst at Yankee Group.
Here is part of his post which should brighten the new year for all .com investors:
“”I’ve seen a number of news stories over the past few months that speculate that .com registrations are on the decline and the industry will see a shift away from the traditional “.com” to both country code registrations such as .ca (Canada), .uk (United Kingdom) and .cn (China) as well as a number of new generic top level domain names (gTLDs). ”
“The new gTLDs are currently in the process of being handed out and we should expect to see anywhere from 300-1000 new gTLDs each year for the next few years.”
“If the above is true, then that would certainly be a negative trend for VeriSign (VRSN), the company that handles 100% of the .com and .net registrations.”
“The bear case on VeriSign is that the addition of the new gTLDs each year combined with the perceived scarcity of .com’s means new registrations may move away from .com to one of the new gTLDs such as .travel, .web or .car. Alternatively a company may choose to register its own gTLD such as truck.chevy and car.chevy for their different products.”
“However, I believe that the alternative top-level domain names will augment the web strategy of companies, not replace the interest in .com. ”
“The fact is that almost all organizations want a .com web address to legitimize their business. ”
“While it’s true that all of the short .com domain names have been taken up, there are plenty of opportunities for companies to use longer names with a little creativity. ”
“One strategy a company could take is to find a valid URL and then name the company based on that.
“As a small business owner, I wanted to have my own .com so I tried various other domain names before I settled on ZKResearch.com.”
“The domain name was actually part of my thought process when I started the company up.”
Now don’t get me wrong, I do believe that the new gTLDs will attract companies and we’ll see things like “mikes.pizza” or “chevy.cars” but I also think these organizations will invest in traditional .com domain names.
To me, the market for registrations of .otherstuff only is more for niche use cases such as a small organization or private use cases, like a family or club.
Any company that wants to have a public presence on the Internet can still use an alternative but should still have a viable .com.”
For VeriSign, I really don’t see the revenue stream associated with .com registration being threatened at all and the new top level domain names will create a new, albeit initially small revenue stream.”
I just wouldn’t want to be on the side of the equation that has to attempt to change consumer behavior.
The gTLD’s know they have an uphill battle — they have to change the mindset that .com = trust, confidence, authority etc.
Over time, and collectively, they may be able to put a dent in .com’s leadership.
We all need to think like the average consumer, who has NO IDEA all of the gTLD’s are coming.
I’d bet that 98 out of 100 people (not tied to our industry) have no idea this new flood of extensions is coming. The gTLD’s have A LOT of marketing to do — and they know that.
It will be interesting to see it unfold.
I see Kerravala.com being available to hand register.
I can compare new gtlds with web.com and wix.com.
If you don’t know what a domain is and you want a website you would register something like TheDomains.web.com and TheDomains.wix.com.
Same for Tumblr.
People will go on web or wix to build a free website. They will see yourname.yourtld and they will link it to their site.
How I know? The first domain I’ve registered was from FreeWebs.com (now called web.com). I needed a domain cause I wanted to be more professional with a .com. I end up with a bad .com. Same thing will happen with new GTLDs.
This Holiday, I told my family how I make money as a domainer. Everyone was asking what is .co and they don’t even know .biz and .info. What they know is : .com .net .org .ca .fr .us.
They trust .com and they think the new gtlds will confused the world.
I hope Zeus is right. He makes a rational argument for what will likely happen, but there will be a few surprises.
I think that with all of the negativity, lack of need and lack of public knowledge regarding the gTLDs, consumers with find them hard to remember, won’t be bothered trying to remember them and will still therefore continue to use familiar sites.
Except that Verisign is just a .com/.net manager by contract, and not an owner of the .com/.net TLDs. On the other hand, all gTLD registries operate in full ownership of the gTLD they are managing.
What does that mean?
It means that Verisign is at risk of severely underestimating the sheer amount of dollars backing up the expansion of the Internet lanes. Not to mention, that contracts can be revoked or allocated to other, potentially more capable registry outfits.
Looks like Zeus is falling victim to hubris that was punishable by the Olympian gods of Greece!
@David – The only negativity I’m seeing is among domainers, a small, niche market of professionals. Nobody knew of .com and domains before it actually became the de facto destination, and that took at least a couple of years during the Internet’s commercial growth.
R. E. = ” The only negativity I’m seeing is among domainers, a small, niche market of professionals. ”
There are many gTLD advocates versions of the definition of Domainers.
The real definition is = Anyone who monetizes revenues in Cyberspace. PERIOD !
All others are mostly B.S.
