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.
Nicely thought out Elliot. I pretty much agree with everything you rationally pointed out. One thing is certainly true, the lawyers will be happily busy the next few years.
I don’t think new .tld’s will sell for $10 or less like .com or other extensions. The corporate ones who cares, they are internal, but others I would be worried, as domainers seem to be giving most of these new extensions the cold shoulders, lets face it, they do the leg work, buy, hold, market, and resell, this allows registries to keep collecting cash in the mean time.
There is going to be some premium phrases to each extensions, they are not going to sell for reg fee, so yes you see money thrown around, but these people can afford to gamble a bit, and they are not betting the farm, so win win either way, if .com comes out ahead, they win as well.
What does gTLD stands for?
Shane just made a great post on the reasons why the new gTLDs (at least most of them) will be a failure:
I especially agree with the question: “What if the TLD is not successful? Will it close and will you lose your domain? Who will run the failed TLD? Who wants the loser?”
IMO you can build a business on a new gTLD but who will guarantee you that particular gTLD will be available for the years to come?
So far, we have been looking at gTLDs as strings whose existence on the Internet for the (remote) future we have taken for granted. But now we’d better look at these new extensions more like domain names (that might be dropped at a certain point) than TLDs as we know them.
Insightful comments, Elliot. I especially note your point about brands making defensive moves. Could there seriously be a business plan at SC Johnson for using .AFamilyCompany? That one fairly screams “defensive application.”
On the other hand, I’m impressed by L’Oreal. Their list of more than a dozen TLDs looks to me like they mean it. On top of .Garnier, .Maybelline, .Lancome, and the rest of their brands, they’ve applied for .hair, .makeup, .salon, and more. This looks like a non-tech company that really grasped the TLD potential.
I will be intrigued to see how many dot-brand applicants drop out now that they can see no one else applied for their brand.
Well done, Elliot
Very nice summary. I particularly agree with the point about the international use of some of these applications.
IDN investors are deservedly optimistic after seeing all of the .COM IDN transliterations that Verisign applied for.
Generic Top Level Domain
Very nicely written and I totally agree. Great to see some well written opining here. Can hardly wait to see what is around the corner next….Kev
– Some of the New gTLDs will become very popular with the general public and business owners since they will have a lot more choices for when they want to get a domain for their business or personal use.
– The domain aftermarket will be greatly affected once some of the big brands like Google start giving people free registrations. Only domains that have already been turned into money making websites will have value, we might never see those million dollar domain sales again.
– Most domainers will stop warehousing thousands of domains and will concentrate on developing their best domains.
– In the near future ICANN will most likely lower the application fee from 185k to something like 5 or 10k , it will become a lot easier to obtain and operate a New gTLD and so we might see thousands of them spring up in wave after wave.
– In a few years once all the popular brands, geos, and generic keywords have become operational as New gTLDs then people will intuitively combine what’s on the left side of the dot with what’s on the right side of the dot as a new way of searching on the Internet.
Great post, Elliot. Personally I think all the gTLDs are going to do is muddy the Internet with confusion. This was only a money making scheme that those on top will benefit from. Capitalism or greed? I guess the line can be easily blurred.
One more prediction:
There will be many auctions held for the New gTLDs which will result in several 7 and 8 figure sales for ICANN making the total revenue produced by the New gTLD program for the first round to exceed half a billion dollars.
@C.T. Thank you.
gTLD = Ex. Poor.Unlce
TLD = Ex. PoorUncle.com
ccTLD = Ex. PoorUncle.US or PoorUncle.co.US??
Is there anything else??
Now you know why I am poor…I had been reading domain blog for half of my life..and still don’t know the domain basics. hahaha
did someone say litigation? 😉
Spot on predictions Elliot, its going to be a very interesting time for the domain industry in general. Do you think its likely for various applicants to join forces before the auction to have a chance at competing against google and amazon in extensions such as .app, .web and .blog?
I think that is likely.
There will be a Robert Cline for each new gTLD…and our heads will explode
Great post Elliot!
If there will ever be a .web, i will buy some as for the rest,not interested.
@ojohn you could not be more wrong, to start an gtld, it is not simply about paying a 5-10grand application fee, you need much more capital.
It will not be long before someone scams someone out of some money using a random gtld to cover up for a legitimate .com this which cause panic among the general public, .com has been exhausted, that is why they are opening these up, still 2 years ago, and lots of hurdles to jump through.
Failure of GTLDs means Aftermarket opportunities IMO. A quick look at our recent acquisitions proves how strongly we feel about the opportunities to come.
BTW I agree that out of frustration users lost in GTLD decision land will turn to .coms meaning click income for select .com holders
“Companies with domain industry ties, like Donuts, Radix, 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.”
Who are they going to sell these gTLDs to?
The speculators will be stretched SOOOOOO thin with probably 100+ new gTLDs sharing the same launch date, there won’t be any buyers therefore there won’t be any resale market.
