After years of debating the topic of how successful the new gTLD program will be and what the effect of new gTLD’s will have on the value of existing extensions including .com.
Mostly every post has wound up with people arguing whether .com’s will win or the new gTLD’s will win.
Other including myself has voiced the opinion that many new gTLD’s can become quite profitable without any hugely negative effect on the value of existing domain extensions.
One possible outcome that I haven’t heard expressed anywhere before that everyone loses.
New gTLD operators, current registries like Verisign and domain investors could all wind up losing.
How?
We know there will new gTLD’s that will not be profitable businesses.
What if virtually none of the new gTLD become highly profitable?
Many maybe come marginally profitable businesses but not home runs considering the years and dollars invested.
New gTLD’s are going to have to measure profitability in light of including all costs, from application fees, travel to ICANN meetings for many years, to startup costs, operational costs including employees and marketing and the cost of obtaining the best of the new gTLD’s in contention that will be settled in private or ICANN last resort auctions.
I’m sure there will be a few BIG winner but what if there are a lot of losers and most wind up just doing OK, including the big portfolio players?
The won’t be in danger of going out of business, but they might not make the kind of returns they promised their investors or projected for themselves.
There are 265 million domain names registered and if every new gTLD hit their projected mark the domain space would have to double in the next year.
Maybe more than double.
Broker Ryan Colby in a post he wrote on his blog in November said in part:
“‘
The adoption of lean startup methodologies and the constant focus on “disruptive” innovation by CEO’s will continue to place pressure on the value of premium generic .com domains. While branding will remain an important fundamental for businesses, how one goes about developing that brand will change when there is an abundance of choices. This is simple economics, and the ROI for large capital investments continuing to flow into the monopoly of the .com string is becoming harder than ever to justify. The plethora of new gTLD’s will create millions of new marketing combinations available to saavy marketers.
As a premium domain broker I speak with “c” level executives on a daily basis and this is a clear trend. Marketing executives are being forced to “quantify” their branding investments like never before. While .com’s are still the string of choice and will most likely remain the preferred extension for a number of years, they are beginning to price themselves out of the market in light of these upcoming changes. The long held historical assumption that a one word generic .com domain is “better” and “worth the price” is now being challenged. This is especially true in light of how Google has been beating up exact match domains over the last few years.
Average sales prices for reported premium .com domains today compared to 3 years ago are substantially lower, and I would argue that they will continue to drop in the future. At Outcome Brokerage, we see a large increase in overall sales volume coupled with a decrease in average sales prices. Business is healthy, but it’s becoming clear that the culture of digital business is changing. And with that change will come lots of criticism before mass adoption and acceptance. It’s an exciting time to be a domain broker, and you may see more specialists entering the industry to help service niche categories.”
So if he is right the new gTLD’s will create enough consumer choice that values of existing domains, including .com will fall.
If consumers choice a new gTLD over an existing TLD Verisign may see the numbers of .com registration start to fall.
However each new gTLD may not get enough of the market share to be wildly successful.
I just maybe the sheer number of new extension that as a group give consumers enough choice that existing domain owners will have to lower there prices to get sales.
Mediapost.com published a post today on “The Top Online Brand Protection Strategies For 2014” and the new gTLD took center stage:
“Whether new generic top-level domains (gTLDs) represent new prospects for your business or another front to defend, every brand needs a strategy to address them.
As hundreds of new gTLDs come onto the market, this is the time to decide whether to register, block or police your brands in the new registries. Work with your colleagues in legal and risk management, balancing risks, opportunities and budget constraints to develop your strategy.
With 600+ gTLDs expected to launch over the next three years, no company can afford to register every key brand term in every new extension.
Most companies will need to rethink their approach to brand protection, shifting from a strategy based upon traditional defensive domain registrations to one that monitors the expanded Internet namespace for brand abuse.””
SO what if MediaPost.com is right and the new gTLD’s become the tipping post for brand holders and they change from a defensive registration mode to a enforcement mode?
You might see a ton of typo’s and defensive registered .com drop.
