The Future of Domain Names

“Dot com” is more than a web address; it’s a symbol. Synonymous with the World Wide Web, “dot com” has been a common term since the Dot Com Bubble of last century, and it’s even defined in the Merriam-Webster dictionary.

It’s no surprise, then, that .com is the most popular top-level domain (TLD) by far. One of seven original TLDs first developed in 1985 along with .gov, .org, and .edu, it’s remained synonymous with websites even as available domains have expanded beyond those seven.

With .com being so popular, many of the best names are taken, leaving companies to spend big bucks fighting over the rest.

That’s why the Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit in charge of maintaining Internet domain names and other unique identifiers, has been busy adding new TLDs in the past few years.

ICANN has tried to expand beyond .com in the past, but unfortunately some of those TLDs, including the notorious .biz and .info, quickly became havens for spammers, causing legitimate businesses to shun them.

But today, ICANN is working to change the rules of TLD registrations, opening the floodgates to hundreds or even thousands of new TLDs in the next few years.

The new rules will allow companies to register their brand names as TLDs, meaning MSN could register .msn, or Apple could apply for a .mac TLD. The possible TLDs are only limited by your imagination… and your wallet.

ICANN’s new TLDs come with a hefty price tag. While you can snag a .com for under $10, applying to activate a brand-new TLD under ICANN’s new rules can cost tens or even hundreds of thousands of dollars. And that’s just to start the evaluation and application process, which can take over a year.

Some companies are now snatching up as many new TLDs as they can, trusting that this investment will pay off soon: Once a company buys a new TLD, they effectively become a domain registrar, and can charge others to register their own domains using that TLD.

This new move by ICANN could drastically change the web, and possibly even overthrow .com’s reign at last. What will the future of the web look like with all these new registrars, and who will own all the new TLDs? Check out the details below.

The Future of Domain Names

Since 1985, when the first .com name, symbolics.com, was purchased, domain names have been valuable pieces of “virtual real estate.” Until recently, the market has been relatively limited since most of the short and sweet, easy to remember domains are already owned. How is the market changing? Is the future of domain names already here?

Are the days of short and sweet over?

In 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) approved a plan to dramatically increase the amount of real estate available online by allowing web addresses to end with almost any word in any language.

Under this scheme, major news network CNN could purchase the domain .cnn and place all of its coverage under domains at that extension, such as:

• syria.cnn instead of cnn.com/syria
• politics.cnn instead of cnn.com/politics
• health.cnn instead of cnn.com/health

Anyone can apply for a new generic top-level domain (gTLD) for a $185,000 setup fee.

Beyond opening up a virtually endless supply of Internet real estate, this plan:

• Allows non-Roman characters in domains
• Users in Asia, Eastern Europe, and the Middle East can connect in their native languages.

May make the web more user-friendly and intuitive with options like:

• adoptA.dog instead of PetAdoptions.com
• buyA.camera instead of BuyCameras.com

New TLDs

While ICANN authorizes new TLDs, private firms must bid for the right to own and manage them.

Since August 2011, ICANN has received close to 2,000 applications for new gTLDs.

• Active applications: 1,773
• Applications withdrawn: 153
• Change requests submitted: 864
• Change requests approved and posted: 779

In 2010, well connected “Internet real estate investors” raised $100 million for Donuts incorporated.

The company has invested nearly $57 million in bidding for 307 new gTLDs.

It has won the rights to:

• .construction
• .photography

Failed objections were filed for:

• .limited
• .express
• .coach

Other failed objections:

• .academy – Donuts applied, objected by Academy Sports and Outdoors
• .blue – Afilias applied, objected by Blue Cross Blue Shield
• .bio – Starting Dot applied, objected by Biotechnology Industry Organization

Google and Amazon are in the game, too.

The two tech giants are competing on a number of extensions:

• .app
• .game
• .search

Google’s applications include:

• .goo
• .music
• .mom

Amazon’s applications include:

• .kindle
• .book
• .amazon – They almost lost .amazon to South American countries

22 generic TLDs (gTLDs) existed until 2011.

• .com
• .edu
• .net
• .org

24 new ones were added in November 2013.

