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Are domain registrants not aware of new TLD options or do they just not accept them? Or is there just low demand for each .com alternative?
My initial reaction to the underwhelming “out of the gate” registration numbers for new top level domain names this year was that it’s an awareness issue.
99.99% of people have never heard of new TLDs. Once they’re aware, they’ll start registering them.
After taking a look at registrar search yesterday, I’m starting to wonder if the issue is actually acceptance instead of awareness.
It’s not the 99.99% of the public not knowing about new TLDs that matters right now. What matters is how many people searching for domain names to register are aware of them.
I think most domain searchers are aware of new TLDs.
Search for a domain name at GoDaddy and the top search results (after the matching .com) are new TLDs. They’re slotted ahead of alternatives like .net and .info.
So if I search for a domain at GoDaddy right now, I’m aware of new TLDs.
Right? Or do I never look at the suggested alternatives if .com is already taken? Do I not accept alternatives to .com, so I just look for another domain.
I’m not sure. Startups have embraced alternatives such as .io, .co and .me. Will they start to accept other new TLDs once they see a hot startup using them?
I believe awareness in the general public is coming, and that will lead to an acceptance by domain registrants. When Realtors start using .realtor, New Yorkers start to embrace .nyc and a brand advertises its .brand, then the public slowly becomes aware.
At that point, someone searching for HomeRun might register HomeRun.today since Homerun.com is taken.
Yet it will be a slow climb, which gets to the demand question. How many people every year register domain names related to construction or biking or plumbing? Not many. Once both awareness and acceptance click, people will consider these domains instead of .com. They will siphon off a sliver of the 30 million .com domains registered each year.
But how much of a sliver? Is there enough demand to be spread across all of these TLDs? After all, there are only so many domain names related to each niche already registered in .com.
Awareness, acceptance or demand?
Otherwise, lots of people might not get to the website.
Yesterday Frank Schilling tweeted this picture of a bus ad for his .sexy top level domain name:
Adrian Kinderis, CEO of ARI Registry, responded asking about why the ad includes https://, and Frank Schilling explained:
That lots of cell phone users need to type in http:// before a new TLD if they’re typing the address into their address bar, is a key example of the universal acceptance problem with new TLDs.
Even if cell phone browsers universally recognized new TLDs, would advertisers feel inclined to put www. before the domain so people recognized it as a domain name, as Kinderis proposes? That might separate it from ads with dots that aren’t domain names:
The problem with what Frank did here, is that even through people will now recognize this as a web address, they probably won’t type in http:// at the beginning. When’s the last time someone typed http:// in front of a web address, except for new TLD applicants trying to access their domains on different devices?
My views on domain parking, domain sales, registrars and registries.
I’ve been collecting my thoughts on the domain name business over the past month, and it’s time to put them down in writing.
Here’s what I think about the state of the domain name industry in August, 2014.
Domain parking is down. Way down. But don’t confuse down with out.
We’re still talking about a relatively big business. Rook Media’s acquisition of DomainSponsor and its domain name portfolio in April is proof of this.
I’m seeing more and more domain name owners forgo parking revenue and instead posting for sale signs on their domain names. Some parking/sales platforms, such as DomainNameSales.com, make this easy.
Domain resales of .com domain names continue to be strong. Domain name registrars have integrated aftermarket sales paths, which are driving a number of these sales.
Granted, when you can no longer rely on parking, you count on sales.
The domain name registration business is getting lots of attention lately.
Rightside is now a separate, publicly traded company. It’s no longer part of Demand Media. So many Demand Media analysts focused on the content business when they were a combined company. They were oblivious to the domain business. Now that the two companies are separated, it’s easy to see that the domain business is worth more than the content business.
All eyes are also on GoDaddy, which has filed to go public. GoDaddy is a giant, and it being public will bring more attention to the domain name registration business.
Of course, domain name registrations themselves aren’t growing like gangbusters. GoDaddy added about a million domain names in the first half of the year. A couple percent.
That’s not much. Like .com, GoDaddy is big. It’s getting harder to move the needle on domain name registrations.
GoDaddy is more than domains, of course. Its percentage of revenue from domains is falling, giving way to web presence and business applications. All three lines are growing, but domains will make up a smaller part of its business going forward.
Rightside’s domain registration business isn’t growing much, either.
Tucows, another publicly traded company, smartly diversified into mobile phone service a few years back. Without that, it would have had a pretty lame second quarter. Instead, it blew doors.
