Watching the news this morning it was hard not to feel bad for our friends the Greeks. Yes, their leaders made some unwise choices. Perhaps they don’t work the same hours, or with the same zeal as their Northern neighbors. Too many Greek countrymen work for their government, effectively draining the public coffers rather than contributing to the real economy and growing the national pie. Looking over these Southern Europeans roster of sins, their greatest crime (and likely the biggest thing that sets the affairs unfolding in their Country apart from those in your own) is that the unfortunate Greeks don’t have sole control of an elastic and universally accepted reserve currency to paper over their ills.
Greece was not the first Country to paint itself into such a corner. Zimbabwe, Weimar-Germany and Ancient Rome all lived beyond their means, only to go down in flames amid a great deal of financial turmoil.
While you can argue the fiscal underpinnings of the US and its Dollar are not a lot better than those of Greece, it’s still possible to pass a US dollar anywhere on Earth and find some acceptable measure of value for it. Good luck trying to get a more favorable rate of exchange or a more willing counterparty to exchange with when you hold Euro, Pound, Yen or Yuan notes. For all the handwringing about saving vs. spending – Austrian economics vs. Keynesianism – it seems that Keynes followers are “winning” like the Charlie Sheen. No need to worry about the future, because “In the future, we’re all dead!”. The system however flawed, continues to work, until the “7 gram rocks” catch up to you.
For me, today’s snapshot of currency pecking order rhymes with the domain World. . COM is the gold standard. Universally accepted and used. Close behind are CC TLD’s; issued and minted by the Country you live in. There are regionally vibrant alternative TLDs like .net, .org, .TV .biz, .me and .co. – some of which are CCTld’s, well marketed and visually appealing as gTLD alternatives. I liken this bunch to currencies accepted in certain instances – like Yen would be accepted in Hong Kong and Korea or Canadian Dollars would be accepted in the northern US states, close to the border.
How did we get to this point where .COM has such dominant reserve-like status?
When I started using the Internet in 1993 .COM was not dominant. Most of the “content” was on .int, .mil, .edu and .gov sites. You found pictures and other information on the CCTLD of the country you lived in.
Those not old enough to recall that era should know that I worked for a small ISP in 1995 (I still kick myself for not “getting” domains back then). Site visitors of the day positively vilified us for trying to sell products and services on our homepage. We got hate mail. The Internet’s early (mainly technically purist) visitors heaped scorn on our little company for using the Internet to try to “conduct commerce” on our website. We were denigrating the very fiber of the Internet’s intended purpose by trying to market a product or service. “Everything online should be free!!” or so went the refrain. The negative zeal toward commerce was almost anarchistic and reminds me of early days selling domain names, when all re-sellers of high-quality generic names were labeled with the scarlet letter – “S” for “squatter”.
As “S” (for silly) as this early moment sounds, it was real, and it wasn’t until large familiar brands started to move to .COM for “Commerce” – as in – “All you technical wonks dumping on me for trying to “SELL” something online, take a chill pill and back-up, because I am using the DOT C-O-M-M-E-R-C-E.”, that things got better. I remember Yahoo and eBay starting the trend and getting flack and negative press from those same anti-commerce techies. Slowly other established household brands woke up. McDonalds put up a placeholder inviting passers by to “click here for a picture of the BigMac”. Burger King did the same for the Whopper. We could all find out what time “Married With Children” came on at Fox.com and so on.
I still remember my first moment of URL awareness. I was driving by a billboard on the freeway in Los Angeles circa 1994, (in the midst of a terrible regional drought) and there stood a young Jason Priestley, star of the hit show “90201”, imploring motorists to shower rather than bath, stop watering the lawn and visit CONSERVEWATER.COM, to learn more.
How did we get to that evolution where .COM came to rise against other TLDs? The brands had led the way. Everyone else followed. The small brands tried to emulate the big brands so everyone would think they were big too. This whole newfangled Internet thing gave stodgy big-brands a newness and technical street-cred. Everyone was “winning”. I think I saw the dot-craziness peak sometime in 2000 when Honeywell got a 1 billion dollar stock pop thanks to Maria Bartiromo on CNBC, announcing the launch of MYAIRCRAFT.COM (a site that’s not doing much today).
Reading over this little series of memories it’s fairly easy for me to prognosticate some potential outcomes for new gTLDs.
Yet again the brands will lead with a relatively small clutch of early adopters showing the way. We’ll see it on the freeway, as a grayer Jason Priestley may pitch fuel-conserving cars at Prius.Toyota or My.BMW. On the next billboard one could imagine a proper and leathery Mickey Rourke, raising his glass with a steely smooth invitation to Drink.JohnieWalker or Enjoy.GreyGoose. Some time later you’ll see changes to email encouraged by Google with their rollout of .GMAIL including addresses that look like this: your.name@GMAIL (no dots)– The banks will embrace the security of dotless email too and their “official” emails will bypass quaint but instantly obsolete solutions such as .BANK and .SECURE. Within less than 5 years you’ll be emailing your bank contact at Bob.Smith@WellsFargo – everyone will want one of those new, authoritative, hipper no-dot email addresses.
