Joseph Peterson, Branding Consultant and Domain Investor. LinkedIn profile
On Sunday morning we reached the 2 million registered domain names in the new gTLD (generic top level domains) space. I therefore thought it was a good occasion to have some of the sharpest people in the domain industry give their view on the future of the new gTLDs. I must say that I was overwhelmed by the positive response when reaching out to all these busy people (a big thank you for sharing your knowledge). And the quality of the answers is excellent. Personally I learned a lot. This post is full of insights from experts who live and breathe domain names on a daily basis such as Frank Schilling, "Domain King" Rick Schwarz, Adrian Kinderis, Michele Neylon and other prolific authorities in the community. My question to the experts was the following: "How do you see the future of the new gTLDs?" All the big thoughts are condensed here in this post, so grab a cup of coffee, and get more wise on the future landscape of the new gTLDs. To summon up new gTLDs are the new breed of domain name extensions, which mean something on both sides of the dot. The first generation of TLDs were much less descriptive such as .com, .net and country code TLDs such as .fr and .de. Over the last many months you have been able to register domains with a .bar, .ski, .tattoo or .guru. Heck, you can even get domains in 100% Chinese or Arabic for the first time. Until now 197 have been released to the public and hundreds will come out over the next year. Not forgetting the additional 617 dot brands e.g. .nike and .mcdonalds. Anyway, lets get started...Domains registered in the new extensions today surpassed 2 million. Blow the kazoos! Toss the confetti! Or postpone that ticker-tape parade, dismissing such numbers as the specious, hollow, and fabricated figures they truly are. Reaching that misleading milestone provides us an occasion to talk about the future of new TLDs; and that’s a good thing not only because of all the problems, risks, and costs involved but also because of genuine opportunities for brands and individuals online. Otherwise, however, the registration numbers themselves should be largely ignored, except insofar as they teach consumers skepticism! I’ll be contradicted by no one when I point out that at least half a million of these domains are due to registry manipulation rather than real-world buyers. For one thing, the companies managing and selling these new TLDs commonly scoop up tens of thousands of their own domains, often under the guise of shell corporations. They do so, one may imagine, both to pad their numbers and to reserve merchandise to resell later at higher prices. 45,000 domains here, 23,500 domains there -- those things add up! According to TheDomains.com, it was, in fact, 33,500 .公司 domains registered by the .公司 registry itself that pushed us over 2 million just now. Much worse is the brazen charlatanry that continues to be perpetrated by .XYZ, which has stuffed some 375,000 .XYZ domains (and counting) into people’s accounts without their permission, desire, or even knowledge. Yet the CEO of that registry continues to point to domains surreptitiously planted in your neighbor’s trash can as though they represented buyer demand. Indeed, these numbers are bandied about as .XYZ’s primary selling point. And they contribute greatly to the 2 million here discussed. What of the domains actually paid for thus far? Many are due to speculation from individuals hoping to resell domains for profit rather than use them. These comprise a mixture of legitimate domain investment (which I take part in myself) and cybersquatting (which targets pre-existing intellectual property). Such behavior indicates optimism of a kind. But many of those bets are bad bets; and they shouldn’t be counted in the same way as registrations directly intended for branding, ad campaigns, or web development. We’ve also seen extravagantly wasteful, defensive purchases by established companies -- for instance, TDAmeritrade.plumbing or TDAmeritrade.bike. Setting aside such overripe brand protection and the large share of domainer speculation, only a small percentage of the 2 million domains we’re celebrating would have been purchased for use. Of course, it’s the intentions that come to fruition that count. So far, for the new TLDs, those cases remain scarce. So, after 7 months we see 2 million partly dubious registrations across roughly 200 new TLDs. To put that number in context, consumers ought to know that registration numbers tend to spike on the first day of a TLD entering general availability and then crawl forward at a diminished pace thereafter. So the appearance of continued growth is mainly due to the continued rollout of more and more extensions, each of which causes its initial spike as the best domains are quickly snatched up. It’s also worth noting that many domains won’t be renewed in 2015 or 2016. Five days ago, corrugatingmachine.xyz was “registered” to a person in China, whether he knows it or not! Of course, the .COM version is currently available for anybody to claim for $10. So who is going to renew the .XYZ? The numbers undergo a big retraction next year. Meanwhile, .COM and .NET together have grossed between 7.5 and 8.9 million new domains every quarter since 2010. During the last 2 quarters, while these new TLD domain registrations were taking place, .COM and .NET recorded 17.1 million gross new additions on top of nearly 130 million already registered. In other words, .COM and .NET continued to grow 10 to 20 times faster than all new TLDs combined -- and that’s during the initial registration rush. It’s good to keep that in mind. So I’d propose a litmus test. Any company or individual who brags about these 2 million domain registrations in order to sell you something -- unless accompanied by an emphatic disclaimer -- is either disingenuous or else ignorant of what’s going on within the domain industry. In either case, seek advice from someone else! Numbers aren’t what count. Who chooses a domain or a brand name based on tallies from registries? I prefer to evaluate particular projects on their own terms and find the right tool for the job. More often than not, established extensions such as .COM or .ORG will be among the best