My predictions about what happens to aftermarket values of domain names when new TLDs are released.
In general, domainers are opposed to new TLDs. I don’t think this has anything to do with the concept of new top level domain names. After all, many domainers have embraced each new TLD as it comes to the market (much to the detriment of our pocketbooks). It has more to do with the baggage (e.g. new trademark rules) that are coming along with new TLDs.
That said, I do believe that new TLDs will have an affect on the domain name aftermarket. There are many categories that will be affected, including IDNs, country code domains, etc. But for today let’s just focus on .com, .net/.org, and newer TLDs such as .info, .mobi, et al.
.Com – In the short run, new TLDs will cause .com values to increase or stay the same. There will be massive customer confusion, just as there is today if you tell someone to go to anything other than a com/net/org address. This will result in more traffic to .com domains, especially those with a corresponding new TLD (e.g. Vegas.com, Eco.com). In the very long run, if consumers become accustomed to the idea of paying attention to what’s to the right of the dot, there could be some erosion of .com’s value. But that’s so far off I can’t even imagine when it will be.
.Net/.Org – What about some of the other original TLDs, such as .net and .org? .Net has always been a middle ground; a second choice to .com. .Org has a good brand, and it could be enhanced if .org registry PIR gets .org equivalents in IDNs. This is a tough call overall. I don’t think .net values will be helped by new TLDs, but I don’t see them plummeting, either. What will be interesting for .org is if a similar, but more specific domain, is released. Consider .charity, restricted only to non-profits. That might steal some attention from .org, which can be registered by anyone.
Newish TLDs – I see no possible way for newer TLDs, such as .info and .biz, to hold their secondary market value as new TLDs come to market. Most end users will consider buying a .biz or .info domain name if they can’t get a .com, .net, or possibly even .org. But what if they now can register a .web or .’vertical’ domain name for $10? They’re more likely to do that than plunk down $500 or $1,000 for an already registered .info. Yes, it’s true that web users will begin to warm up to the idea of something other than .com, but that still doesn’t give the edge to these existing TLDs compared to newer ones. (I write this as someone who does own some .biz and .info domains.)
Sammy Ashouri says
Great post!
I pretty much agree with everything mentioned ;).
newTLDs.TV says
Are the Manhattan real estate values eroding because the Beijing real estate values are booming?
There are 192 million domain names registered today when the internet population is reaching 1.5 billion and could reach 3 billion by the end of 2020. There is market for all TLDs, new or old and good domain names will be as valuable 3 years from now as they are is today…
Antony Van Couvering says
Sounds about right. More choice means lower prices for consumers. I should note, however, that domainers didn’t like new TLDs even before the new trademark rules came out.
Andrew Allemann says
@ Antony – I don’t think that has anything to do with the concept of new tlds though. History shows us that domainers will register lots and lots of new TLDs at inflated prices. Perhaps the volume of new TLDs at once concerned domainers.
jp says
Definitely in the short run traffic to .com’s will increase thanks to some good old cusomer confusion. Of course, as you said, only to be counterbalanced by UDRPs
ojohn says
What is going to make all the difference is whether or not a few famous companies and cities will switch their main website to a new TLD right from the start. I wonder if anyone has done a survey of the top 500 companies and cities to see how many of them intend to get their own TLD and more importantly how many of them are going to use that as their main domain. Once the floodgates are opened the older extensions have to have something special going for them in order to be able to compete with all the new TLDs, having already established a huge mindshare like .com or being a famous or major country code will certainly help, but ultimately no one can tell how that new environment is going to take shape until at least a couple of months after the new TLDs are released. IMO
Andrew Allemann says
@ ojohn – a couple of months is a short period of time. As far as cutting into .com mindshare, we won’t know for many, many years.
dcmike77 says
What about long-tail .coms? The value of these will also take a hit as vertical options open up.
Overall, I don’t see how gTLD’s DON’T reduce the value of .coms with less than $50k in value. We’re kidding ourselves if we think otherwise.
gTLDs are only being pushed for money-grubbing domainers that missed the land-rush of the 90s.
Andrew Allemann says
“gTLDs are only being pushed for money-grubbing domainers that missed the land-rush of the 90s.”
Well, some of the biggest domainers who’ve made money on .com are considering applying for their own TLD. So I don’t think that’s true.