The big brands that were not in the first round of applications will exert immense pressure to have the application window open again and there will be 10,000 strings in round 2, followed by 30,000 more in round 3. Once again, I predict no shortage of willing participants who hope to emulate the Fortune 1,000. With the last of Pandora free from her box you can expect to see technical standards change more quickly because corporate America, Europe and Asia will demand it. Get ready for some new faces to show up at ICANN meetings of the future. Inviting the Fortune 500′s marketing department into the root will change the outcome of ICANN’s bottom up consensus. There will be less attorneys and technical intermediaries than the past, if only on a volume basis – at least one ICANN meeting per year will feel more like a COMDEX show than an ICANN meet. There will be immense pressure on the technical apparatus to try new things and innovate, for the the World’s brands benefit.
The billions of dollars in new marketing for more intuitive site labels will drive the acceptance of, and navigation to, generic SLDs like Used.Cars; just as generic intuitive SLD’s such as PickupTrucks.com became more viable due to brands marketing URLs like ToyotaTrucks.com or EbayMotors.com before them. Latch onto the belief that things will be the same forever if you wish, but today’s technically savvy Internet user will require much less time to get used to new GTLDs than the 14 years it took a stunned World to come to grips with the concept of .COM SLDs
Existing SLD holders don’t fret. The .COM and the CCtld of the Country you are in will still have its place, and value. After all, the birth of modern Los Angeles did not cause a mass-exodus from New York City. It just gave us some great new places to visit. Then again, one could argue that if New York were the only great city in America it would be much bigger today. Perhaps more poignantly, AM Radio continues to have its place today, but it is not the throne of prominence it once enjoyed in the absence of FM, Satellite and Internet Radio. Marketing campaigns incorporating more intuitive new GTLD phrases, facilitated by a broad spectrum of alternative gTLDs, offered simultaneously, en-masse, will likely catch-on and work toward marginalizing some existing gTLDs and .COM SLDs in the long run. There will still be a strong legacy of value in the large incumbent gTLDs because they were first to market, they are familiar to people, they imply permanence in a changing Internet, and because good SLDs in the new extensions won’t all be free. You can expect .COM prices to continue to act as a value benchmark against other viable second level names in the new spaces.
While this may seem unsettling to some SLD holders and registry operators, it really shouldn’t be. This is one of those classic situations where a bigger pie genuinely benefits everyone! You could make the argument that the lack of GTLD spectrum alternatives and naming-innovation today, is already driving users to solutions like Facebook and Twitter. There are 7 billion people on the planet who will soon try to express themselves and in my experience there are not enough meaningful names to satisfy the demand of all individuals and businesses now, let alone those that will soon reach adult age in the rest of the World. The lack of mnemonic alternatives in .COM and CCTLDs has driven people and businesses to make unwise compromises in naming. The growth of Social networks could at least partly be caused by the lack of innovation in traditional naming. We just don’t have enough good names or enough consumer friendly technology at the existing name registries, and that lack of supply is having the effect of stifling demand from consumers – or shifting demand. It’s a short thought process to say user-friendly social networks are filling the vacuum in viable and innovative naming that exists today.
The pontifications above are just that. It is too early to say with certainty what the outcome will be. The catalysts that cause the pendulum to swing one way or the other relate to the number of strings delegated and the final rules surrounding those strings. If only 500 strings are approved and half of them fail to gain use – or if the brands are limited from applying, thus marginalizing those that do, then I predict new TLDs will become marginalized.
Recall the time when Budweiser switched their core marketing to Bud.TV, only to retreat to the familiar Bud.Com when they realized they alone were “innovating” in that space. I submit that the reason new-gTLD launches of the past failed to shake things up or marginalize .COM’s dominant position is because there were not enough “good alternatives” launched simultaneously, to be truly viable or challenge the global juggernaut .COM had become. A limited spectrum with just a few average and middling gTLD alternatives makes .COM the only really safe bet. As is the case in the US dollar centric World we live in, there is perceived safety in numbers. Bud.tv or .info or .biz or .mobi lack the legitimacy to challenge a well entrenched dot com. Flip the World on it’s head to where every corporation has a chance to operate from a unique gTLD however and watch the social acceptance of alternative strings increase exponentially.
As with finance in present day Greece or ancient Rome, the status quo works, until suddenly, it doesn’t anymore. Nobody can accurately predict the tipping point. People will default to .COM names until the price of renewals is too high, or until there is a large enough spectrum of viable alternatives and until enough .BRANDS market those alternatives to acceptability.
Regardless of your viewpoint on the future potential of new gTLDs, whether you agree with my theories or not, you should open your mind to the possibilities ahead, much as you did when you registered your first .COM name. The registrants of the future who take registrations in these new spaces are no crazier than you were in the early days when you registered your .COM. I am certain that this new gTLD window will bring some significant changes that we should all prepare for.