Many new gTLD operators are planning on the brands coming to play but what if by in large they don’t show up?
Lack of defensive registration would be a huge loss of revenue that new gTLD operators were counting on.
It could cost existing extension the loss of millions of registrations if brands go from a defensive registration strategy to a enforcement strategy.
So it could be that the new gTLD program winds up with everyone in the space losing.
Except for the registrars.
The competition is with business models. The calculus behind Google’s customer lifetime value (LTV) is vastly different from a typical registry. Business models funded on short-term P&L performance will lose to business models funded on long-term LTV.
As I said late last year: Your killer generic .com might now have a capped worth: http://acro.net/blog/business/your-killer-generic-com-domain-might-now-have-a-capped-worth/
Clearly, the new gTLD program won’t generate billions overnight, but it’s disruptive enough to widen the Internet lanes to the point of diluting the expected sales price of otherwise unbeatable domain assets. In other words, while the .com retains its #1 position, it will also lose its god-like exuberance, faster than before.
The solution to this problem is obvious: domain business becomes more about developing brands and businesses and less about parking and flipping domains.
Lots of BIG ???’s… What is I build my company on a new gtld, and it goes under???
We all majority of niche gtld’s have only a limited amount of mentionable terms… Domainers are not going to pile on at $25-35 per year, and hold brandable terms in obscure extensions, another dilemma.
From the looks of the premium pre sales numbers, these guys are getting desperate, and the coming marketing in the next few weeks will show just how desperate they are.
Average Joe is more concerned about Monday night football, and poker night than registering another dog gone extortion type domain name… Most businesses just don’t need it.
Many went through and still in a global sense are still going through corporate inertia. Brand protection is B. S. discussed by the same bunch that were originally immersed in inertia. The value that the very best generic root domains bring (I cannot afford) are those that continue the Google mantra of no evil and develop informative, authoritative websites specific to the root domain name url that carry the brand that serves (persists) the common elements of the brand. The linguistics in whatever medium do not change. (in your lifetime)
My opinion ,for what it is worth, is that the new TLD’s will cause many many more UDRP’s , and litigation generally, where companies/persons who have purchased say example.newtld will then realise a lot of emails and traffic are going to example.(com) and will then sue to try and get the .com OR more likely issue a UDRP . Say 1 year or so after starting their business with new tld they will get a TM for the name and then seek to enforce that.
Hey, it is your money, go spend the way you want it.
Interesting point Mike. I’m inclined to think that the laws of supply and demand will indeed cause an effective fall across the board. As someone heavily personally invested in .com I hope they continue to be the defacto “gold standard” as we know today, but it will only take something like .web to heavily take off and become more prominent in the public perception to change that. Maybe also the next breakthrough startup (aka next Facebook) will be on a .whatever, that could change people’s understanding overnight.
As someone who develops his domains, JohnUK’s point is particularly pertinent and of greater consideration and I’d like to see more thought leadership in the community regarding that – particularly if a EMD.whatever brings previously unforeseen issues. i.e. we all know how difficult or even impossible it is to trademark generic domains today, what it a user successfully trademarks a generic.whatever successfully restricting all other derivatives or effectively rendering them worthless because the USPTO or a global equivalent perceives the potential for confusion to be high?
@Shark “…i.e. we all know how difficult or even impossible it is to trademark generic domains today…” . End Quote. Why does it have to be USPTO trade mark ? Surely any trade mark from any Country would make it impossible for new tld’s ?.
I don’t see a big market for new TLDs
To paraphrase the musing of the Domain King.
Where is the consumer in your analysis?
Where is the behavior analysis?
Where is the discussion of ‘need’, ‘want’ & ‘desire’ in your analysis?
There is no doubt that there is way too much supply and little demand right now. Businesses are overwhelmed with the brand protection issue, so I will agree with Johnuk that where we will see most growth is in the UDRPs.
