Opinion

Opinion: How New gTLD’s Will Affect Current TLD Values

Recently I’ve had a few people ask my thoughts on how the introduction of new gTLD’s will affect values of existing TLD’s so I’m going to share my thoughts in this post.

First of all, I think this process is still going to take longer than many people realize. Sure, applications will start in January and by 2013 you may be able to start registering these new TLD’s that have been approved and successfully implemented in the the DNS system. There are however, many hurdles that still lie ahead before this happens as Kevin Murphy points out in this interesting article he published recently. I expect to see more setbacks, glitches and legal battles that will draw out this process for years to come. This does not mean the those applicants that really have their ducks in a row should be too worried, just prepared.

How will new TLD’s affect .COM? I’ve said this many times to domain investors I’ve talked to over the last few months. I believe that the value of .com domains will really begin to soar over the next 2-5 years and will continue to rise for at least for the next 15 years beyond that during the ‘consumer confusion stage’.   This mass confusion will make new and existing website operators really consider paying top dollar for the .COM they want.  I think it will take at least 15 years before .whatever’s really start to dilute the value of .COM.  Another bubble? Maybe.  I hadn’t really thought of this, but when Rick Schwartz said that new TLD operators need the .com counterpart to their .whatever on his blog, that really made sense.. duh!

The affect on .NET? Tough for me to say this but I think that the introduction and marketing efforts of .CO has already hurt the value of .NET and I think new gTLD’s will offer more brandable solutions than .NET domains. In short, I think .NET is the biggest loser in this whole deal.

.ORG – I believe .ORG domains will at the very least hold their value but will most likely see an increase as well over the next 5 years.  I read somewhere that .org will probably be vying for the .NGO TLD (could stand for ‘Non Governmental Organization’).  I wonder what they would do with it if they won it?  Probably be best if they didn’t even open up registrations to the public.

.TV and .BIZ – I have been fans of these TLD’s for a long time and I believe their values will rise significantly as new gTLD extensions continue to grow.  These two specific TLD’s are extremely recognizable words and are already established in both the domain and business communities. Which will do better?  If you know me you know my answer.. .TV!

.INFO and .CO – I think these TLD’s will continue to operate in large numbers and have their loyal users.  I don’t see the value of these TLD’s rising because of the new TLD’s, I don’t see the value falling drastically either – of course, there must be value in the first place in order for it to fall.  You could use some of the same points I mentioned about TV/BIZ above to argue with me on these extensions but I’m writing from my gut here.

ccTLD’s – I don’t have a clue.  This is really tough to predict and I think a lot of it has to do with how country and city TLD’s are distributed.   I definitely don’t think that countries with deeply entrenched ccTLD’s will see many website operators jumping aboard a new country TLD or even worrying about securing their name + .country but they may look to expand to city TLD’s.  With more options (eventually) I could see new companies and startups utilizing something like .CANADA instead of paying a premium for a .CA.  Honestly though I really don’t have an opinion on how this will play out.

Sponsored TLD’s (.JOBS, .MOBI, .TEL, .TRAVEL) – Well, I do think that since these TLD’s are somewhat established in some markets and part of the general public knows they exist already, that the new gTLD’s will push new investors to start picking up more domains with these extensions, ultimately increasing their value in the eyes of some.  I personally think they will be worth what new hand reg .whatever’s will be worth, which is not going to be very much.

Thoughts?

 

About the author

Mike

12 Comments

  • Slightly different case as it’s well established, but I doubt the .org people could care less about not owning org.com.

  • If i may disagree with you on .co.
    I do see .co more valuable then .net in the years to come.

    Definitely there will be confusion with the new gTLD’s.
    If .mobi .travel .Jobs etc did not have success then definitely 99%of the new tld will fail,wich will bring the value of .com higher,like you and Rick,Frank and the hole gang said.

  • Rich – How do you judge success of those extensions you mentioned? I did not say they were not successful, I am pretty sure the .mobi, .travel, .jobs registries have made enough money through selling registrations that they are well in the black. Just because they are not mainstream does not mean they have not been ‘successful’.

  • Agree with all above except for the .TV and .BIZ statement. On the oceanfront domain scale, those would be considered warehouse district or slum. Not desireable property. Not a good neighborhood. I don’t see them as a viable alternative to .com at all; and, if you were to promote a domain with one of those urls (and any gtld, for that matter!), you will only be helping the owner of the .com equivalent.

    Lesson learned, if you don’t own the .com version of your name, you will soon wish you did so why not get it right away?

  • [email protected]
    .tel sold 300k domains in 6 years,is that success?
    .mobi sold 1 mill in 6 years,no dought that they are ok but not success. Their numbers are going down,premium domains are in the 5 figure .mobi $2.99 registration fee.
    “.jobs has not made much of a splash — since 2005, only 15,000 have been bought by employers, and the .jobs TLD is widely considered to be a disappointment.” ere.net.
    .travel 6 yrs in business,i could not even get a number on how many domains they have sold.
    Like you said “they are not mainstream” and if they are not the mainstrem, that’s not success to me.

  • I agree that value of .com names will spike in the short term. But, the timeline for erosion will be shorter. People, and markets adapt more quickly than 15 years. I think its very likely that type in traffic will diminish, as people learn more often than not they don’t get the desired result. They will resort to search more often. The default moves from .com to .google.

    No single TLD will challenge the volume, or prestige of .com but collectively, the numbers will be great. There will be adoption and use of some new gTLDs to a large extent. It’s being seen already with .co and also just recently with .xxx. Large brands, and established online businesses are already moving to alternative extensions, and dedicating great resources to do that. As users and consumers grow more comfortable with noncoms, the acceptance will accelerate.