All of us who have the pleasure and privilege of participating in the evolution of the naming system have to concede that we are living through epic and most-interesting times.
There are very few people – very few collective individuals with the desire, experience and skillset to operate successful naming related enterprises in 2012. In a World where the Facebook IPO has become synonymous with “the Internet” in the minds of laypeople like my parents, it’s fair to say that domain names and naming could be viewed as a lost or ancient art. Many of naming’s most successful individuals are either too financially successful or diversified to care about moving the ball forward. This industry is chronically understaffed and very esoteric. I for one stand ready as ever to serve name registrants and portfolio operators regardless of the string names end-in or the currency we ultimately provide services under. My team has built some industry changing tools to market and sell SLDs of all stripe and color. We look forward to rolling out those changes this summer and autumn.
If our friends in Greece taught me anything today it’s that nothing is certain – the only constant is change. I look forward to embracing the changes that lie ahead whether the billboard I pass features Mickey Rourke, Jason Priestley or Charlie Sheen; whether my currency are Dollars or Drachma – and whether the domain names we manage end in .COM .NET or .SOMETHINGELSE .. I encourage all others to keep the same open mind.
[...] [...]
I can’t figure out how dotted email addresses would be possible user te current specification. Are you speculating this outcome or am I missing something?
***FS*** Yes and yes. I am speculating that these changes are coming and that the changes will come quicker now that the brands have entered the root.
Interesting thoughts.
You speak of technical standards needing to change. One of those standards hits home with your comments about dotless email. Technically dotless domains aren’t allowed. There are probably software workarounds, but people will have to push ICANN to allow dotless domains.
Also, .brand was an afterthought in the entire process. Yet half of the applications are probably .brand. Brand TLD owners will ask for changes to make their TLDs more useful.
***FS*** that is exactly right. The brands will drive changes and I predict the changes will accelerate. Think outside the box. Ultimately these innovations while technically improbably today will come come to pass.
The only way to remedy said situation (Greeks) is to embrace American values. Read his latest book – Still the Best Hope: Why the World Needs American Values to Triumph.
[...] the new .brand TLDs. Very interesting (surprising?) viewpoint offered by Frank Shilling: http://domainnamesales.com/sevenmile…nty-is-change/Enjoy! * __________________ Food for Thought So live that you wouldn't be ashamed to sell the [...]
Hi Frank, good insights, you should write more often.
If some of the famous .brands (such as .google) start giving free registrations to everyone for second level domains what effect do you think that would have on all the other new gTLDs that are counting on getting a lot of paying registrants in order to succeed (and perhaps even on the already established extensions such as .com).
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Frank, how can we as domainers make money in these new gTLDs?
If they come out with .cars ….. are we suppose to run out and try register used.cars, rental.cars, etc…
how can we make money with these new gTLDs that hardly get any traffic?
I feel like there is a second huge opportunity coming our way to make millions and millions of dollars…we are all here at the right time and the right place…but i’m just completely lost and clueless!!!
Frank, please HELP.
Frank, I respect you, but using Greece as an analogy for your domain-related points carries a lot of misinformation, including just how hard Greeks work in relation to other Europeans. Also, the Greek public sector per capita is smaller than that of several other European countries, such as Belgium and Holland.
Because you are a man of numbers, here’s some stats:
http://www.cnbc.com/id/44944435/Greeks_Work_Hard_So_Why_Is_There_a_Debt_Crisis
http://blogs.reuters.com/macroscope/2012/01/11/hard-working-greeks/
But I agree with your title, “the only certainty is change” or in the words of Heraclitus, “panta rhei” – everything flows.
***FS*** Thanks Acro.. My grandfather lived in Athens for 20 years and we have lots of Greek family/friends so I can assure you I bid no disrespect to the Greek people. I genuine feel bad for their position. Culturally they work to live rather than the live to work dynamic that permeates up North. eff karisto
@AA
I spoke wrong about my first comment stating that the current email specification doesn’t allow or a dotless address because it does allow that. It is the DNS that causes the problem because with current DNS specs as far as what is served by IANAN there are no dotless domains that Can resolve from their DNS that I can think of.
If you run your own DNS server you can resolve whatever you’d like. Classic example is an email address could be Andrew@Localhost
FS is probably right in that it wouldn’t be that huge of a leap for IANA to start resolving the string alone of an ip address to match a TLD. Each tld would only constitute one additional record in the DNS, so what’s the big deal.
I’m mulling around the concept of equating TLDs with currencies, albeit with no central bankers to watch over them (ICANN is hard pressed to handle its current tasks, much less become a Fed or ECB for the DNS) — and also remembering, cautiously, the old economist saying that bad money drives out good. Yet domains as currency may be a quite useful metaphor as we watch the new gTLD saga unfold.