Real Domainers = Google.com , GM.com ,IBM.com , Microsoft.com, Salesforce.com , Techcrunch.com, USPS.com , Linkedin.com , Oracle.com, Yahoo.com,
And on and on.
Are you all getting the picture now?
If you aren’t, hire an interpretor.
P. S. The gTLD experiment will continue to meet backlash competition from the .COM Franchise members, not just a small pocket of professionals, but actually the backbone of the Internet as we know it.
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
Let’s take Verisign actions as their measure of .com threat level.
During application, Verisign applied to 12 transliterations of .com/.net into IDNs, so they felt a threat there. They also applied to .verisign brand TLD and to .comsec, which seems to be their version of .secure, more of a product opportunity than a threat.
During objection period, they made string confusion objections against .bom, .cam, .company, .dtv, .nec, .ecom, .itv, .mnet, .nec, .new, .network, .pet, .tvs, and .vet, curiously forgetting to object to .mom (or maybe somebody’s mom forbid them to). Some of those make sense, but most of them are threats they perceived after reveal day.
Actions speak louder than words, IMHO.
@Jeff – Domainers are those who register domains to resell for profit, or park them to reap revenue from clicks. Those that you listed as ‘domainers’ are businesses with an online focus or presence.
I Googled “interpretor” and it produced a typo, so I’m not sure what ganja you’re on, based on your constant copy/paste drivel. Try moving to Colorado, it’s now legal there, I hear.
LOL what a wackjob, seriously. i really hope this Jeff thing is just a character somebody is playing… he clearly doesnt know anything about domains or domainers.
why would someone continue the post when its obviously the case? nothing being said makes any sense, its all random words
obsessive compulsive disorder. i mean really, signing every post “Metal Tiger” is over the top and one of the dead giveaways that it isnt even a real person. someone created a weird over-the-top .COM character when they heard the gTLD’s were coming out, right?
its a parody, right?
Rubens
And of course Verisign spearheaded the collision issue and told ICANN the system would break if so many new gTLD were delegated to the root
@ ACRO,
Here is our response to one of your statements that never seemed to be allowed on your blog.
R. E. = ” The truth is, that nobody can predict 100% of something, all the time, but some will be able to predict 100% of it, half the time. ”
We can guarantee the already decisive Strategic advantage of the .COMs Traffic Patterns will expand, exponentially with the gTLD introduction.
Because of the gTLDs being marketed, People are really focused on the differences and are really kicking the tires of the .COM Franchise Business Model.
The Strategic .COM Business Model is a many faceted Gem. Once all the smart money Capital Markets Experts, realize all the angles, their vision will become very clear. Their vision coming into focus,will push valuations to levels only Rick Schwartz and Frank Schilling,and you Michael, forsaw many years ago.
P. S. The Investors Business daily( Institutional Capital Markets Experts) are listening in and many of their subscribers, are positioning themselves.
Gratefully, Jeff schneider (Contact Group) (Metal Tiger)
Jeff
You do know that Google was one of the largest applicants for new gTLD originally applying for over 100
Microsoft also applied for around 10
As long as the ccTLD/com pairing effect remains constant, then Verisign should be OK. However once the ccTLD becomes dominant and the .com legacy in a particular market, the numbers of new ccTLD registrations outstrips .com registrations. At the moment, the US market is the engine of .com TLD in the same way that German registrations are the engine of .eu ccTLD. In 2013, German registrations in .eu started falling and growth in the ccTLD (well it never really was a true country code TLD) stalled. The .eu ccTLD is a pseudo-ccTLD that has massive competition from the real EU ccTLDs and it rarely occupies more than 5% of the domain market in these countries (the ccTLD/com axis occupying over 80% of the market in these countries). The problem for .com TLD is that it faces growing competition from ccTLDs and a kind of competition from new gTLDs in its core US market. Despite the millions of dollars being thrown into marketing, it will be difficult to shift usage patterns and public recognition of .com TLD. The key thing to watch with a lot of new gTLDs will be their burn rates. Can they sustain a two year marketing campaign or even a five year campaign? With a few of them, if they don’t gain substantial public recognition and registration volume in the first six months (the typical Land Rush period of a new TLD), then they will be condemned to a .pro or .tel or .xxx like existence. Even for what seem like sure things (the city gTLDs), it will be a hard battle and many domainers are going to lose money by applying .com rules to what are ccTLDs in all but name). Verisign might do well enough in the next two years but .net is moving towards being a legacy TLD and it might encourage Verisign to focus on a “Dot What? DotCom!” kind of knocking copy marketing to capitalise on public confusion over the new gTLDs.