• .guru
• .camera
• .graphics
• .holdings
• .construction
• .bike
• .tattoo
• .gallery
• .ventures
• .equipment
• .sexy
• .singles
• .clothing
• .plumbing
• .technology
• .land
• .estate
• .voyage
• .lighting
• .contractors

At least two applications exist for 231 of the extensions, including:

• .home
• .art
• .blog
• .book
• .llc

Will they succeed or fail?

Experts say: It depends on how they are marketed. Many terms are in direct competition with each other.

.investment vs. .money vs. .finance

New extensions may become a target for spam like previously released TLDs such as .biz

gTLDs with lower price points are seeing more purchases: .menu has sold 10x more units with GoDaddy than .luxury

Price to pre-register a domain ranges from $40 to $1,200.

Refundable less an application fee if the domain isn’t secured.

Who’s Behind the Major Investing Companies?

Monte Cahn

• Founded domain registrar Moniker.com in 1999.
• Joined DomainHoldings in 2012 as the Executive in Residence and Advisor to the Board.
• Continues to serve as President and Director of RightofTheDot, LLC. An Internet consulting and advertising firm.
• Has sold more than $300 million in domains over the last decade, including:
• • Autos.com – $2M
  • WallStreet.com – $1M
• Rose to fam after brokering large domain sales:
• • Dating.com
  • Photo.com
  • Bored.com
  • Cameras.com
  • CreditCheck.com

Paul Stahura

• Co-Founder and CEO of Donuts, Inc.
• Founded domain registrar eNom in 1997. In less than 10 years, it became the second largest domain registrar.
• $100 million in profit.
• Founder of domain auction platform, NameJet
• His company was the single largest applicant for new gTLDs – Responsible for one in six applications

New gTLD Believers and Doubters

Believers

Frank Schilling

• Cayman Islands based Internet investor
• Founded one of the most profitable domain name holding companies, Name Administration Incorporated.
• He has a new worth of $500 million.
• His portfolio includes more than 300,000 names like:
• • Antarctica.com
  • Fettucine.com
  • Chapter11.com
  • DrugProblem.com
  • AntiguaHotels.com
  • DiamondWeddingRings.com
• Founded Uniregistry to invest in new gTLDs.
• Has invested $60 million
• Has applied for 54 extensions including:
• • .pizza
  • .food
  • .art
  • .design
  • .diet
  • .yoga

Doubters

Rick Schwartz

• Known as the “Domain King”
• Runs several successful websites
• • TargetedTraffic.com
  • RicksBlog.com
  • HallofShame.com
  • eRealEstate.com
• Has sold more million dollar domains than anyone else.
• • Candy.com: $3 million
  • Property.com: $4 million
  • Men.com: $1.3 million
  • ebet.com: $1.35 million
• Rick Schwartz says:
• • New gTLDs may have “internal success.” Success within the industries they are intended for, but not widespread acceptance.

.com had “external success” because they were widely accepted by third parties

New TLDs will reinforce .com as the gold standard of Internet property, making them even more sought after.

New TLDs will provide some benefit, as seen by:

• .mobi
• .me
• .xxx
• .co

New TLDs will not come close in value to .com

According to Internet Domain Name Index, values compared to .com are:

• .net: -75%
• .org: -84%
• .info: -90%
• .mobi: -97%
• .biz: -96%
• .de: -37%
• .co.uk: -74%
• .es: -86%
• .eu: -81%

A Look at Today’s Domain Names

Daily Statistics for December 10, 2013:

• 148,264,184 total domains
• 112,103,754 .com
• 15,239,598 .net
• 10,405,768 .org
• 6,014,903 .info
• 2,646,999 .biz
• 1,854,162 .us
• 145,03 New domains
• 148,563 Transferred domains
• 105,432 Deleted domains

Most Expensive Domains

• Fund.com sold in 2008 for $9.99m
• PrivateJet.com sold in 2012 for $30.18m
• Hotels.com sold in 2001 for $11m
• VacationRentals.com sold in 2007 for $35m
• Sex.com sold in 2010 for $13m

Sources

• newyorker.com
• icann.org
• domainnews.com
• geek.com
• computerworld.com
• theguardian.com
• domainnamewire.com
• domaininvesting.com
• dnjournal.com
• donuts.co
• austinventures.com
• thedomains.com
• uniregistry.com
• ricksblog.com
• idnx.com
• whois.sc
• thenextweb.com
• leandomainsearch.com