You are absolutely right that it is the big brands who will use their marketing clout to teach the public to shift their eyes from the left to the right of the dot, and it will be that perceptual/psychological shift that will open the gates for others to build profitable businesses on better named domains than are available now. Ironic that the very brand interests that fought the program may turn out to be its largest users, as well as the ones who help ensure its public acceptance and accompanying success.
As for competing with the social networks, we’ll have to see — a domain is more of a destination, while a Facebook page or a Twitter handle is an identity within a DNS-related but separate reality, the major commonality being the use of the Internet as communications platform. And of course they are free (for the moment at least, though their monetization model has yet to be fully proven), while domains to date have always cost something, and free is a competitive advantage. But perhaps we will see the rollout of a social gTLD with free registrations, who knows?
All in all, a thought-provoking piece. Well done.
Nice post. Interesting to find a positive outlook on the gTLD flood that not only says: “It will make dotcom all the more valuable.” Those holding on for dear life might find themselves in a predicament. However, you should practice what you preach, unless you are a politician Frank.The passus “I for one stand ready as ever to serve name registrants and portfolio operators regardless of the string names end-in or the currency we ultimately provide services under. My team has built some industry changing tools to market and sell SLDs of all stripe and color” rings a bit false, since most with a tld-shattered portfolio know that without a significant chunk of good .com, DNS won’t grant access to that silver machine of yours.
Not really sure how dotless domains would be implemented, which would be required for dotless email. Essentially we are talking about extensions becoming keywords with no actual domain being present. If you are just giving out keywords then choice becomes very limited because things can’t be broken down.
It is going to break a lot of standards, how would Chrome work? You type in “Toyota” and it won’t know if it is a search query or a web address.
For email take an example of say, John@cars That could be john@cars.com, john@cars.net, john@cars.co.nz, john@www.cars etc. Why give preference to the latter?
***FS*** In Gmail’s case they could run the MX separately – These things will take care of themselves.. The catalyst for the change will likely be the amount of strings in the root.
Good shake up post FS. The sociological area is one to watch as the brand .com is synonymous with every worldwide fortune 500 company & for whatever madmen reason we all want the brand or at worst the perfume = “less is more” albeit company or generic as it equals = totem-pole status. I do not think this will change until the processor is an implant. One of those where technology must await the evolutionary stage (globally)
“…the status quo works, until suddenly, it doesn’t anymore. Nobody can accurately predict the tipping point….”
For me, this is the core generic point. Change. And, what change means.
I cannot say whether the upcoming new GTLD’s will constitute a change that really matters. I don’t know. The arrival of the Internet, itself, was a revolution that mattered. The arrival of Electricity mattered. The invention of the computer, and the PC, Mobile Phones et al mattered. The invention of the steam ship mattered, and many more that fundamentally changed the way humankind did things, conducted itself, and arranged its affairs.
The introduction of these GTLD’s may well only amount to an evolution – ie no more than an interesting derivative within the main game, the internet….ie amount to no more than a change at the margins.
If so, they provide an opportunity for some, but that’s all – most likely a brand/marketing opportunity for some established brands, plus an entrepreneurial opportunity for a few that get a hold of generics like .music, or whatever.
Many will say that they have far too much invested in their current (.com) brand, and will be unwilling to invest millions/billions in reinventing their brand wheel anew……Others, may will find that there can only be ONE .music, or, .movies etc, and the rest of us in those spaces will consequently remain with the Status Quo.
In short, for the vast multitudes of internet presence, it’ll be business as usual. And, .com will continue to e the gold standard…..For now.
….And, for now, it is. As Frank says, change is a constant, and a given.
One day, there will be a dislocating change to what we now know as the internet. It’ll come from place that, today, we cannot see, or, perhaps, even imagine. Its shape will be unfamiliar, its processes alien, its impact profound and all-encompassing. And, it’ll blow .com away – along with, perhaps, what we now know as the Internet.
Make today work for you. Possess a mind that adapts very fast to the new, whatever that may be. Survive, and thrive, and ride the winds.
And embrace change. Always.
As the man said:
“…the status quo works, until suddenly, it doesn’t anymore. Nobody can accurately predict the tipping point….”
…I don’t happen to think the intro of these new GTLD’s will be a tipping point.
This interesting article about Greek workers and how hard they work may also be used in an analogy albeit a reverse one for the new gTLD markets.?
FS,
Do you think .me , .tv or .co will gain or lose traction in the global market as the .brands start to emerge and market themselves?
SSAC just put out a study on dotless domains that surveys all the issues raised by using dotless domains. Short, interesting read. Here’s their conclusion;
“Recommendation: Dotless domains will not be universally reachable and the SSAC recommends strongly against their use. As a result, the SSAC also recommends that the use of DNS resource records such as A, AAAA, and MX in the apex of a Top- Level Domain (TLD) be contractually prohibited where appropriate and strongly discouraged in all cases.”
Here’s the link to the report;
http://www.icann.org/en/groups/ssac/documents/sac-053-en.pdf
***FS*** I appreciate the SSAC and their report but I think you are looking at a moment in time. In the future 10,000+ brands in the root will demand as-yet uncontemplated changes. These things are possible, safe and will likely come too pass despite this report.
