Not all TLDs will fail. But here’s why yours will.
Are you thinking about applying for a new top level domain name when the application window opens in January? Here are some things to consider — reasons your new TLD might be doomed to fail.
1. You pick a TLD that’s too broad. Here I’m thinking mostly about something like .sport. Yes, there’s a sporting community. But they tend to identify with particular sports or types of sports. .Sport is just too broad. You might be able to say the same thing about general TLDs such as .web. There’s a role for .web, but it’s something similar to what .info and .biz have now.
2. You price domains too high or too low. It’s tempting to charge a lot for domain names so you can earn more overall. But charge much more than existing TLDs and registrants (and registrars) will pass. On the flipside, pricing your domains too low could also cause problems. If your TLD is cheap it will attract spammers and other bad actors (e.g. .cn). This could lead to search engine penalties for your entire TLD or loss of confidence in users. .Free seems particularly worrisome on two fronts: its price, and it tells web visitors that the web site publisher wasn’t willing to fork over ten bucks for a “real” domain. Kind of like Geocities addresses.
3. You make your TLD too restrictive. It’s important for community top level domain names to have good restrictions to keep the community’s trust. But burdensome and un-automated verifications will doom your domains. First, registrants don’t want to spend time fulfilling your requests. Second, registrars don’t want to bother with introducing a verification system in the registration process.
4. You don’t get into bed with major registrars. In most cases you’ll need to sell your domain names through existing registrars. You have to make best friends with the major registrars. Wine and dine them for shelf space.
5. You offer products that compete with registrars’ profitable add-ons. Registrars make little money on domain sales. They make it offering products such as hosting, whois privacy, etc. If your idea of TLD innovation is to offer a package of competing solutions to the registrant, don’t count on registrars giving you shelf space. Consider .tel. It didn’t offer competing products, but it eliminated two profitable ones: web hosting (because you can’t host sites on them) and whois privacy. GoDaddy still doesn’t carry .tel.
6. You pay too much in auction. If you go up against many competing applicants for the same TLD you could end up spending a lot of money in an auction. Make sure you have money left over for marketing.
7. You think ‘if you build it, they will come’. Registrants won’t be lining up at your door. Consider the significant marketing .co undertook with its recent launch. It’s not easy, and it will be even harder when competing with hundreds of other new TLDs.
8. You attract too many domain investors and not enough end users. If domain investors snap up all of your domain names then few of them will be developed. You need developed domains in order to spread the word about your TLD. Take a look at what happened to .eu. I really like the RFP process some registries are using to allocate premium domains by requiring a solid development and marketing plan.
9. You don’t have a local sales channels for your city TLD. City TLDs will be tricky. Don’t expect GoDaddy to offer .nyc anywhere near the top of the list since it applies to so few customers. (Unless, of course, they use geolocation to pitch it to New Yorkers.) You need a door-to-door salesforce for these TLDs. Same thing goes for community TLDs — the smaller the niche, the more you need to focus on marketing directly to that niche.