Which brings us to new TLDs…
The hope was that new TLDs would present a growth opportunity for registrars. So far, it has been muted.
There wasn’t some crazy, pent up demand for new TLDs. And now the market is flooded with them.
Any honest new TLD registry will tell you they’re disappointed by registration numbers so far. They’ve had to reset expectations.
Even I, who didn’t quite see the demand most applicants did, expected more than what we’re seeing.
That’s not to say new TLDs are a dud. Many registries, particularly the portfolio ones, are doing just fine.
Judging by the crazy prices some applicants are paying for new TLDs at auction, they still think better days are ahead.
It’s likely. There’s just not that initial huge rush of registrations that many had hoped for. Most people aren’t going to go through the hassle of switching domains. New TLDs will pick up momentum over time, siphoning off some new registrations that would have gone to .com.
The key here is over time. New TLD business models that weren’t set up to grow over time are in pretty bad shape.
Registries are having to market to end users. They’ve realized they won’t get the real estate they want with domain registrars.
A lot of TLDs are in the “unsustainable” zone of registration base. They need to figure out a way to grow or cut overhead, fast.
ICANN will get a lot of pressure over the next 12-24 months to reduce the fixed price component of its contract with registries. We’re only talking $25k a year, but that’s a big deal if your TLD has just a couple thousand registrations.
Frankly, ICANN should acquiesce. It has a huge surplus from new TLDs, thanks to higher-than-anticipated application numbers.
So that’s my view of the domain name industry right now. I reserve the right to change my opinion next month.
Professional poker player and domain investor Dutch Boyd publishes Poker Tilt.
A key reason I like the domain name industry is that I get to meet people from very different backgrounds.
One of these people is Dutch Boyd, a three-time World Series of Poker bracelet winner who also dabbles in domain names.
I met Boyd in person during a TRAFFIC conference in Vegas many years ago. He was a fan of the blog and we started chatting. We ended up heading to the poker tables where he taught me a trick or two. (I lost money, so it didn’t work.)
Boyd has an interesting past with many ups and downs. After his latest “down”, he decided to raise money on Kickstarter and publish a book called Poker Tilt.
Poker Tilt tells his interesting story, from his early days growing up with a single mom, to his (ultimately) failed online poker site and battles with mental illness.
Dutch is a smart guy. He graduated law school at 18, when most people are just graduating high school.
He then started online poker site PokerSpot, which busted and created a number of enemies for him. In the book, Boyd blames the downfall primarily on credit card processors withholding funds. But for players who had deposits with the site, all they probably care about (understandably) is that they didn’t get their money back.
Boyd later started to suffer from depression. He was diagnosed as bipolar and went through multiple manic episodes, which left Boyd with even more failed relationships and enemies.
It was perhaps during one of these manic episodes that he initiated some failed domain name acquisitions, leading to complaints on domain name forums. In his book, he explains that he wasted money on domains during one of his episodes:
I started sleeping less, wouldn’t stop talking about random nonsense, and slowly sunk deeper into full-blown mania. I went through a buying splurge where I wasted thousands of dollars on worthless domain names…
Aside from his personal struggles, I found the book interesting as Boyd explains the declining state of the poker industry right now. I tried swapping out “domain” for “poker” in his descriptions of the industry, and found lots of similarities.
Certain aspects of the domain name business aren’t what they once were. Yet many domain investors ignore this reality. They press forward, assuming everything is the way it was and will remain this way forever. They pat each other on the back for big scores they made a decade ago, ignoring what’s happening in the past few years.
The same goes for the poker industry, as Boyd tells it, although the reasons for the retreat in poker are different.
Fortunately for domain name investors, there are plenty of ways to reinvent themselves and shift their business models to take advantage of the new landscape. The same might not be true for poker players.
If I have any complaint about Boyd’s book, it’s that he uses a lot of poker terminology that non-poker readers won’t understand. That said, the book flows even if you don’t understand the references.
Boyd’s book is worth a read. It’s available on Amazon.com in both Kindle and paperback versions.
No surprises in initial launches of four medical-themed domain names.
As I previewed earlier this week, the only four domain names entering true general availability this week were medical-themed domains from Donuts.
Here are how many domains are registered in each of the four after the first day, based on zone file numbers:
The numbers are about where I expected them to be. As I mentioned earlier this week, three of the four domains are in Donuts’ highest price tier, which limits investor speculation. Also, the medical community tends to be slow to respond to domain names.
.Dental gives a lot of promise to .Dentist, which Rightside is launching later this year. I think .dentist is much better than .dental.