I really found the article interesting. Maybe there is hope after all for some of us who grew up after the .COM boom or who didn’t buy enough .COM to invest in. So, I guess what I want to find out is how are people supposed to make money off these new TLD if they are going to be snapped by big brands and they are limited as well. For example even if a person were to register her or his name eg Kevin, then all the other Kevins will loose out on the .kevin TLD right? Only a few will be able to muscle in and claim commonly shared names etc. I guess it will be the owner of .kevin who will make the $$$ by charging for people to use his .kevin TLD for their emails eg jeremy.grank@kevin
Unless I missed something, I fail to understand how any ordinary person can turn the new .TLDs into a profit or investment like .COMs are.
Please enlighten me.
***FS*** There will be great traffic and resale opportunities in .EVERYTHING .. Right now all we have is an application window we’re still at least a year away from having SLDs in new namespaces. None of this stuff will happen in a sudden blinding flash. Hang tight and you will see the opportunities reveal themselves.
it’s funny, just a few days ago I tried to send a email name@GMAIL , of course it returned an error. but the point is.. are we as a whole, subconsciously moving in that direction? it’s only a matter of time. bring on the new cheese!
@ Phil Corwin
Great idea…one which I had last year. It was memorialized in an (intentionally) unpublished piece. Here’s a condensed version:
Domain Names Could Become The Next World Currency
Approximately two billion people use the Web, according to Internet World Stats . Cisco estimates that that number will jump to three billion by 2015.
Verisign issued its latest report on the state of the domain name industry. According to that report,
• there are a total of 210 million registered domain names (including all extensions)
• approximately 96 million of all registered names are dot-coms
• 67% of domain names are used in conjunction with a live, multi-page Web site
• 21% of domain names resolve to a single-page site, like a blog, and
• 12% of domain names don’t resolve at all.
That means that there are only about 32 million registered dot coms that are underproductive or not in use at all, i.e., held in inventory.
There’s no longer any debate that the dot-com extension rules the Web. And while there are still many millions of unregistered domain name combinations, it’s fair to assume that the vast majority of intuitive and desirable Web site addresses – ending in dot-com – are already in private hands.
In the context of an ever-increasing population of netizens, the conclusion to be drawn is this: Quality domain names are a rare commodity, no less so than precious metals or petroleum.
Frankly, because of the relatively small, outstanding supply of domain names, one could make an excellent argument that quality dot-coms should become a quasi-currency.
Anyone who’s taken Finance 101 was taught that money serves as a medium of exchange for goods and services. But money is also a store of value, i.e., barring hyperinflation, it affords its owner ongoing purchasing power.
The ever-weakening U.S. Dollar is backed by nothing more than the promise of the Federal Government. Neither gold, nor real estate, nor oil serves as collateral for the U.S. Dollar. So whether it will remain a store of value forever is certainly up for debate [which is one reason why recent demand for physical commodities has skyrocketed].
So, here’s an idea to (literally) turn domain names into money, and in the process, unlock their massive store of value.
Some visionary entrepreneur needs to create an opt-in, virtual currency platform, on which quality dot-coms would be exchanged for points (a la Bit Coin or Facebook Credits ) that could be used to purchase real world or virtual goods – including other domain names. For kicks, let’s call this platform Currency Domain.
For Currency Domain to succeed, the main challenge would be to create a consistently applied, standard methodology for valuing these unique asset. The rewards for successfully pulling this off could be enormous for both the founders and domainers.
Impossible? Not at all.
In fact, it may not be as complicated as you’d think, as long as the venture is approached in phases, just like any other complex project.
For starters, the first phase of Currency Domain could focus of short numeric domain names, for which there are already established price ranges. Phase-2 could incorporate generic words, for which there are also lots of historic price benchmarks. The third phase of the project might focus on high-traffic domain names, while phase-4 could be dedicated to surnames.
Subsequent phases of the project could focus on such categories as zip codes, location names, and generic phrases.
Only after the initial (more objective) categories are addressed, valuations are deemed fair, and the virtual currency widely accepted, will brandable names be assimilated onto the platform.
Those valuations will, admittedly, be more subjective than the others. But let’s face it; unique assets are appraised every day, whether we’re talking about modern art, collectible coins, or raw land. So this isn’t insurmountable – especially if a few smart folks put their heads together.
Putting aside the Currency Domain venture, my main thesis is this: Quality dot-coms will continue to increase in value, and have the potential to become a quasi-currency due to their
• scarcity
• time-tested ability to serve as a store of value, and
• ability to launch a global brand atop.
The timing is right. Monetizing quality domain names – in the truest sense – could well be the optimal solution.
So who’s got the guts, resources, and talent to launch Currency Domain and become the next dot-com billionaire – and make the rest of the domaining community richer in the process?
