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Domain Name Wire

  • Experts weigh in: what do new TLDs mean for domainers?

    1. BY - Jun 07, 2012
    2. Uncategorized
    3. 28 Comments

    What should domain investors think about as new TLDs come to market?

    Companies have submitted close to 2,000 applications to ICANN to run new top level domains covering everything from .app to .zippo. What will this mean for domainers as we watch a flood of top level domains hit the market in the coming years?

    I reached out to close to 20 industry experts with diverse backgrounds to get their opinion on this question:

    “New top level domains are on the horizon. What impact will this have on domainers?”

    I asked them to limit their response to 100 words, which is easier said than done. Below is the first set of responses. Tomorrow I will publish the responses from more industry experts.

    Bill Sweetman
    Vice President, Domain Portfolio, Tucows

    The launch of new TLDs will mean that hundreds of millions of dollars are going to be spent on consumer marketing and advertising of these new domain extensions. In the next 24 months, the general public is going to see an unprecedented wave of messaging about these new TLDs, and that means people around the world are going to end up paying more attention to domain names *in general* and what’s to the right of the dot. The upcoming increased awareness of domain names is good for the industry as a whole and spells opportunity for anyone with an open and entrepreneurial mind, and
    that includes domainers who are willing to think outside the .com box.

    Alexa Raad
    CEO, Architelos

    Domainers, like the rest of us, will have to wait and see. The opportunities will no longer be restricted to their portfolios of predominantly dot-com names. The focus will be on the open generic keyword TLDs, but it is too soon to tell which ones will be awarded and of those which will have a strong value proposition, and a killer marketing and PR machine to drum up awareness and demand. I would also not be surprised to see some domainers investing in gTLDs as applicants. No one knows for sure the possibilities of new gTLDs, but I am already hearing of some very innovative ones and some .lol ones!

    David Castello
    Founder, Castello Cities Internet Network, Inc

    It will take a long time for any of these new generic TLDs to gain traction. Conversely, in-house TLDs like dotNIKE etc will do fine because their usage is limited and protected. However, the generic TLDs hoping for public acceptance and wealth will discover the reality of being a needle in a haystack that can no longer depend on the traditional initial cash flow from speculators simply for being the new kid on the TLD block. The phenomenon of a TLD going belly-up will cease to be a rarity and, after the dust settles, the legacy and country code TLDs will become the gold standard as the safest places to build your brands. Look for ICANN, registrars and attorneys to do well. For the rest, it will be an expensive lesson in marketing.

    Monte Cahn
    Right of the Dot and founder of Moniker

    The impact to domainers will be overall very positive for the following reasons.

    There is almost $400mm being invested just in application fees alone for some 1900+ new extensions. Imagine how much additional dollars will be invested into our industry for marketing, sales, awareness, PR, products, services, etc. All for the domain industry.

    This is a huge expansion of our current industry – it’s going to more than double with the addition of new extensions. New markets, new companies, new ideas, new technology, are all being created from this new expansion.

    It’s providing worldwide coverage of our industry as well, something that has been relatively silent until the announcement of TLDs in IDNs, regions such as .Africa, cities such as .Miami, .Berlin, .NYC, . Amsterdam, .Tokyo, etc.

    More awareness, more publicity, more users, create more demand for new and existing domains. It also opens the door for investment for domainers who feel they missed the gold rush of the early .com years. There are now several new domain extensions that have great potential in Geo names, generic top levels as well as application type names. Extensions such as .Law, .Health, .Green, .Music, etc. provide great new virtual real-estate opportunities for all.

    This is comparable to what Web 2.0 was with the expansion of the internet, except we are probably talking Web 3.0 +

    There will be more names to sell, buy, monetize, develop, build, and redefine!

    Bhavin Turakhia
    Founder, Directi and Radix

    I believe new TLDs will not change much in terms of business for domainers. I believe there will be a lot of opportunity in making legit investments in domain names in new TLDs which will pay dividends. For the first time now there are several interesting creative options available on the right side of the dot which genuine investors can leverage.

    Rich Merdinger
    Vice President of Product Development – Domains at GoDaddy.com

    In a word, ‘opportunity.’ At Go Daddy, we consider domain names to be like 21st century real estate and the new alternatives certainly present significant potential in the years ahead. In the short term, domainers can look to maximize the potential of the current portfolios and position themselves to take advantage of new options that come with the emergence of newly introduced gTLDs. We expect many open-minded investors will find innovative ways to leverage new prospects. With the number of new domain name extensions being released, there is also potential for saturation, so careful planning will be essential when it comes to decisions on where to invest.

    Elliot Silver
    Domain investor, ElliotsBlog.com

    That’s the million dollar question. No doubt there will be an impact, and as domain investors, we will need to adapt to market changes. If brands utilize their gTLDs and they are advertising .brand websites, consumers may begin to look to the right of the dot more quickly, and that could increase the demand and value. Ultimately, we need to realize that this is new territory and changes in the market are likely.

