Common Short Codes seems a lot like domain names, but they aren’t a good investment opportunity yet.
Have you ever seen an ad that read “Text keyword to 55112…”? Or voted on American Idol by sending a SMS text to a five digit number? If so, you’ve experienced “common short codes”. These are the 5 or 6 digit codes that you send text messages to for automated responses, voting by phone, etc.
Some companies used “vanity” short codes, such as Google using “GOOGL”. This is similar to a vanity toll free number.
On the surface it would seem like this presents a good domain-like opportunity for investment: Register a bunch of short codes that correspond to generic words on the phone and hold onto them for resale.
Unfortunately, it’s not such a great opportunity. At least yet.
First, short codes are region or country specific. U.S. short codes are not the same as those in Europe. In the U.S. there are about 1.1 million possible short codes using the current 5 and 6 digit combos.
Second, they are expensive. If you want to register a specific short code, your registration fees are a whopping $1,000 a month. It’s $500 a month if you let the registry select a code for you, but that kind of defeats the purpose.
Third, the registration agreement doesn’t give you a guaranteed right to renew. You could register a short code for $12,000 this year and then be told you can’t renew it as its value increases.
Those are three good reasons not to register common short codes. If you want to actually use your common short code the hurdles are even higher. You have to strike a deal with each major carrier in the country to activate your code. That means dealing with Verizon, AT&T, SprintPCS, et al to get them to approve your code for their network.
Imagine if you registered a domain name. It only worked in the U.S., and you had to strike a deal with all of the major ISPs including AOL, Time Warner, AT&T, etc. to allow their customers to view your domain! There’s good reason for the networks to do this with text messages to maintain network quality, but it’s still a big hurdle. One short code expert I talked to said it takes 2-3 months to get all of the approvals even if you know what you’re doing.
After all of that, the registry could decide to not renew your code at the end of the year.
If you still aren’t convinced, consider that the value of vanity short codes may decrease. If you use a smart phone that has a keypad, you’ve probably noticed that the keypad doesn’t have the corresponding letters underneath each number. That makes it hard for people to send texts to “GOOGL” without knowing the corresponding numbers. If there’s any value in vanity short codes, I’d say it’s simple numbers like 12345.
Perhaps common short codes will be a better domain-like opportunity in the future if the market for registration becomes competitive. Until then, I’ll sit this one out.
Jamie Parks says
Thanks for the info on common short codes. I’ve always wondered about those numbers. They do seem like a risky ‘speculative’ investment (compared to domain names) Unless having a short code was a necessary component to be implemented into your core development plan.
So, is the number that twitter requires you to send a message to, in order to enable your mobile phone to send twits, an example of a short code? If so, I’d say that they got a good one: 40404
Andrew says
That’s definitely a good one. There are a lot of good ones still available given the cost.
Michael Berkens says
Andrew
I held on to 696969/711711 for a year then after 24K gave them up
Andrew says
Michael – yikes. I think there might be potential for this in the future, but not at current prices.
Steve M says
I like them myself (which might explain why I own both in the .com; though most other extensions are still available for the time being).
Used correctly, like most of the TV “reality” shows are doing, they are very powerful and effective marketing tools.
Certainly far better than having to repeat long phone numbers over and over again…with the requisite, “…and remember, these are ‘888’ ; not ‘800’ or ‘866’ numbers…”
Patricia Kaehler (DomainBELL) says
I’d never heard the term “short code” till seeing your post…
Information appreciated…
Is there a directory or list somewhere that tells what short codes are currently in USE out there… and by who / for what ??
Thanks in advance…
~DomainBELL (Patricia)
markus941 says
Thanks for the quick overview and insight. I think you’re right – speculating on these is too expensive and gives you no certainty.
I like how you compared this to domaining (except with a lot more cons).
Matt says
There is another similarity between shortcodes and domains in the US. If you operate a shortcode for a major TV advertised campaign, then as soon as you finish using it there’s a good chance other operators (normally those running sketchy SMS chat services) will snap up your shortcode to catch residual traffic. Much like domainers can do with expired domains and their residual traffic/links.
Also, the US shortcode transfer process is somewhat akin to having your teeth pulled out, which I suspect is the CSC’s attempt to prevent an aftermarket.
Pete says
This article has some misleading details, such as the time to get a short code approved. It only takes 4-6 weeks depending on the demand at the time. (I have done it) Also, the possibility of the CSCA denying a renewal of a operating short code would come with a serious legal battle which I am sure the CSCA would loose or have to pay damages.
Andrew says
Pete, some people do say it only takes 4-6 weeks but I’ve heard it can take a lot longer. Also, the terms and conditions you agree to say they can deny a renewal. If that were in the terms and conditions of domain names, we’d all freak out 🙂