Frank,
very interesting and incisive views, your blogging is very refreshing,wish it was more frequent, regarding dotless @brand mails ,how long do you forsee for the change to become universal,a time frame ‘x’ for the tipping point,if that occurs, from a domain investor looking into the future =’x’ years of renewals,or do you forsee immediate liquidity in the aftermarket,
best
kaustav
***FS*** I would just be ready – as I said previously, this is not one of those things that will sneak up on you in an unsuspecting manner.. You will see this coming, if you care to look for it.
It’s a disgrace. The whole system is rigged by the corporatocracy with “our” politicians in their pockets. It’s been like this for years and years. Corporate greed sickens me. Political corruption sickens me. American capitalism sickens me.
Equating domain names to currency puts this into an interesting perspective. As the Roman empire crumbled the currency was debased, replacing valuable elements (largely due to scarcity) in the coins with filler materials which are much more common and cheaper. This allowed the empire to produce more coinage, but reduced the value of all coins and credibility in the currency. Competition and wide adoption has made dot coms scarce, as the premium of these tlds, so it is effectively the gold of the domain market.
This type of dilution to the currency of domains is very likely to be exactly what happens when the flood of new global domains settles. Currently there are five global tlds and the market is weak in most of this spectrum. This is the gold and silver of the current market, and prices are driven by competition for the higher quality virtual currencies.
Add a few hundred new extensions on up to thousands, and the commodity which makes quality global domains precious, scarcity, vanishes. The power of branding will position numerous competing currencies and create a huge number of effective alternatives, unless the search engines actively indicate preferences of some type.
The net effect of this, is that one domain will rapidly become as good as another, with the only real competition being the attempt to dominate the search space for an individual keyword. With all alternatives being functionally equivalent, there is much less incentive to pay premium prices for limited real estate. The greater the number of effective alternatives and the greater awareness of the infinite nature of these alternatives, the less incentive there is likely to be to invest large sums into the dot com machine.
This transition will take time, to be sure, but the forces of branding will eventually see that people pay less attention to the extensions and build a much higher awareness of compound extensions (both keywords) as they are exposed to marketing materials.
Marketers, with the choice of a vast array of word combinations and equally effective extensions will be able to precisely target the niches they want for their sites. The number of usable combinations will be exponentially increased and this will have some serious consequences for domain speculators.
I think it can be argued that dot com has well established branding, and will hold on for a while. There is power in traditions, and premium names in this space will last the longest. It won’t be long before those who were late to the party, but still have development capital to see that they can invest in developing parallel space for top tier keywords rather than trying to build on long complex and hard to remember phrases. Three and four word domains will lose value fast, and two word domains will struggle next.
Those who are holding the best premium undeveloped dot coms will naturally shout loudly that you need a dot com to succeed, but prospective buyers are going to have to think long and hard before investing potential development capital into a name when they could build a new brand with equal power in the eyes of the search bots.
I’m not expecting an instant transition, but I strongly suspect that the devaluation that occurs is going to have the same effect as the mass printing of notes in the Weimar Republic and more recently in Zimbabwe on the domain markets.
The current value of dot com rests on these factors:
1. The scarcity of global domains
2. The established branding
3. A perception of search engine preference
4. Lack of wide adoption of alternatives
5. The large number of competitors for dot com space.
6. Limited access to top tier keywords
7. Competition driven by speculation for the limited available names
8. A high ratio of potential users per available keyword
9. Trust factors related to domain age, of which coms tend to be the oldest.
Many of these pillars of value have the potential to be strongly shaken by a massive influx of new alternatives. Weigh the impacts of each carefully and make your best guess as to the outcome. I see dot com holding strength in only a few of these areas for the extended time frame. They may be enough for dot com to retain its edge, but it will be difficult to maintain over the long run.
One interesting thing I see as having the power to emerge from this is the competition for local search may well heat up. With a near infinite array of globals competing for the world space, the search engines may choose to elevate local tlds due to their precision in placement. I think geo-location technologies make that only a fair prospect, but the potential is still there. CCTLDS, depending on search engine handling, will be the only “rare” portion of the domain spectrum.
As far as search engine impacts, relevance will be the key factor. Algos are going to improve and the phrase “content is king” will become more of a factor as they become better able to evaluate it through semantic protocols.
Of the new extensions, those that take particular effort to provide relevance and screening may, over time, get “credibility preferences” if they can get a wide enough user base and are restricted in certain ways. These are likely to be domains backed by regional entities (such as cities) that limit applicants to established businesses, for instance.
At any rate, I see these new moves by Icann as seriously detrimental to domain investors, and in the long term, to the underlying markets which Icann serves. If they succeed in gutting the relative value of the established gtlds, then the free for all which emerges will make widespread investments difficult for even well financed investors. If incentive to hold domains for speculation is minimized, then the effect on overall registrations is likely to be significant. Eliminating scarcity almost always has drastic effects on a supply and demand driven market.