No one here has considered the impact that the dot brands will have on the adoption in the public. I believe that brands will be a huge help to promoting the gTLDs. New businesses will consider .com as only one of many alternatives when going for a domain name and at that time it will probably look like a dinosaur in comparison to more fresh and descriptive choices
@ Christopher Hofman Laursen
But what about the confusion factor? How will someone know what goes to the right of the dot? There is no universality. There is no grammar? All I see is alotta confusion.
Paraphrasing the DomainKing whom I fully agree with.
The best “new domains” are already here: .Net .Org .Biz .Mobi .Info .XXX .Jobs .Travel .CO .ME .TV.
What remains are the ideas discarded in the first TLD rounds. And nearly all (non-geo) the top remaining possibilities will probably be gathered up by Amazon and Google, who can win any auction they choose.
Mike, what are your insights on how Google and Amazon will effect all this? The assumption on all the blogs is that registry owners are start-ups and will need quick profits to keep going. This certainly is not the case with A and G. I suspect they want to warehouse their extensions for their exclusive corporate use, if they can get away with it.
I’m starting to see the new TLDs as a non-issue.
Matt, many of these gTLDs will not survive, and it’s clear that the confusion factor is a negative sales argument for both gTLDs involved.
TLDs in a well defined niche where members understand digital has a chance. Furthermore the registry needs to have a strong organisation and a great marketing plan. Examples coming to mind are many of the dot city domains, and clear niches like .golf or .blog
Call Nate Silver @fivethirtyeight Let Nate “the Great” crunch the data
Accent
Keep in mind that Amazon applied to operate almost all their closed generic new gTLD’s on a closed basis and were forced to open it by the GAC
So Amazon’s plan’s for its new gTLD was apparently to give them to customers to enhance their other products and services.
Google is the wild card
It would shock me if at least some of Google new gTLD’s were not offered for free, part of an overall service plan with adwords, adsense the old double click business, gmail, android phones, Moto phones.
How many people are confused with the gTLD’ ? My Opion “There is nothing like a Dot com”
Michael you forgot another sure winner. ICANN, that is burning all the new(and old) TLD money on salaries, bonuses, hotels and vacations.
Also Google has been charging for “premium”(that used to be free) services lately. And free domains will cost google.
@Mike: “Amazon’s plan’s for its new gTLD was apparently to give them to customers”
I assume you mean sellers who use the Amazon platform? Perhaps, but the number of Amazon vendors is not all that large, and subdomains would do pretty much the same thing.
Either company could give domains free with included advertising, but .Infos are a dollar, .TK and Facebook are free. Hard to see how it would be worth the trouble for more than a few extensions. Running standard registrys also seems to be too small a game to interest them. The only business plan that makes any sense to me is long – term control of key sectors of the internet namespace. And for that they cannot allow outsiders to have defensible rights.
As you pointed out elsewhere, they can price their domains high enough to keep everyone out. I expect there are other loopholes. Or they could simply never get around to releasing them. After RegisterFly I would not expect ICANN to do anything about it, as long as the checks keep coming.
It looks to me that quite a large portion of the top 50 extensions could be private, in fact if not in name. And remember how quickly popularity diminished on the 1 & 1 pre-sale chart.
”
What is I build my company on a new gtld, and it goes under???
”
Does anyone know if .me is a safe domain name to register for a business or is it privately operated?
@Shelley
.me is the ccTLD for Montenegro. .me would cease to exist if Montenegro the country stopped existing and even then it could still be saved by ICANN. The old Soviet Union .su ccTLD is still operational. (.yu is not)
And the new TLDs are safe. ICANN has provisions about “failed” TLDs.
There could be a thousand new Cola brands brought on to the market this year, and Coca-Cola would remain #1. Because of this, I agree with others that it’s likely that we’ll see many more UDRPs as a result of people with gTLDs coming to realize this little truism.
Time to create ‘real’ websites and trademark your best names if you haven’t done so already. Otherwise someone with a gTLD will surely try and do what you haven’t.
