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Should new TLDs be judged as startups or just top level domains?

How you view TLD companies frames how you view their success so far.

This week I received a note along with a press release from a new top level domain name company. The note read:

In less than 11 months, Internet users worldwide have registered more than 3 million addresses in new Internet domains (gTLDs), exceeding even aggressive early estimates.

Cough.

More like “coming in lower than even pessimistic early estimates”. Especially when you consider that about 1/3 of these domains weren’t paid for.

Not many new TLD registries have planned for the typical TLD to have fewer than 10,000 registrations 3-6 months after their launch.

But this got me thinking about how to properly judge the success of new TLD companies. I think it comes down to this question:

Should new TLDs be judged as startups, or judged as a top level domains?

Judging new TLDs as startups

If you judge a new TLD as a startup, you give it more room to breathe. It’s going to take time for the company to find its business.

I’ve been involved with a handful of startups, both as an investor and founder. It’s never easy. The first plan rarely works. Sometimes you’re ahead of the market, sometimes you’re behind the market by the time you launch your product.

For a startup, you expect them to spend much more in marketing than they take in at first. They’re building a subscription business, sinking cash in to create awareness and buzz that will pay off in the long run.

For an IDN TLD startup, they might be ahead of the market in terms of universal acceptance and awareness. They’re in it for the long haul (or they need to be!), understanding that it could take years before they will see if it has all paid off.

When I look at new TLDs this way, I seriously consider investing in and joining one to help them build their business.

Judging new TLDs as just TLDs

Lots of top level domain names have come out over the past 15 years, especially when you consider branded ccTLDs.

Are TLDs just a product? If you judge new TLDs against top level domain names as a familiar, tried-and-true product, your evaluation might be very different. You can judge them much sooner against familiar metrics.

If you take this view, you probably view them as severely underperforming.

If you view them more like startups, you view them as businesses working to find and develop their market.

I think a lot of new TLD operators, especially those that came from the domain name business, view(ed) their companies as just selling the product of TLDs. They might need to change that viewpoint, or at least convince their investors to judge them more like a startup.

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  1. Chris Hughes

    The only circumstance where the latter scenario would make any difference is if you are benchmarking these registries against the likes of .com that could ride the internet boom. Clearly that’s a huge mistake, albeit one that some registry management teams made pre-launch.

  2. Joseph Peterson

    There’s no single valid perspective on these new TLDs. How they’re judged depends on whether you’re

    (1) a share holder tied to the nTLD registry’s profits;

    (2) a registrar stocking inventory to sell on the shelves or the shop window;

    (3) a domain reseller looking to maximize the return on a pre-existing or still growing portfolio;

    (4) a consultant, marketer, market place, forum owner, or blogger receiving income from an nTLD registry;

    (5) a startup looking for a suitable brand name;

    (6) an established company facing new brand protection risks or evaluating new marketing opportunities;

    (7) a consumer facing a more heterogeneous internet with new ambiguities.

    These viewpoints aren’t compatible. Many of us fall into more than 1 category, but nobody has 7 feet equally in all.

  3. Kassey

    I guess most readers of domain blogs are domain investors. For this reason, their perspective is only: can I make money out of the new gTLDs? The answer is very likely NO, because (1) Product-wise they are inferior to .com, yet (2) Price-wise, they are much more expensive than .com, (3) Promotion-wise, most have done little marketing. Three out of the 4P are bad.

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