Of course, this is strictly my opinion, and it is entirely possible that I am completely wrong about this. There remain a large number of unknowns and the short term picture is undoubtedly different than the long range outlook. However, if you are a domain investor, it is probably a time to take a long critical look at your portfolio and evaluate its investment potentials.
LETTER FROM FRANK – UPDATE 8
“Gold of course is just another human behavior which men fight at their peril. Just a shiny metal without an intrinsic use… just like the tide of back to school, back to work mindset… and just like the rush for .com names which work just as well as .nets .info’s and .whateveryouwant. To return things to a domain context, no amount of new TLD’s are going to diminish the value of the human behavior gold standard – .com .. used.cars will not knock 20k in value off usedcars.com. It will increase the value of usedcars.com and set a permanent floor to its value. Make those words as you did my gold remarks in 2004, fight them at your peril.
Millions will be made and lost in the New TLD casino, on both sides of the table. We are creating a machine to enrich strangers, with a nebulous and unknown outcome for the participant. Most at the table agree it’s better to have tried and lost than to never have tried at all. I am not 100% sure I have the right answer for you, but it could be that the biggest winners at the new TLD table are those who buy the best SLD’s in each space. One recurring theme of all namespaces is that a TLD is only as good as the best SLD’s in it. If you buy the best second level names in each space you can do better than the registry itself. The .COM space is a good example. The top 10 million generic domain names in .com are worth more than Verisign. Only 5-10% of all the names registered in .COM are generic or meaningful in any way whatsoever. Newer spaces such as .INFO have seen even fewer good names with perhaps 1% of the .INFO space being worthwhile to anyone whatsoever. I could see just a few thousand good names per string in almost all new TLDs – a collective few million worth anything whatsoever to anyone.. and the demand fall-off being almost TOTAL after that.. Unlike .com which has “some” low dollar demand for $250 multiword strings, there will be ZERO demand for longer strings in new extensions. Better to be the registrant of the best SLDs than to embrace the clerical misery and competitive marketing-hell of running the registry itself. Only the deepest pocketed and most brave should walk down this college fraternity hazing gauntlet or roll the dice at this table of monsterous uncertainty.”
What has changed?
***FS*** “You are about to show me shadows of the things that have not happened, but will happen in the time before us,” Scrooge pursued. “Is that so, Spirit?” The upper portion of the garment was contracted for an instant in its folds, as if the Spirit had inclined its head. That was the only answer he received.
Great write up. But what about the fact that “.COM” is completely “neutral” … even though it technically stands for “commercial/commerce” and is in English letters, it’s used in non-english speaking countries. In other words, huge websites and platforms in China, Russia, etc, all around the world build on .COM, even though their main language is different than english. But now that the focus is on the RIGHT OF THE DOT, doesn’t it have to be in different languages ? So .CARS for english speaking countries, but also .frenchwordforcars, .spanishwordforcars, .russianwordforcars, etc ? Multiply that by every word in every language ??
So apart from the fact that there will be 10,000 different gTLD’s in ENGLISH, won’t there eventually have to be 10,000 more in other langugages ? Thus further diluting everything ? So if there will literally be tens and hundreds of thousands of extensions … I feel like it HAS to come back around to .COM which, although technically means commerce, has come to be country/language-NEUTRAL.
***FS*** I do not believe that non-english strings will be very strong. Think about other Countries think (hard now) about other languages. English is the near universal language of commerce and global rule-of-law. Nobody from the Latin character World will contract, trade, negotiate or settle transactions in non-latin characters. The nature of the Internet is to do transactions on a “Global” basis, not regional. I can understand non-Latin characters having regional appeal but that appeal will be muted and ultimately winnow away. Keep thinking about it. I have been doing so for a long time and I think in time you will come around to my way of thinking.
At this point in time websites in .net, .org and country codes still bleed traffic to the .com, and these are the most common and oldest alternate extensions. Even savvy internet users will mistype extensions from time to time. I think having 10,000 new gtlds will just lead to 10,000 times the confusion for the public, at least for an initial period. As you mentioned in your post, large companies trying to brand on extensions like .tv (and .co) have failed, and reverted back to .com.
It will take a massive undertaking and years to ‘retrain’ the public as to familiarity with using new domain name extensions.
Late last year Coca Cola starting producing white polar bear cans for regular Coke, for a special Christmas-time theme. What happened was mass confusion to the public, many people thought the white can meant it was diet Coke, and not the regular Coke. Coca cola decided to stop the campaign and go back to the regular red cans, rather than fight the tide of confusion.
Will all the new gtlds just create a similar situation for the public?
I do agree with you though that through all this it’s important to keep and open mind and look for any opportunities as they arise.
dotless will be confusing and perceived as defaulting to .com to a vast majority of internet users, and ultimately drive significant more traffic to the .com
dotless will also most likely default to .com in certain browsers, email programs, etc
nothing will incrementally benefit .com more than dotless
dotless = consumer confusion = benefit the .com standard
[...] In New gTLDs, The Only Certainty is Change, domainnamesales.com [...]
nice post!