.yu
it was a good TLD as short form for .YOU, like (e.g.) for sites like see.yu or deals4.yu etc.
however, a few new TLDs (and just FEW of them) are interesting, like .NYC and .MAIL
strange no one has applied for new numbers-only TLDs like .123 .555 .666 to have sites like EasyAs.123 or IC.555 (a popular chip for oscillators) or Devil.666 🙂
@StartYourSmall.Biz
Re: deals4.yu, EasyAs.123, StartYourSmall.Biz, etc…
Personally I think ‘keyword’ domain names are hokey and boring. I know many domainers like them because of their search qualities, but even Buy.com goes by the name Rakuten.com now. Keyword names sound too generic, too fly-by-night. Amazon started out selling easy-to-ship products like books, but they didn’t go with Books.com. Why? Because it puts them in a narrow category, and you can’t say, go buy this book at ‘Books’ without it sounding a bit obscure. But you can say go buy it at Amazon, and people know exactly what you mean.
Offhand, I can’t think of a large well-known and highly successful company that uses keywords for their business name. It’s better to go with a word that can be associated with a service. Google isn’t Search.com, for example. And as a result, ‘Googled’ became a term that everyone is familiar with, that is automatically associated with ‘Search’. Go to Search.com (owned by CBS) and see if you’re ready to make them your default search engine. And then ask yourself why you wouldn’t. You probably won’t even know why, but brand experts do.
@Grim
Quite true. Most companies wish to establish brands which that can protect and enforce via trademarks. However, they also acquire premium keyword domains such as data.com, social.com, family.com and books.com (which is owned by Barnes & Noble). Amazon will probably acquire Barnes & Noble one day, so they’ll have books.com (which for Amazon will hardly matter)
That’s true! Except for Care.com, Candy.com, and a few others . . . Amazon uses generic as conduit for other business, such as Soap.com and Diapers.com. Therefore, generics have their place, even in Amazon modus operandi.
What do
Brightcove
Seagate
Alcatel-Lucent
Verimatrix
have in common? They’re all multi screen delivery companies. You really have to ponder to remember them.
Accent
@Mike: “Amazon’s plan’s for its new gTLD was apparently to give them to customers”
I assume you mean sellers who use the Amazon platform?
Sellers and customers (buyers) of amazon, correct
Either company could give domains free with included advertising, but .Infos are a dollar, .TK and Facebook are free.
Hard to see how it would be worth the trouble for more than a few extensions.
I don’t know Facebook seems to have done pretty well with it
Or they could simply never get around to releasing them. After RegisterFly I would not expect ICANN to do anything about it, as long as the checks keep coming.
After RegistryFly ICANN put the current system in place where de-accredited registrars domains are transferred to one registrar in bulk.
ICANN screwed up the registrarfly.com deal but learned from it and fixed it
It looks to me that quite a large portion of the top 50 extensions could be private, in fact if not in name. And remember how quickly popularity diminished on the 1 & 1 pre-sale chart.
We most of the top 30 and we have point that out 25 or so are in contention and no one know who the owner will be.
Also .home is still included and that one is not going to go, NYC has residence requirements, .INC will only be available if you have a company registered with the matching domain
@Louise
Yes, there are thousands of brands that are not well known… but Seagate? They made the first hard drive I bought for my home computer in the 80s.
I guess it just depends on who you ask for any particular company.
Generics can have a place with regards to search as Steven pointed out with Books.com, although I would think B&N customers would have B&N bookmarked for easy access. They can provide some search engine assistance, although when searching Google for ‘books’, Books.com doesn’t show up on the first page. B&N (and of course Amazon) do though.
As far as the generics you listed, I’ve heard of Candy.com, and went to it once… the others I’m sure may be used by many people, but many more people likely buy things such as soap and diapers from Amazon, (or their local store), since they carry everything.
On a side-note, one pretty well-known generic-named store I bought from in the late-90s was Cooking.com…. but it’s been so long that I forgot their name (Kitchen.com?) and had to Google the word “kitchen” to find them. Even generics can’t help sometimes it seems…
@ Grim, did you own Cooking.com? It’s a great brandable. There is a nice-looking store on there, right now. Oh, it’s owned by Target. Did you sell it to Target? Good job! You mean, you purchased it from Kitchen? You forgot your own store? I don’t understand your paragraph.
