People often ask me about my thoughts on the new domain extensions or gTLDs for short. More commonly, they ask if I can help to sell them. Within the domain community, thoughts about their value and potential can differ widely.
I was reading a thread in a domain forum about the gTLDs that I didn’t necessarily agree with. It stated there was no value from an investment or end-user standpoint in these domains if they did not form a very obvious or apparent brand for consumers to navigate to. I could go on for hours about how Google isn’t actually a real word and they practically dominate the internet.
People occasionally overlook the historical aspect of how domains got their start, at least up until they were directly consumer facing. Take a look at some of the original domain names registered. Symbolics.com was the very first on March 15, 1985.
However, what about the others? What other domain names were registered in the early days? Intel.com, ATT.com, HP.com, IBM.com, GE.com, and so on. Do any of these companies sound familiar to you? They should, even today they’re massive brands.
These brands also share something in common. Not one of these companies were created with the expressed intention of creating a website and other digital content for consumers to engage on the web. I want to pose another important question, when was the very first website launched? The answer, August 6, 1991.
Do you know what the first website was? Tim Berner Lee’s research catalog at CERN. Remember, at the time the internet was primarily used by academics.
Take a step back and look at this from a domain name aftermarket and usage standpoint. It took over six years for a website to actually launch on a domain!
During that time, who were the primary consumer of domain names? The answer, brands.
This brings me back to my disagreement with the article in the forum I was reading. Companies did not originally acquire these domains for consumers to directly navigate to. They were purchased for brand protection or other reasons. I can’t emphasize enough how fundamental this has been to the industry.
One of the most important metrics to look at when evaluating whether or not to invest or even use a new gTLD should be to have an understanding of what domain extensions brands are purchasing. Consumer domain name usage came far after early .com registration. Obviously, things have changed since the early days but this should still be noted.
It will take time for consumer understanding and usage to be on par with .com. A valuation based entirely on current usage is foolish as they are practically brand new.
An interesting situation is occurring right now. Companies like Google, Amazon, and Nike have made bids and won the rights to entire registries. That’s no small feat. Instead of buying a single domain to protect themselves, they own the rights to an ENTIRE REGISTRY!
I’ll throw one more thing to consider your way, developing markets. Did you know Google is actively working to bring people online for the first time every day? The reason most of us hold .com and other extensions with high regard is due to our early exposure and familiarity. What would you say if someone who has never used the internet is first introduced to .club? What if they are first introduced to a Google owned registry? Their association would probably be in same league as our own with .com.
Say this continues for a couple years and the assumed extension in a region becomes one of Google’s. How well do you think a new company attempting to capture a market share in one of these new regions would fare without the local assumed extension? By that point an aftermarket would have been created.
Brands have been a part on the domain industry since the beginning. As it stands now, .com is king. However, in Brazil .com.br is the preferred extension. In Canada residents prefer to buy products from websites with the .ca extension. I should know, I’ve brokered country code extensions to several companies that want to operate in these regions.
I believe you will see a lot of parallels in the launch and adaptation of new gTLDs with historical to present day usage of country codes. Approaching any investment or forecasting the future with a linear outlook will most certainly lead to failure. While major brand acquisitions should not be the only part of your valuation process, it should never be overlooked.
The time frame for consumer adoption may be in question; but with the marketing efforts of Donuts, Mind+Machines, .Club, Uniregistry, Google, and many others, there are more than just a few who believe in their future.