Earlier this week, I was at my local Whole Foods for lunch and to do an Amazon return. While walking in and out of Whole Foods, three local business logos / domain names caught my attention. They were all using domain name extensions that were introduced by ICANN during the first round of new gTLDs.
In the same small parking lot in Wellesley, Massachusetts, I saw a .Cool domain name, a .Homes domain name, and a .Solutions domain name. I’ve seen two of the three domain names before. The three letter .Homes url was a new one for me. I don’t think I have ever seen this many new domain extensions used by small businesses in the same place at the same time. If I have, it wasn’t with local businesses.
These types of alternative TLDs have really caught on in the last few years. Local businesses have turned to them as a cheaper alternative to buying a matching .com. They’re also a cleaner alternative than buying an off-brand, long .com domain name that has additional words because the exact one is used or expensive.
As a domain investor, I think it’s neat to see this adoption. Businesses are more willing to use alternative TLDs, and that is helping to fuel subsequent adoption and recall. However, I don’t think the vast majority of these are very investable for me. There are plenty of one-off sales in NameBio that show some extensions could bring strong returns, but I think it is very difficult to build a profitable portfolio of alternative domain names. Of course, I am not referring to the very successful ccTLD extensions like .AI and .IO, for example.
The real money, in my opinion, is in operating the more desirable extensions. That’s a whole other business model I don’t have much of an interest in exploring. I think we are going to see many new gTLD applications in the second ICANN application round that just opened. Many are going to be generic, and the domain names will be available for anyone to purchase at their preferred domain registrar.