choices. But most of the new TLDs do suggest applications where they would be a good fit. So what does the future hold for the new TLDs released so far and those yet to come? Most certainly, they will not dislodge .COM from its dominant position. But many of them will be seen in prominent places during the coming years -- in search results, on TV and radio, and as part of brand names. They’ll be scattered, but they’ll be there. Most keyword-specific TLDs are severely limited in scope. Many of us won’t recognize .PLUMBING or .REST as domain extensions at all, simply because we’ll run across them so infrequently. Others will become favorites within small keyword-defined niches. Some TLDs have already failed due to negligible market demand. One or two TLDs not yet released will eclipse all the others available so far -- yet still not catch up with .COM by any conceivable measure. More than 2 decades of concentrated cumulative investment worldwide has established .COM’s preeminence, measured both by consumer acceptance and by the sheer quantity of money poured into building and marketing .COM websites. Neither large corporations nor small business owners have much incentive to abandon their existing online identities in favor of domains that are usually more constrained in meaning and less accepted by the general public. Most adoption of new TLDs will come from newly launched websites and businesses. Yet if all entrepreneurs avoided .COM, always choosing new TLDs like .GURU or .CLUB or .COMPANY or .ENTERPRISES instead, those TLDs still would not catch up to .COM even after decades. They’re competing against one another in a fragmented name space and are already 2 decades behind. In the meantime, consumers continue to preferentially register .COM. That includes my naming clients, who typically begin by insisting on .COM. You’ll hear it said that .COM is outdated. Yet most websites most people visit continue to be built on .COM, including the newest and trendiest among them. You’ll hear it said that all good .COMs are taken or overpriced. But that claim is grossly exaggerated. Throughout one highly publicized auction for .CLUB domains back in February, about half a dozen matching .COMs remained available to one and all for $10 apiece. You’ll hear it said that .COM is meaningless -- that domains suffixes in the future will describe what the website is about. Is that even desirable, though? Ebay, Microsoft, and Samsung enjoy the luxury of a .COM that everybody assumes by default. Would they be improved if they were to rebrand tomorrow as Ebay.bid, Microsoft.computer, or Samsung.tech? Startups want the ability to pivot. Online consumers want fewer extraneous, unfamiliar details to remember. As a namer, I want the flexibility to name something without the TLD getting in the way. I enjoy having a blank canvas, and I don’t want the TLD already stamped on it as part of the brand name. If .COM is meaningless, then that sounds perfect to me! Meaning should reside within the brand name itself and not be limited by encumbrances. It’s important to acknowledge that choosing a name like Charter.voyage using a new TLD didn’t absolve me from the need to register CharterVoyage.com as well. These new TLDs don’t simply create new openings; they also create new costs and risks. Since it will always be undesirable to compete online with another brand that shares a nearly identical and equally viable name, it’s frequently necessary to double a new TLD purchase with the matching .COM. Otherwise, you own only half a name, while the other remains a competitor, a leak, a growing future cost, or a security risk. So, in this respect, the new TLDs do act as a tax on online commerce. And the primary innovation they allow is little more than shifting the dot into the middle and shaving off 3 characters (“c”, “o”, “m”). I do see problems ahead for the new TLD initiative. Registry prices are often obscenely high -- $3,000 or $6,000 per year instead of $10 for .COM. Obviously, that limits adoption. Many TLDs are confusingly similar, which places a large burden on registrants attempting to use them. Take, for example, .PICS, .PICTURES, .PHOTO, .PHOTOS, and .PHOTOGRAPHY. We’ll see a lot of extra costs and enforcement problems, as we always do, with regard to cybersquatting. And I’m afraid we’ll also see a sharp rise in phishing and identity theft, since the new TLDs enable scammers to impersonate reputable companies using shorter, more plausible domains. That said, I do like many of these new TLDs for certain purposes. I’ve never been a .COM purist. Indeed, half my own portfolio consists of other TLDs, including dozens of different vanity extensions. We’ve seen branding successes with .ME and .TV websites; so why not .CLUB or .CAREERS -- each in its own way? If I were to declare my own biases, which I think is only fair, then I'd point out that I don't take a penny from registries or registrars. And, as a relative latecomer to the domain industry, I don't own enough premium .COM assets to give me much vested interest in criticizing the new alternatives. Actually, I plan on developing a few myself eventually, and I wouldn't hesitate to recommend them to clients when appropriate. I’ve left out the whole topic of brand-controlled TLDs, which could prove very significant, assuming companies do more than sit on their trademarked TLD. But I ran out of space and time long ago. We’ll see some ripples among older extensions. Sorry, .BIZ and .PW. You’ll lose from this. Congratulations, .US, .FM, and .DJ! You’ll win. Maybe what I’m most interested in seeing, though, is the future of TLDs in non-Latin scripts -- especially Chinese and Arabic. If there is a success story, it is likely to be Chinese first and foremost, given purchases made by the Chinese government in these new TLDs and the spending power of Chinese domain investors, which so far remains largely focused on .COM. If China shifts its weight from one foot to the other, that will be an earthquake! There will be mistakes and propaganda and success and innovation. Hopefully what chiefly arises from all the publicity surrounding nTLDs is heightened awareness of domains as an important aspect of online marketing. That's long overdue. New Year's roundup to understand the DNA of a successful new gTLD.