BTW, it’s SEACHANGE! It isn’t Seagate. Even I got the name wrong, confusing it with the more famous name!
What do Brightcove, SeaCHANGE, Alcatel-Lucent, Verimatrix have in common?
Ever heard of Seachange?
THAT’s why they need the generic! I was looking for this comment, to update my copy for http://LouiseMarketing.com .
Talk about, “cooking,” since we started this article, .cooking became an extension. Wonder how it will do?
Matt
Most people looking for a domain name and 1/2 the time in the US they go to Godaddy.com
99% of the time there 1st choice is going to be taken and Godaddy will spin the domain and show other available domains.
User searches for NewYorkPizza.com
domain taken, not for sale not available:
.net same
.org same
but you can get these domains”
pizza.nyc
nyc.pizza
pizza.food
pizza.eat
so that is where the consumer will get exposed to it and if domains are available and priced under $100 people will register them
hi Grim, a brand should be memorable – I agree! – yet, with internet search and the authority an exact match keyword confers to a landing page, there is a place for generic. I agree, a company shouldn’t name itself generic, unless it is a really brandable, such as, Candy.com, or Care.com.
Nest.com is a really brandable generic – I like it! Next was just valued at $2 billion after another round of funding. Yet, its business has many competitors.
.inc is still contested, with some applicants having unrestricted registration rules.
No digits were allowed in new gTLDs, whether it was just digits or letters plus digits.
@Louise
Nest is an example of a great generic that you can also brand, and it fits the Company’s biz offerings well: smart home products. Others include: medium.com (purchased by the founders of Twitter) for premium blogging (“Medium is the message”), Path.com (purchased by early FB founders/team), which had a high valuation, although it’s run into some challenges. Reputation.com was a great pick-up by the personal/company branding/PR company which had another name prior to its own rebranding.
It’s part of the Black Swan theory.
Most folks aren’t analytical thinkers nor very objective in their reasoning. This includes some pretty accomplished people. The result is cognitive bias. Its entirely possible for the most hindsight-obvious answer to be loudly rejected by the vast majority of people when they have some sort of emotional and/or financial incentive in seeing the irrational outcome occur (ie circa 2004’s “REAL ESTATE ALWAYS GOES UP! LOOK AT THE LAST 40 YEARS!”)
Everyone agrees that commoditizing TLD extensions themselves has the potential to usher in a change of public perception. It will certainly be profitable for a few. Still, notwithstanding the predictable shrieking from a few interested partisans, has anyone noticed the eery absence of discussion about total project failure?
What if ICANN throws this party and ultimately, nobody really cares?
What if the highest and best iteration of new TLD profitability comes in the form of defensive registration extortion and a few idiots who don’t understand how worthless their .domain really is?
Interesting times.
@Michael
Non of these domains are going to be available.
“but you can get these domains”
pizza.nyc
nyc.pizza
pizza.food
pizza.eat
so that is where the consumer will get exposed to it and if domains are available and priced under $100 people will register them”
Konstantinos
This was just a short example to demonstrate how people will be exposed to these domain names with a mix of available .com net org and .co at Godaddy and other new extensions with some existing premium domains as well
What I see is an opening for “a” new TLD to become the new .com .Whether that will happen will depend how much exposure that tld gets in the media and how large an audience. .com could remain on top, but in my opinion only if the persons who have registered and parked most of them sell them ,enmasse, to mainstream end users. The more/longer .com stays in hands of a relatively small number of people the less likelihood of .com remaining top of the pile of tlds as it will get forgotten when new tlds’s start being used on TV etc etc etc. I liken it a bit to ,in my case, .com versus .co.uk in the beginning the cc tld .co.uk took 2nd place to .com, now it pretty much is preferred in UK .
@ Steven Sikes, Isn’t it the truth? Those are good one-word, dot com brands: Medium, Path, Reputation. In today’s news: Facebook bought Branch linking service, including:
Branch.com
Another great, meaningful, one word dot com!