    [See responses from Mike Berkens, Bob Mountain, Juan Diego Calle, and others tomorrow.]

28 Comments
  • I think just the exposure to the whole industry will be good, most people think it is a complicated process, no different that ordering a cheeseburger via a drive thru window.

    Each extensions will have a few premium keywords, other than that, it is deadweight.

    I think people who have an invested interest in the new extensions, will have a biased view.

  • Regardless of what happens .com will bet at top.

    Some great short term opportunities to make money.

    Because of the lack of numbers applying for specialized extensions you will see these new extensions charging 20-50 per year to make up for costs. Can’t survive on 10 dollar registrations.

    Also if an extension only signs up 100k people for 10 bucks then how will they survive the next years. Simple- costs on renewals will go way up.

    Also I would rather own a aged domain name of 15 years with back links and history, as opposed to a new extension for Seo purposes. Regardless of how algorithms play out.

    Predictions:
    .web should be good.
    I think tucows will be a real big winner in 2-5 years.

    Donny M

  • Bill Sweetman makes the real point imo. New gTLDs are going to be marketed directly toward the targeted registrants. This hasn’t happened before. When was the last time you saw a sign on a city bus that told you to buy a .com? Well, that will happen for .NYC and more. Vertical integration is a game changer. Growth of Top level awareness among users and consumers is going to increase exponentially.

  • I was unaware that Elliot even knew there were domain extensions other than .com – wow.

  • @Tom Gilles
    This hasn’t happened before? Study the history and initial marketing strategy of dotTravel.

  • @David

    valid point.

    .travel downfall maybe was restrictions, pricing.

    It will be interesting to see what happens when a couple hundred of these come out.

  • Ms Domainer says:

    June 7, 2012 at 1:35 pm

    *

    I agree with David Costello 100%.

    His analysis regarding brand TLDs seems dead on.

    Much money will be spent promoting brand TLDs; therefore, they will be recognized by the buying public, whereas the generic TLDs are likely to suffer the same fate as .coop, .biz, .travel, etc.

    I also expect that the generic applications will end up in court for many years to come.

    Yep, the lawyers will do very well, indeed.

    *

  • The new top-level domain names are a white-collar business opportunity doomed for a bust. To predict future success or failure you have to go to the past and analyze how things developed. Until today, the only successful extension from the top-level domain names is the .com extension. If you create a website with .net you are a second class citizen. CCTLD’s are expected to do very well in the future, and the domain business will be more localized than global. The only successful top-level domain names will continue to be .com, .net and .org, with .com taking the lion’s share. Many owners of .info, .biz and the rest, especially those who do not have a website for those domains, but are speculating for domain value, have let the registration of their domain names expire. So the beneficiaries are those who own the premium .com extension domains and the losers will be those who speculate on the new top-level domain names. Intellectual Property Lawyers will become very rich defending trademark owners. ICANN may go public and sell shares like Facebook from all of the money they are getting. WIPO will need a couple more floors in Switzerland to handle 20-fold more of disputes. At the end of it, .com will prevail.

  • @Tom Gilles
    dotTravel was a real lesson for all of us that should not be ignored. They targeted the Travel industry dead-on with a huge budget. And honestly, I thought they would do much better than they did. In retrospect, I believe they failed for for these reasons:
    1) Once established, businesses do not like to rebrand on the Internet. You can show them a “better” name and they’ll pass 99% of the time.
    2) Even with dotCom, friends and business clients will usually pass on a better dotCom name. Reason? Their domain name was already in their advertisements and stationary.
    3) DotCom is so branded, so imprinted in the public’s collective brain that it is no longer a TLD. It’s the brand for the Internet. I spoke with some people who took a shot with dotTravel and they all said the same thing: “With good content and SEO, I could get them to find me on Google, but when they tried to remember my name they went straight to dotCom.”

    Over time, some of these new gTLDs may gain traction, but I have a feeling that many of them based their business model on what dotCo grossed and that’s not going to happen with 2,000 new TLDs rushing the field. ICANN should release these new TLDs steadily over time to give each of them more breathing space and a better chance to succeed, but they won’t.

    • @ David Castello –

      I agree with the points you make about .travel. But I also think it’s fair for people to say it’s not a great example because of the restrictions originally in place. A good launch is critical.

      So…agree with all your points but also think .travel as an example is somewhat hampered.

  • .Travel is a bad example since it is heavilly restricted.
    .mobi is perhaps a better example. An idea that looked super good on paper but technology advanced so fast that the need for .mobi became non exsistant.

  • @theo
    dotTravel is no longer heavily restricted. They opened the floodgates long ago.

  • The general public, small businesses and trading funds have a hard enough time figuring out this industry. Spewing out more and more extensions similar to what the sports card industry did in the 90’s with Rookie cards and other types of cards is going to dilute all extensions even more outside of the .Com. There is absolutely no need at all for anymore extensions. lees is more and yes there are plenty of 2 word .Com’s available. Only people lobbying and benefiting from additional extensions are the registrars selling them like an options market maker selling options all day long or a trademark attorney billing out fees.