Why are we still talking about the gtlds? They will obviously fail and go down in cloud of cyber-flames.
Stick with .COM or save your money. There is no in-between.
FS@ Ref ” I do not believe that non-english strings will be very strong.” Europe, Asia are very old cultures with strong national identities, some so poor that education must come in the form its mother tongue 800 million speak Hindi these are tomorrows consumers that will create the markets to will drive these economies from nothing. The industrialsed Europeans will trade as pan-Europeans but national identity (language) will be defended (4 all the usual totem pole manipulative reasons) Your reply / comments M says: are true only for English tongues for a very long space time yet.
While I agree with Frank’s idea of keeping an open mind……but the problem is how can one chase/pick the potential winners among 100s (if not 1000s) of new TLDs with limited resources. More chance of losing than gaining for a little guy imo.
So I have deciding to stick with the .COM mostly based on my experience with other TLDs such as net/mobi/info/us/biz etc. In last 4 years, I managed to bring my portfolio to 99% .COM rest 1% is mostly .Org
But I have kept open mind and have made a small bet on new TLDs in a different way as follows:
As 1000s of new TLDs eventually emerge, there is going to be a complete chaos and many people will fight for the rights to the same domain. Now imagine when you have 1000s of new TLDs that means huge number of URS complaints/cases will be filed all the time. (URS is the system for handling complaints for new TLDs, just like UDRP is for current TLDs).
I have managed to acquire over last few years a nice group of about 20 URS related domains and plan to develop/lease these domains. I am talking about domains like URS Lawyer(s), URS Attorney(s), etc.
Time will tell if I made a good bet ………………
Thanks for the response- I definitely see what you are saying. But, for example (and you can replace these selected words with pretty much anything), I don’t see how French citizens are going to purchase and look for information about “cars” on .CARS as opposed to “voitures” (thanks Google translate). In Spain it’s “coches.” While English is the global language of international trade and formal law, don’t these countries still retain strong language-identity within their borders and when advertising/selling products to their people ? Do billboards and television ads in Germany, Russia, and India speak in English?
I have never been to any of the aforementioned countries so the above questions are actually questions (although with a skeptical tone), but I’m just shocked that businesses would talk/advertise to their own people in English.
Thanks for your explanation though, I know you’ve seen it all in the domain world. And since you are sitting on THE .COM goldmine your words regarding its potential downfall carry the most weight and are very interesting to hear.
***FS*** You’re certainly correct re your comments intra-country but I think you’re already seeing more of a marriage of english with foreign language. I see English words in Chinese shops, I don’t see Chinese characters at the Walmart. This is certainly not an overnight journey, but in the future I believe you will see much more English than cyrillic, farsi, simplified chinese etc. See this old graphic http://frankschilling.typepad.com/.shared/image.html?/photos/uncategorized/language_future.jpg
Nice article FS.
Currency is a store of value and domain is a store of “ content” . This is how is see it. Content is The King….
Since big brands already have their content well established in dot-coms.
I am wondering what added value new gTLDs are offering . If you logon to .toyota how this is different from login to toyota.com.
Is there a change in content ?????
Any comments please on how the new gTLDs would add to the quality of domain content compared to dot-coms????
Best
Rashed
[...] case you missed it, Frank Schilling posted a blog post last week titled In New gTLDs, The Only Certainty is Change. Like all of Franks’ posts this is another one you must read. In the article Frank talks [...]
Whether one agrees or disagrees with your analogies, premise, or implicit outcome, it is this kind of introspective thinking that the domain industry needs in order to define itself today and tomorrow. IMHO the article was thoughtful and well presented. This kind of outside-the-box thinking helps me inderstand why FS was and is a key player in domain name acquisition and marketing business. In a recent conversation with my wife I conjectured that Google and FB will be second tier in a decade. The Twitter model seems to be thriving, and the LinkedIn niche seems to me to be a viable model into the future. I think that PRIVACY will be one of the key determinants into the foreseeable future as personal freedom takes the forefront in futuristic thought. Google and FB are the antithesis of personal privacy… Computers and automation will continue to evolve at a much more rapid pace and the ability to self-educate and prosper through the communication and internet era will more heavily define the world’s population well into the future as all the world’s knowledge becomes available at the touch of a key…
***FS*** I once thought that domains were the center of the world. Much in the sense that Twitter, FB, and GOOG are at the center of the world as individual media properties. The truth is that domains are indeed the center of the world, but a large grouping of them does not make them a media property – rather each individual name is at the center of its own world – and there-in lies the strength of names in general. Name portfolio operators are the center of the world much like an electric utility is at the center of a city because it allows the city to function. No names, no Internet. Twitter, FB, GOOG, YHOO, MYSPACE COMPUSERVE all require(d) a domain name to make them function. But that said I have yet to figure out a way to make even a large tranche of names with a great deal of traffic = any social network, because the interests are so fragmented. I’m still thinking about that though.