New gTLD

I read a press release from Sedo today about the company’s recently launched Internet Domain Name Index (IDNX), and I disagree with one of the observations that was made.

According to the press release:

“The bigger the better. The .com extension, which targets the entire world, has outperformed regional champions. Even successful country-code Top Level Domains (ccTLDs) like .co.uk and .de have not kept pace with .com since 2008. This casts some doubt on the viability of new regional TLDs that have been proposed, such as .nyc (for New York City).“

My issue is that I don’t think a new gTLD, especially regional gTLDs like .NYC or .PARIS, will need to keep pace with .com to be viable. I happen to think that with a local marketing campaign, awareness efforts, and some development by local businesses, people in New York City will know about .NYC, and local businesses will purchase .NYC domain names.

As a result of these efforts, the gTLDs will be purchased locally, and while they certainly won’t sell at the same pace of .com, they will sell. From my perspective, they don’t have to sell nearly at the same clip as .com to be considered successful, let alone viable. With the right price structure and smart management, many niche gTLDs can be not only viable, but also profitable.

Antony Van Couvering is CEO at Top Level Domain Holdings, the company that operates gTLD consulting firm,  Minds & Machines, and he is also CEO of dotNYC, a group that hopes to win the rights to manage .NYC. I reached out to Antony Van Couvering for his feedback on the viability of niche gTLDs in light of the press release.

“Sedo makes some good points, about management, about “me-too” not working, and so on. Conceptually, though, it’s hard for people to escape the .com model in measuring success — that measure being naked volume of names under management. Obviously .com is successful, and its enormous volume makes it so, and I agree with Sedo that it will be along time, if ever, before it is surpassed on that score. But to say that “this casts some doubt on the viability of new regional TLDs” is like saying that Apple can never succeed because Microsoft is so entrenched, or that Armani is doomed because Wal-Mart is so big.

The point is often made that that not all success is monetary, and .cat and other “public service” TLDs are brought into evidence. Even from a financial point of view, however, a small TLD can do very well. If .CPA is sold to certified public accountants at $200/yr, it doesn’t take many to join before that’s a great business, especially with a better cost structure than incumbent registries have.

In the United States, .com is habitual (which is not the case in the rest of the world). New gTLDs in general will break that habit, because people will begin to ask themselves, “what’s the extension.” Once that happens, people will begin to examine the extension on its merits, instead of just relying on .com as a universal. Once any one of these new gTLDs, because of great marketing, a compelling bundled application, or some method, challenges the “habit” of Americans to just type .com after a name, the game is wide open, and people will begin to look at the meaning and use of .com instead of just its ubiquity.“

I welcome your thoughts on this topic.

At the conclusion of the sunrise period for reserving .XXX domain names, the ICM Registry reported that they received over 80,000 applications. In order to apply in the sunrise period, an applicant needed a trademark and about $200 (per domain name).

The .XXX landrush, which began on November 8, is less restrictive and may be less expensive. Applicants don’t need a trademark, and the application fee plus registration fee is generally less than $200. The application fee is non-refundable, and if more than one application is received, the domain name will go to auction.

The major difference between the landrush and Sunrise B is that landrush applicants can use their .XXX domain names, while Sunrise B allowed applicants to prevent their trademarks from being used by anyone.

I think it will be very interesting to see how many landrush applications are received. In my opinion, the non-refundable application fee may be a  deterrent, since that is a sunk cost whether you are the winner or not. If you’re paying an average of $75 per application, it’s going to cost $750 just to have a chance to get 10 names. With Sunrise B, even if an applicant shared a trademark with another company or organization, the applicant would be just as happy if the application was awarded to another party, since that would mean the name wouldn’t be used.

All that said, I am curious about how many landrush applications you think the ICM Registry will receive. The landrush period ends on November 25.

There seems to be a considerable amount of uncertainty for many brands as it relates to gTLD domain names. The application process may be cumbersome, the marketing aspect is confusing, and the technical aspect would be complicated for non-tech people.

These are just three issues that brand owners and managers must consider when it comes time to decide whether or not to apply for one or more gTLDs.  Business Week addresses many of these issues, and it’s been fascinating to watch from the sidelines, as the Internet and domain business evolves and changes.

Some large companies are certain to apply, while others are undecided. One thing is for certain – hiring a knowledgable gTLD consultant / expert is something brand managers and gTLD applicants should do, whether or not they are planning to apply for a gTLD.

Just today, interactive advertising and media publication,  ADOTAS, recommended appointing a gTLD expert for companies interested in gTLDs. The organization also offered some other important tips as well. In my opinion, all of their recommendations can be carried out by a gTLD consultant.

Companies like Minds & Machines,  Right of the Dot, and Sedari  are three of the primary consulting companies for gTLDs. These companies can help brands evaluate whether or not they should apply for a gTLD, how they would operate and manage their gTLD, and possibly how they could monetize their gTLD if they choose to sell domain names to consumers or simply wish to monetize their websites.

Minds & Machines, Right of the Dot, and Sedari have experts on staff who are very familiar with ICANN policies, registry and registrar relations and operations, and other important aspects of managing a registry.

Personally, I don’t think operating a gTLD is for many companies. It may be unnecessarily expensive and not productive. However, there are many companies that will benefit from a registry, and a gTLD consultant can help a company decide if a gTLD application is a good idea, and if so, how to move forward with it.

Today is a big day for the ICM Registry and its .XXX extension. The 17 day landrush period for .XXX domain names begins today (November 8, 2011). Eligible people and companies can visit their favorite domain registrar and apply for their preferred .XXX domain name(s). Should more than one entity apply for the same name, an auction will occur at a later date.

Starting today, .XXX domain names can now be applied for by people and companies in the “adult sponsored community,” which includes people or companies who provide adult entertainment, representatives of those people or companies, or people and companies who provide products and services to adult entertainment providers. Adult domain investors are considered providers and can participate in the landrush.

Here’s more information from the Registry:

“The Landrush period will run for approximately 18 days starting on November 8, 2011. During this limited period, only those members of the adult Sponsored Community can apply for .XXX domain names. Apart from being a member of the adult Sponsored Community, there are no trademark or pre-ownership rights requirements during this phase of the launch.“

If you are thinking about applying for a .XXX domain name or more, check out DNW’s .XXX price list to see where you can get the best pricing. Personally, I think some registrars are going to make a mint from .XXX. It seems that the application fee in most cases is non-refundable. If 20 people apply for the same name, and the application fee is $100 on average, that’s $2,000 just in application fees… Not too shabby.

Once landrush has finished, the next opportunity to buy .XXX domain names is during the general availability phase, which begins December 6, 2011.