  • We’ll just have to wait and see how well the companies market these TLDs to end users. Some interesting tlds on the list. ex. .lol .sucks .rip

  • there is simply no reason, other than potentially shortening your domain by 3 characters, to move from a unique .COM- it is your own unique brand.

    Why share a .whatever with thousands of other businesses (assuming they are successful)? It just dilutes your brand.

    And more generally, every mind-moment/millisecond that consumers need to devote to the “right of the dot” (in terms of typing it/memorizing it/ etc.) is simply less time spent focusing on the “left of the dot” which is your unique brand.

    I strongly believe that only big brand .brands will have any staying-power. Adding a dot in between your brand just dilutes it.

  • David J Castello then i stand corrected :)

    Seems they made their regulations pretty vague.

    Any participant in the travel and tourism industry can own a .travel domain name. The only requirement is that a website with content relevant to the domain name must be up within one year of registrations.

    Looks like if you create some content that is travel related your good to go..

    So yeah your example makes sense and not many went for it.

  • @Andrew
    DotTravel is a great example because they actually created those restrictions to make the TLD more attractive to the public. Their logic was that the TLD would be used purely by the travel industry and capture a massive market. A type of quality enforcement to keep the “bad guys” (cybersquatters, speculators, etc) out. In theory, a cool idea, in reality it resulted in terrible sales.

    • @ David – I believe they were forced to add the restrictions since it was technically a sponsored TLD.

      But regardless, the point holds true in that a number of TLDs coming out will have added restrictions. There’s a good lesson with .travel on that.

  • I agree. ICANN is “awarding” many of these TLDs based on which parties they believe are the most representative/authentic. With that mentality in mind, it is safe to say that the dotTravel scenario will be repeated.

    In retrospect, many of us thought that dotTravel was making a wise move to capture the respect of the Travel industry. It just goes to show how vital speculators are for getting that initial cash flow moving and, as I said earlier, it’s not going to be there with 2,000 new TLDs rushing the playing field. The pie is being cut too many ways and, most importantly, the general public couldn’t care less about these new TLDs in the first place.

    Regardless, everyone should makes lots of popcorn. It’s going to be a fascinating chapter in our history and we’ll never see the likes of it again.

  • I’ve already got my popcorn ready.

    I’m more interested in how I can make money rather than just watching the show. I haven’t come up with anything yet :(

  • *** i should also add that in addition to big .brands, i think the gTLDs can be successful for things that the brand doesn’t matter… such as individuals and professionals (doctors, lawyers … .doctor/.lawyer/.real estate) … in these instances the brand means little. They are identified by straight forward personal names and the new descriptive gTLD can add credibility to their professionalism. But for the vast majority of companies/web startups/ventures that won’t be able to afford their .brand (minimum 185k) and uses a brand company name …. it goes back to .COM. This is the vast majority of sites

  • Adding more tld sheep to the field affects the .com lion not.

    Well; except that he has lots more to eat.

  • Domain Storage Unit says:

    June 7, 2012 at 6:34 pm

    I agree. I also disagree. God…I just don’t know anymore!

    Simon says, “Sell all your .com domains, buy all new TLD domains, and hurry!! ”

    What to do? What to do? THE SKY IS FALLING….LOL!!!!

    Pssst….hey buddy want to buy a brand, new TLD? Never heard of it? Nevermind that, this is q-u-a-l-i-t-y stuff, my man!!

    Sh*t…… the .com extension is a literal cesspool of garbage. What makes anyone think they can create TLD cesspools that rival or even compete?

  • FarmerJohn says:

    June 7, 2012 at 7:38 pm

    My question is, are .com brand-holders and stakeholders going to just passively stand around watching the dissolution of everything they’ve invested in establishing themselves in the .com webspace, that has taken decades and many billions of dollars, just to see their presence disappear in a jumble of volumes of new TLDs?

  • Well, since ICANN will soon be swimming in money from this, they may be able to afford opening up the .com contract to someone besides VeriSign. Competition for that could be good for domainers.

  • Value is in getting listed in the search engine. If you buy one of googles domain will you be listed in their search results. If yes how much power do they have?

  • Am I misunderstanding something here? I thought that Google was about enterprise and opportunity for all, giving anyone a chance to build a business. Don’t these new tlds cost vast amounts of money, out of reach for nearly all everyday companies, bringing the power of opportunity to the corporates with big budgets, not the best business.

    I suppose it depends on how Google weights the importance of these new tlds, but for me, if Google starts to rank them highly in search results against quality sites with normal domains, then the power of the Internet has smoothly been placed into the hands of the corporate with the biggest budget.

    Or am I missunderstandimg the issue? Your thoughts and explanations would be appreciated.

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