ONE BIG WASTE OF TIME AND MONEY.
TM owners will buy or prevent registrations but end users are not going to be buying these new gTLDs at least not in any quantity to move the needle on ANY new gTLD from ANY registry.
There. I said it. I see no reason to EVER change my prediction.
Good luck suckers.
If I may add one point, some companies will also use their gTLD as advertising, for example the French web hosting company OVH that applied for dot OVH plans to release the domains for free
I challenge the average web user to remember or even think of all the possible extensions that might serve their search need. YET, the question becomes if the search engines will reward the new TLDs as more relevant, and therefore kill some aged .coms. Seeing that Google is hoping to buy some, I can only guess that this will be the case.
I forsee complete web domination by Goog, etc. as they have the money AND the actual technology that people use to find sites. Conflict of interest anyone?
My predictions are as follows:
1.) Many of these proposed GTLD’s will no doubt be approved. As already shown today, there were a lot more applicants than was expected.
2.) The first to see real-market benefits will be the large corporations (apple, walmart etc)
3.) If you’ve ever toyed with the idea of pursuing trademark law as a career, now is your time.
4.) A massive increase in .com values.
5.) A significant decrease in .net and .org values.
6.) A steady increase in .me values.
7.) Massive profits for registrars.
8.) Substantial losses for “newbies” in the domain industry.
9.) Substantial gains for experienced, established investors.
10.) Eventual, substantial changes in search engine algorithm technology. Perhaps even a paradigm shift.
11.) An absolute plethora of new gtld service and consulting companies will be born, starting today.
12.) A slow, yet steady trend of professionals exiting the domain investment space, and entering the development and consulting space.
13.) A massive increase in parking revenue as a result of a jump in consumer typo traffic.
14.) Followed by a slow, yet steady decline in parking revenue due to 3500+ gtld’s floating around the Internet due to dilution. Consumers will be more dependent on search engines than ever imagined, rather to continue to try and “guess” what the hell is right of the dot.
@Rich, can you explain for me the appeal of .web? I think it’s a 90’s relic, even more vague than com, and I don’t understand why anyone would want it. Enlighten me?
gtld concept = .Stupid
I got the feeling today that this gtld rush is just like buying short and generic .com’s in the mid 90’s. This is a one chance window to get some potentially good right of the dot real estate. I still think most of them will fail or not do well, but for those with the money to participate it’s a chance to open a new chapter of the web and try to make something of these new gtlds.
I think that .web is a very intuitive extension for all things on the internet, people still call it the web whether you’re mobile or pc. Another one that might do well is .app
Interesting predictions all along.
I think that in a few years we will see an end to all type-in traffic. Since people will never know what the extension of their sought-after product could be, they will rely more heavily on search engines. Hence, those speculating in typo domains should drop them in the next few years.
If it goes as ORM 101 suggests and Google starts giving preference to their own extensions (which is not out of the question considering Google’s history of expansion into new areas), there will be an opening for new unbiased search engines.
In a future market, with people completely reliant on search engines to find the product they want, Google must prove more than ever that they can be depended on or they will lose their throne.
Apart from this I think it is extremely difficult at this time to predict what is going to happen, but in my mind there is no doubt that this is a paradigm shift, and I think it is likely that fifteen years from now the dominance of the .com will be remembered fondly as something from the Internet’s early days.
” @ojohn you could not be more wrong ”
Well that’s why these are called predictions, they should not be taken as facts, They might become facts in the future, but we all have to wait and see.
My gut feeling is that the overwhelming majority of new registry domains will fail. Is Google going to displace pre-existing developed .com sites in search results with new gTLDs? Yes, there is always paid search, and some sites could catch on, but the dominance of .com domain names is deeply ingrained. The new gTLDs are going to confuse the heck out of people. Anyone over 60 is going to descend immediately into a vegetative state. I say this after spending 40 minutes on the phone with my mother the other night trying to help lead her through the process of re-setting her password for Amazon.com. There promises to be lots and lots of litigation, and companies are going to have to decide how many domain names with their name in them in different extensions do they really need to have to protect their brand. This really is a full employment plan for domain name attorneys, so for that, I guess I should be thankful, but I cannot help but feeling that ICANN is screwing up the Internet.
(Just had a discussion on this with a client who is weighing options over whether to buy a key generic keyword .com or invest in .gTLD application. ) My opinion is that when it floods people head for the high ground. That high ground will be .com domains. I believe that they will become stronger, and more valuable than ever before as the surge of other gTLDs continues to add to the prestige of being the .com owner. For a real world example simply go to an antique auction or hit Ebay. People pay for rarity and prestige and they always will. That alone makes .com the safest bet you can make here.
A little late for your client to consider investing in a gTLD application since the deadline already passed.
Remarkable that the most succesfull company in the whole space, apple only applied for one TLD, even more surprising because they spend millions on domain purchases on a regular base.