MS says
It is certain PIR will get the rights to .org, Verisign the rights to .com,.net etc.
Nice to see IDN’s getting noticed in a top blog like yours Andrew.
Andrew Allemann says
@ MS – I assume you’re talking about IDN variants of .org/.com? It’s clear VeriSign and PIR will go after some of them…although there isn’t always a clean translation.
Snoopy says
Personally I think this will result in lower values of all gtlds, I can’t see how it would help .com which is already dominant as far as gtld’s go and really only has market share to lose, not gain. That said I expect a minor effect.
Agree on the alt tlds, I think over time people will realise that the small market alternate extensions have has to be shared with dozens of other tlds. For a start the domainers who will be bidding for these names at auctions initially will probbaly be using money that otherwise would have gone into existing alt ext’s, and .com to a lesser extent.
I see it like a city, the downtown already been bought up long ago (quality .com’s), we have some suburbs on the fringe (.info, .biz, .mobi etc) but only 5% of the total land outside the downtown area has been bought. When the other 95% comes onstream (.shop, .xxx, .web, .nyc) it is going to be a massive supply change with a not so big change in demand.
MS says
“gTLDs are only being pushed for money-grubbing domainers that missed the land-rush of the 90s.”
And for the billions of users who missed English classes or never had an English class to begin with.
I think Andrew analyzed the market correctly and the only thing that is a fundamental need to the natural progression of the global internet is the addition of non latin (IDN) domains.
@ Andrew,
Yes i was referring to IDN TLD variants.
When a TLD has no clear translation which may cause more then one variant*, they will all be bundled and must be under the control of the same registrant as anything else will cause confusion.
There is a clear consensus on the various ICANN WG’s that confusion (Aural,Viral or other type of confusion) is not possible.
*Hebrew example, both of these are a variant to .com, they sound identical and are similar in view as well: .קום and .קומ
Constantine Roussos (.music) says
I think some really great innovation will come out from new TLDS. Some will bring new ideas and some will not. But you have to open up the market and give consumers more choices.
Constantine
.music
MS says
A “Couple” options for now: http://data.iana.org/TLD/tlds-alpha-by-domain.txt
We have an option to move to the middle of the amazonas and build a nice tent too.
ojohn says
@ Snoopy
The difference is that City’s landscape is pretty much permanent and it will only have gradual changes over a long period of time due to new development or expansion, but the virtual real estate is not locked in by any real boundaries and it can switch and change overnight.
@ Andrew
The natural progression of a TLD might take several years such as what we have seen with some of the older extensions, but the new TLDs can be propelled to the top in a very short period of time depending on the amount of advertising a company or city is going to do and it is logical to think that whoever gets a new TLD will probably is going to do their best to let the whole world know about it and when that is done by some of the bigger and more famous companies and cities that can have a very big impact very quickly.
Some of the top category defining domains might actually increase in value right now, because some people might think that having them could give them an advantage for qualifying for the corresponding new TLDs, but I am not sure how much weight that will have with ICANN.
Andrew Allemann says
@ ojohn – the promotion will have to be more $$ and/or effort than all of the previous TLDs have put forth. Especially if 100 or 200 new TLDs come online at about the same time.
Andrew Allemann says
@ MS – that brings up another question that has been on my mind. What if VeriSign locks up all of these IDN variants, then we’re able to force an actual competitive bid for for .com in the future. Then we could have one registry holding .com and another holding all of these IDN variants of .com. (or .org, et al)
MS says
@Andrew
Verisign’s plans: http://idnblog.com/2009/12/03/exclusive-qa-chuck-gomes-verisign/
Andrew Allemann says
@ MS – that doesn’t address my concern. Presumably VeriSign will need to apply for all the .com-in-IDN TLDs. Then if VeriSign loses the contract for the .com TLD, it would still have the contract for .com-in-IDNs, meaning they would be split across two different registries.
Allen T. says
There you .com owners go again drinking each others cool aid!
Everytime I visit these posts, I hear .com owners making dumb ass remarks and other .com owners patting each other on the back in agreement.
A number of you say that .com will increase in value when new domains come out, really? That’s a bunch of cr*p!
If that’s the case then how do you explain country codes gaining traction in foreign countries and becoming the primary extension. Did you all see the post that shows more people in Sweden registering the .se country code extension and dropping .com extension?
