New gTLD

Last week, I shared my gTLD  predictions, and today I want to discuss who I think will come out ahead when it comes to new gTLDs and why I believe they are going to do well. Ultimately, this is about who will benefit financially from the introduction and sale of gTLD domain names.

ICANN – At $185,000 per application plus fees from auctions, ICANN will certainly make a whole lot of money from the introduction of gTLDs. ICANN has also been mentioned in just about every tech and mainstream article about the new domain extensions, and that publicity probably helps the organization that is looked at as the “governing body of the Internet.”

Domain Registrars – Domain registrars such as Go Daddy, Name.com, NameCheap, and others are going to sell a lot of gTLD domain names. Domain registries are going to rely on consumer facing domain registrars for “shelf space” on the registration and checkout pages, and registrars will probably be given solid commissions for sales. I am sure the registrar executives will also receive perks from the registries to ensure good placement.

Domain Registries – The companies that sell gTLDs are arguably taking on most of the risk when it comes to the new TLDs. They have put up the most capital, and they have the most to lose. While I am quite sure there will be a number of registries that lose money, there are going to be plenty that make a mint. I also imagine there will be registry sales to larger companies once revenue streams are established. This is going to be a profitable endeavor for many.

gTLD Consultants – There’s an adage that during the gold rush, the people who made the most money were those selling picks and shovels to gold miners. There are a number of highly experienced domain consultants working with registries and auction houses on new TLDs. Because this market is so specialized, there aren’t that many qualified people to assist with applications, sales, and auctions. Therefore, these specialized gTLD consultants can charge premium consulting fees for their expertise.

Small Business Owners – Assuming Google will rank local business that use gTLDs in its search results, and I think it’s a safe assumption given Google’s own gTLD applications, small businesses will gain from having the opportunity to register better keyword (and possibly more memorable) domain names.

IP Lawyers – There will be lots of lawsuits I would imagine, and the lawyers will be paid win or lose. Lawyers with intellectual property experience who represent brands and trademark owners will be tasked to litigate, and they will make a fortune.

Sales Venues and Auction Providers – A strong aftermarket will help fuel gTLD sales, and registries will need the assistance of aftermarket sales venues and auction houses to hold special auctions.The market is going to get crowded with hundreds of new gTLDs, so these venues should be able to make out very well by brokering sales and holding auctions.

Domain Investors  – As I said in my predictions, I think there is likely going to be confusion and  convertible  error traffic. I also think some gTLD users will want to buy the matching .com domain names and will have to pay domain investor prices. I also believe that gTLD registries will need to have domain investors participate in the launch, and there will be deals to be had and flips to be made as a result. With all of the attention being paid to domain names, I think it will bring new money into the fold, although I think caution needs to be heeded with respect to new investors.

I’ve been investing in domain names for almost ten years, and I don’t believe we’ve yet seen anything that is going to have as big of an impact on our business as gTLDs. Hundreds of millions of dollars will be spent on these new domain extensions, and we are going to see our industry change as a result.

I want to share several predictions for the new gTLDs from a domain investor’s perspective.

• Although the US had more applicants than other regions, gTLDs will be more widely used and popular abroad than in the US. ccTLDs are very popular outside the US, and as a result, people are more apt to look to the right of the dot outside US borders.

• Domain investors will not embrace gTLDs as much as applicants may be modeling, and there will be some TLD registry failures as a result of the projections being inaccurate.

• Owners of the keyword string .com names are going to be very happy. Some registries will feel the need to buy the corresponding .com names and pay a lot of money for them. In addition, there will likely be a ton of error traffic that pays well.

• There will be  anomalous  sales in most of the “good” keyword TLDs that are similar to the $450,000 sale of Meet.ME. The key factor to these sales will be relevance to the keyword. For instance, Insurance.Gay might not be a great domain name, but Dating.Gay would be valuable.

• Within 5-10 years, companies like Affilias and Verisign will benefit from failed registries because they will be able to acquire the user base and recurring revenue streams from “failing” registries. They likely have the ability to manage these TLDs better, and as a result, they can make key acquisitions when the opportunities present themselves.

• A domain registrar is going to patent technology to be able to suggest a TLD for when someone goes to register a domain name. For instance, when someone tries to register CurtainsAndDraperies.com, the registrar will suggest CurtainsAndDraperies.Shop along with premium registry held names like Curtains.Shop.

• Popular registrars are going to make a lot of money with new TLDs. There will be massive competition amongst registries for “shelf space” on the search page, and that will lead to strong margins for registrars on newly registered domain names and premium domain names.

• There will be many deals made before registries go to auction, and there will be very few auctions. I can see some companies making millions of dollars by dropping out of the running instead of gambling with an auction.

• Although there were many, many brand applications, I don’t think we will see many brand .TLDs used in marketing for a long time. I believe many brands sought their TLDs for defensive measures instead of for marketing purposes.

• Companies with domain industry ties, like Donuts, Radix, TLDH, STRAAT, and Uniregistry (among others), are going to do very well with their TLDs. They know the business of selling domain names, and they should be able to translate that experience into gTLD sales.

• Companies are going to spend hundreds of millions of dollars marketing their new TLDs, and that will lead to more awareness of domain names and domain investing. It will also bring new money into the fold, and there will be a lot more inexperienced people who think they can get rich quickly by buying and re-selling domain names.

• There will be lots of litigation.

Please share your predictions if you’d like.