@Elliot They are talking a “phase 2” application vs buying a domain now.
Do you think that raised awareness of TLD’s and what they are (from the view of non-professional domainers) will impact our 11 year old friend .INFO? It seems .info is contextually close to the the new TLDs like .HELP, .DATA, etc.
You can still get “near prime” generic .info’s, many of which are nicely aged with PR’s of 1,2, and even 3 for $12 at Godaddy auctions and closeouts. Perhaps the .info ship will (finally) rise with the tide?
“Phase 2” could be several years away.
@ Elliot. Technically this is a person that is in negotiations to buy my clients domain and gTLDS are just one of their concerns. I was just trying not to saddle you with the details.
I agree that this will confuse the hell out of people.
My current and long-time position is that gTLD’s should not exist. TLD’s and ccTLD’s should be the only way to go.
However…if ICANN wishes to go this route, why don’t they restrict gTLD’s to brand names and trademarked names only?
I have no problem with companies grabbing their own gTLD to build their own mini-internet but having sites such as…careers.coke; AirJordan.nike; flyer.walmart. These companies will be able to control their message and consumers will trust whatever is sitting on a .brand gTLD
But generic terms should be off limits…
I mean, aside from some obvious terms (like dating.gay; rental.car, NewYork.hotel) what is the use for some terms that do not fit in with the generic gTLD’s (like pizza.gay, shoes.car, InkCartidges.hotel)? And will the operators approve/deny every single registration or will it be wide open like we have now with the TLD’s?
So to summarize, I see no problem with Brand owners getting their own gTLD’s, but generic gTLD’s should never be allowed.
How much do you see Verisign charging to operate the registry for a gTLD, in terms of a fixed fee in addition to per domain name?
I just have to say, this is REALLY going to screw up the internet. It’s not the type-in traffic that is going away, but those sites that rely on search engines for all their traffic…expect search analytics to change in a very big way and for many websites to get lost in the sea of new gtld sites in consumer searches. It’s going to get confusing for those consumers as well, and when people get done searching they start direct navigating. Most will end up at a .com it’s simple math, no big mystery there.
As a successful domainer I can tell you based on 15 years of experience that all of the prime generic .com namespace just got a huge boost in future traffic and end user value. No matter how hard they try to recreate the miracle, their is only one .com and you are witnessing the power of that desire to have it compell these idiots into wasting all their money on this gtld crap. Their already are tons of other extensions available online, and they already drive traffic to the .com domains – so don’t expect this WINDFALL for .com owners to be any different.
I think many of the people here do not have a correct focus. Many people will use this new extensions because they are neat and because the options in .com are gone. These names will be $50 or less and this price difference between .com secondary market is 100 fold.
Secondly, this new names are not for you and me but will be very appealing to future registrants. I see cctld hacks all the time and the new companies who get these new names don’t have same hangups about .com like the old people and domainers.
.COM will always be the big SLD extension but anybody who doesn’t think this is going to fray the edges of .com and the com base, is kidding themselves – or drinking their own supply.
@ Elliot, do we get a prize if our predictions come true. 🙂
Here are a few more predictions:
Although there are only a handful of City TLDs in the first round, but geo TLDs in general will become some of the most popular and widely used gTLDs in the future. Almost all major Cities will end up having there own TLD and as a group the City TLDs will have the most number of registrants next to some of the famous brand TLDs that might give away free registrations.
ICANN should take extra security measures since there is a strong possibility that fights might break out in some of the future meetings and conferences. (don’t say that you weren’t warned :))
For the next five years we are going to see a lot of people in the domain Industry putting the New TLDs down and saying that they will fail, but some of the very same people who are objecting to the New gTLDs will end up being major players in the new era of Internet once all the dust has settled down.
PS: Elliot, it would be nice to have a blog post to see what gTLD related domains people have registered in .com
Let’s be honest here folks, this is all about MONEY and ICANN making alot of it. No dreams of would be new pioneering GTLD domainers is going to change the reality that other .anythings have already failed miserably while .com has only strengthened and continues to see growth. At the end of the day ICANN is filling up it’s bank account and those with too much money and not enough business sense are wasting it on these “new” domains. Sure a few will change hands for some money like anything else but that is where it will end, other than a company pouring money into branding and marketing one of two of them there still will be no substiture for top generic .com domain names. I agree with many above that the value on good .com domains just went up! You can’t fault ICANN for wanting to take these peoples’ money, and am I the only one here who thinks these fees they are charging are outrageous? Look forward to alot of hype about GTLD domains and not much substance as per the usual in the domain world. We might even get to see Rick or someone else in the industry you fools worship “sell” some random one for mid six figures once things get rolling with the domains, even if it is just another publicity stunt. (for those who know their history with a certain .mobi lol) What .mobi sites have you visited today? Or .me for that matter? Exactly. GTLD = FAIL.