When the .gay extension comes out do you really expect gay people to get confused and type in a .com? Are you all that stupid! This is what i’m talking about when I say you all are drinking each others cool aid.
When you all talk about the .biz and .info extensions being marginalized I think that’s foolish too.
Do you all have any ideal how many .com domains are parked, providing no real value to the end user? All one has to do with a category killer domain under .info or .biz is create a superior site for people in a particular industry to use and people in that industry will flock to it! Once professionals in that particular industry start flocking to that site and word spreads within that industry, do you really think they are going to get confused and continually type in the .com extension?
Quit making a bunch of b.s. statements and start living in the real world!
David J Castello says
DotCom is much more than a TLD. It is the intuitive brand for a once in a lifetime media revolution and it has been fully embraced on a global level. Referring to dotCom as just another TLD would be like saying The Beatles were just another band. The only other TLDs that matter to people are the ccTLDs – and only in their respective countries.
Another factor many are not considering is that many of these new gTLDs will be English words and they will never be embraced internationally.
M. Menius says
@Andrew – “Especially if 100 or 200 new TLDs come online at about the same time”.
If that actually happens, it will be the single worst thing which has ever happened to the internet. It will detract from the organization of the net. It will confuse consumers, and in a big way. It will pollute the internet with left and right sides of the dot now mirroring each other in strange combinations. Not to mention the TM fallout.
The only factor which offers some minute semblance of controlled growth is that it will not be financially feasible for companies to launch 100-200 new tld’s. I cannot imagine a large enough pool of new buyers to sustain that many tld’s.
If the tld’s are restricted to relevant industry professionals, then the registration numbers will be too low and the cost (and inconvenience) of confirmation will kill the tld (ex .travel). If the new tld is unrestricted, then domain investors will comprise, by far, the largest % of holders in the best keywords (which is actually the REAL covert business model of many lining up to pump and dump news tld’s}.
The idea that this is actually bringing innovation to consumers and filling some market need is laughable. Now, there are pockets of business in which it might make sense to introduce a few new tld’s to market -> .realestate or .homes, but not both. Possibly some geo’s that will cater to a local audience.
Whatever new tld’s get added should be very clean, logical, unambiguous, and be of great interest to many people and companies, i.e. built upon a robust, multi-billion dollar industry.
Once again, bring just a few new tld’s to market and test the waters. “Unlimited” new tld’s will muddy the waters like never before. The right side of the dot means something in the heirarchical language structure of the net. A floodgate approach is indefensible when one weighs the potential costs & complications against the potential benefits.
Andrew Allemann says
@ M. Menius – unless there’s a drastic policy change, you can expect at least 100 to 200 of these to come online in short order. I’m basing that on just the people I know applying for TLDs, and also assuming VeriSign’s IDN applications will number 20 or so.
Allen T. says
Andrew:
Why aren’t you posting all of the comments?
Andrew Allemann says
@ Allen T – I am posting all of the comment. I think you replied to an email comment update rather than making the comment on the web site, b/c I got an email from you
Steve M says
You know, 100’s of new tlds almost makes one feel sorry for the TM holders.
O.K., fine. Just kidding. 😉
MS says
@Andrew there is this and possibly other highly unlikely scenarios that will cause one domain and it’s variants to be with two seperate registries but in that case it will be just be another account to manage for the registrant. Which ever way it goes, the bottom line is that any variants of the domains one registers can only go to that same registrant in order to prevent confusion, regardless of which registry is getting the renewal fees.
npcomplete says
Re: .IDN
It will be interesting to see how the issue of aliasing plays out. i.e., will a transliterated version of xxx.com be pointing to the same address as the xxx.idn sound alike version. If not (no aliasing) there will be major market confusion, and of course huge negative impact on those of us holding IDN.com. If aliased, then there will be a huge positive pop in price.
This (of course) does not apply to genuinely new .idn like .рф (Russian Federation)
Andrew Allemann says
@npcomplete – it appears from that link to the VeriSign rep that they won’t be aliased. If you want the IDN version, you’ll have to ‘ask’ for it (pay?), otherwise it will not resolve. LMK if I’m misreading their statement.
npcomplete says
@Andrew – I missed the link. It sounds like aliasing at a price (which I always assumed – nothing is free). If however, the idn.com transliterated to Chinese is sold to somebody other than the idn.com owner there will be market confusion and negative impact on the .com version. If it is only offered to the idn.com owner for a price, then this will also be positive for the .com owner (i.e., even failure to resolve the transliterated version will protect the .com version value).
