Analyst becomes more bullish on new top level domain name potential.
B. Riley analyst Sameet Sinha has increased his forecast for new top level domain name registrations after attending last week’s ICANN conference in Los Angeles.
Previously, he was calling for about 20 million new TLD registrations from 2014-2016, now he’s pegging it at 29 million and says that might be conservative. He estimates top line potential of $900 million during this period.
ICANN recently downgraded its forecast for budget purposes for the fiscal year ending June 2015 from 33 million to 15 million; Sinha’s forecast calls for 5.7 million registrations during that period.
My guess is Sinha is closer to the truth, but even his estimates will require increased registration velocity going forward.
Sinha points to a number of factors in his bullishness:
- Awareness is very low now, and can only improve going forward.
- New business models including vertical integration, premium domain sales, and internet of things create upside.
- Recent private new TLD auctions reaching 8 figures raises the bar, and increases valuation of strings.
Sinha maintained his $15 price target on Rightside (NAME). It currently trades for $9.75.
Rubens Kuhl says
IoT (Internet of Things) generates microscopic demand for domain names. Let’s say there is vendor X of IoT-connected devices; all such devices can use device-serial-number.vendor-x-devices.xyz which will be just 1 domain name sale. Multiply by number of vendor of devices, integration apps, review sites and even then we barely pass 3 digits among all of them.
IoT generates demand for IP addresses, notably IPv6 ones since the Net run out of IPv4 ones, but the number registries are all non-profits.
Andrew Allemann says
I agree that, as of right now, there is little use for second level domain names for the internet of things. I have about a dozen internet-connected appliances, controls and switches in my home. Every one of them is accessed through an app, not a website. Much of this has to do with the desire for them to be not accessible via the public internet (even if they can still be hacked). If they were to be accessed via a website or URL, there’s no need for an individual second level domain for each one. It would be cheaper and more efficient for them to be on subdomains or directories, or even log in to the providers main website with a username and logi.
John says
If history is any indicator all the new TLDs will fail miserably and there will be a sea of registered domains nobody wants to buy and nobody will ever develop but some people will keep renewing them out of stupidity or dreams they have locked up in the domain that they will never materialize.
Want to buy a .travel, .mobi, .pro, .biz? I did not think so. Nobody else wants them either.
I think this “analyst” is full of it.
ruby rain says
Some people have actually started to develop sites on new TLDs. I mean end users. I wonder what will happen to these user’s sites when the TLD registry goes bankrupt? Can a TLD just disappear?