    I think good .com names will be valuable for a long time. But the reign of .com as KING is limited, and will ultimately be reduced to one among a court of nobles. The notion that all new gTLDs will be .FAILURES, launching .com to even greater and greater heights is probably close-minded. Demand, pricing, and market pressure won’t allow that.

    The only constant is change. People adapt, it is the distinctive human trait.

    jmho

  • PS: Everyone has to remember that there will be massive advertising on a global scale for many of these new gTLDS. And then watch what happens after the dust settles.

  • @David and @Tom G – Thank you for sharing your thoughts!

    @dotcom Mike – Your example of slums vs oceanfront property analogy when comparing .TV to .COM is not the same analogy I would use but it is essentially correct. Let’s look at the .TV sales I reported on the most recent .TV Spotlight post:

    How.tv $11,000
    Location.tv $8,146
    Say.tv $5,000
    Munich.tv $5,000
    Pro.tv $15,000
    PO.tv $3,500
    ND.tv $1,850
    RB.tv $9,500
    QA.tv $10,000
    MM.tv $4,500

    These domains sold for a fraction of what the .COMs counterparts would pull in if they were auctioned off tomorrow. I am not saying .TV is going to challenge .COM. However, I do think that .TV values will rise as the value of .COM’s rise. There is a lot of room for growth, it’s my opinion that .TV will start to close the gap and experience much larger sales averages in the next 10 years than it did in the previous. *BTW I am pretty sure 80% of the names in that list above were sold to investors/resellers.

    @Rich – I don’t expect any of the new gTLD domains to go ‘mainstream’ and I doubt the applicants have those type of expectations. They are not getting into this thinking they are going to dethrone .COM. They are getting into to make money though and many will. I can’t possibly predict the percentage I think will fail at making money, but I’m pretty sure it won’t be 99%.

  • Evaluating this topic in a vacuum is missing the bigger picture. Yes, the value of these TLDs will partly be based on their own merit, however, there are some other important powers at play here. The biggest being browser technology and its integration with search.

    Google started it with Chrome and the rest of the browsers are following right behind. Within a few years there will no longer be a URL ONLY field on browsers. In essence it will all be search. Now think about real-time search results (in browser field) as Google does already and guess what happens to direct type in traffic … bye bye.

    The end result of this technology is that web navigation will be solely dictated by search and thus content. In a content driven world TLDs are far less important. Doesn’t matter if you have a .com or a .poop, the one with better content will rise to the top of both the real-time and full search result.

    Other factors that are may make extension even less important are sub-indexed search results. This is already happening and it makes using a search for everything more compelling. If you type in a word or even a site like “IBM” the search returns the main site along with the most popular sub-pages within that site right at the top. Functionally, from a user experience standpoint, this kills why anyone would want to type in a domain into the URL only browser field.

    Personally, I think all this “confusion” we are talking about will only expedite the migration to search engine in full. It is the only real solution for the everyday user since they really don’t understand what a TLD is anyway. The end result for TLD values is likely a wash and will eventually be dictated on the content for the domain rather than the domain itself.

  • Hi Tony! Thanks for adding your input. You make some strong points but I will respectfully disagree that search totally kill direct navigation. As long as people still have their content on a website they own, they will continue to market their website name. Even if Google Chrome turns the URL bar into a search field it will not stop people from naturally typing .com or .TLD (as they see on a commercial, etc). Yes, many WILL simply use search but that doesn’t mean that having a strong domain (and TLD) is not important for branding. Companies spend a lot of money on branding.

    I actually think that this whole right of the dot craze will see marketers putting even more emphasis on the domain. People will be talking more about domains than ever before, all of the sudden they are creative and not the same boring com/net/cctld. Commercials (print, radio and TV) will market brandable names like free.stuff, live.music, play.sports.. of course along with the existing and most popular extensions – it will probably be quite a few years until .COM is not the most used phrase in the world.

    Not sure I understand why sub-indexed search results would kill direct navigation? In fact, I don’t see why this wouldn’t actually increase it. There are so companies and brands in the world (with MANY more to come) that already share the same words or phrases. If sub indexed results pull up all of the most popular companies results and that is all you can find on the first page of search results don’t you think it may drive people start typing in domain names to get to their destination? Search can’t always find what your looking for, it does a damn good job but still there’s only so much that can come up on the first two pages of search results. Until you actually plug a computer into your brain and it can read your mind I will argue that search will become only way people navigate to their destination online.

  • Hi Michael! Hope you have a wonderful time on the DNCruise. Wish I could be there also as it is a fantastic event. Please do say hello for me to Patrick and his wonderful family. Unfortunately, we are on a tight development schedule and need to get things rolling for the 4th quarter.

    As for this topic, yes I think we just have to just agree to disagree. There are good arguments for both sides. And for subindexed searches in a single browser bar world, one wouldn’t type in the extension to get the full subindexed search result. Take the search for hexonet.net verses hexonet in Chrome. The first one will take you to our site immediately, the second one will return a search with direct links to our pricing, our main products, and our contact page. This subindexed search result according to Google is based on clicks so they are the most desired pages on our domain. This was my point, that searching without extension is faster and may be more useful.

    One of the other factors for me that is effecting direct type in traffic is security. With search based navigation there is an added level of security. Google, though not perfect, does filter out bad sites and domains. Personally, these days, I navigate almost exclusively the web via search or saved bookmarks. Yes I have booked marked nametalent!

    Anyways, interesting topic and we will see what happens in the coming years. If you are correct, a couple of cold ones are on me next time we meet up. Take care and safe travels.

Leave a Comment

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.