Andrew Allemann says
@npcomplete – that’s my understanding…that it will only be offered to the .com owner. Otherwise it doesn’t resolve.
So here’s another thought: what if the IDN version is registered first? Then will the .com be only available to the person who registered the IDN?
Lou says
The continuation of issuing new TLD’s has destroyed the domain investment market, including the .com market. The only exception is certain one word dot-com domain names such as business.com, wine.com and sex.com
Domain investments are not the real estate investments of the Internet. There is a limited amount of land. On the other hand, there is no limit to the number of domain names that can be issued, especially when you keep on adding on new TLD’s. The new TLD’s are good for the domain registrars who make money on each new registration, but are bad for all domain investors who will see their value of their investments continue to erode.
Andrew Allemann says
Lou – I’d say that having an alternative to .com lowers the value somewhat, because potential buyers of the .com might settle for another TLD. But the difference between having 10 alternatives and 100 alternatives is negligible. The consumer confusion makes up for the difference, tipping the scales in favor of .com.
M. Menius says
I think the introduction of many new tld’s will increase the importance of the right side of the dot. The top level domain “keyword” contained there should be very singular and instructive and tied to a real industry. Something like .web or .internet are too vague and do not add to the semantic organization of the internet (which is going to become even more important as the net grows in size and complexity).
On the other hand, something like .insurance or .loans is very specific and can be assimilated into the internet’s greater system of organization. There needs to be exclusivity too with certain tld’s such that something similar in meaning cannot be released. You do not want .info competing with .facts or .data. Or .loans competing with a .mortgage. Allowing this type of incestuous competition will undermine the companies that have already branded around pre-existing extensions.
Domain extensions are somewhat like unique brands in their own right. If ICANN allow tld’s close in meaning to compete with one another, it will diminish the significance of each tld and the companies who will be utilizing them as internet portals to their goods and services.
MS says
@Andrew:
“So here’s another thought: what if the IDN version is registered first? Then will the .com be only available to the person who registered the IDN?”
Can you please clarify the question?
Andrew Allemann says
@ MS –
If I register IDN.IDN and the same IDN.com isn’t taken, then can no one else register IDN.com until I do?
MS says
@Andrew
I didn’t notice i am a year late to reply but better late then never.
To try and answer in an organized way, i may repeat some things that are already clear but just in case:
There is no way to register an IDN.IDN in the gTLD space today (e.g россия.ком or ישראל.קום), and when they will be available for registrations, then whatever is registered by that day under IDN.COM (e.g россия.com or ישראל.com) will be reserved to the current registrants.
Once the registrant wishes they can pay to activate that variant/transilerated way of saying .com in whichever language (e.g россия.ком).
That activation option is only available to the current registrant and is blocked to anyone else.
The only IDN.IDN that can be registered today are in the ccTLD space (e.g .рф)
In the IDN ccTLD’s group, some are brand new TLD’s (e.g .рф and .مصر) so since they are new there are no previous rights as they don’t exist in they’re ASCII ‘equivilants’, The IDN ccTLD’s that are existing (e.g .co.il) are also granted the same right as with IDN gTLD’s and once the approval process for the new idn variant of an existing ccTLD is completed, the registrant will activate them and they will be blocked to anyone else, but in that case i believe in most cases the activation will not cost anything and in some cases the activation is done automatically (e.g the .cn registry, if you check whois: http://cwhois.cnnic.cn/validatecode/validate.jsp?value=%CF%C2%D4%D8.cn&entity=domain&service=/whois&inputfield=value for http://cwhois.cnnic.cn/validatecode/validate.jsp?value=%CF%C2%D4%D8.cn&entity=domain&service=/whois&inputfield=value 下载 here: you will see it’s showing all variants of that domain.
If you think of it, that is the only way it can work, as the first goal is to avoid any type of confusion.
If a user won’t be able to tell (i.e when listening to a Radio commercial or in conversation),if they should visit дкц.com or дкц.ком then that is going to cause confusion as one may be a site for children and the other may be a site for (where ever one’s adult imagination wishes to go).
I hope it makes sense, please let me know if i should include any official documentation to support any of the above.