The Real Winner in the New gTLD World – .COM

News of ICAAN’s approval of the new gTLD program has hit just about every major news source and blog on the planet. Now friends and family members that have never talked about Domainers are coming to me daily asking about what this means for Domain Names. For the first time “Domain Names” are not only in the news – they are a hot topic! This has caused a ton of people to discover that, hey, people have actually been buying and selling Domain Names for a long time now, who knew!

Since I’ve been fielding this question a lot I thought it was about time for me to cover it on my blog. I’m sure it’s a question that many of you have received as well, “So what’s going to happen to .COM?”

In my opinion this ICAAN’s approval of the new gTLDs is by far the best thing to ever happen to .COM, period. If you take a look at domains sales over the last 15 years you can clearly see that .COM always commands the highest price and has received incredible adoption around the world. Just start typing on your iPhone and you’ll notice a .COM button there! Now gTLDs have been around for a long time, look at .NET and .ORG – people still buy and sell these but they don’t command anywhere near the price of a .COM.

dotcomSo with more gTLDs what happens? Well first, the whole world is now starting to see the value in Domain Names. For anyone who said apps were going to replace domains, welcome to the wonderful world of being wrong. I can’t see anything that would solidify that domains are here to stay more than ICAAN’s decision and all the press it has received. So Domain Names aren’t going anywhere. Now let’s look at the domain sales market. .COM has been king forever, as new TLDs have come-out they have definitely created a good buzz and offered opportunities for businesses to brand themselves online, but .COM has always commanded the highest price.

Let’s take .CO for example, which I am a big fan of! The folks at .CO have done a great job building a brand, getting the word out, and helping people create great things on .CO domains. I’m a big fan of this and think there are lots of great opportunities for businesses to use .CO to chisel-out their space on the net. That being said, if you look at .CO sales, they are a fraction of the price of their corresponding .COM names. This is not to say .CO is bad, it’s one of the best TLDs out there, but .COM is still commanding top-dollar. Business.co sold for $80,000 this year, I couldn’t see Business.com even selling for as low as 8 million.

Now let’s look at the gTLDs that have been around forever, .NET and .ORG – still great TLDs but after all this time they have never unseated .COM, it’s still king. So what happens in this world of many different gTLDs? .COM wins! The more choices there are the more competition there will be int he gTLD market, I think there will be an impact on .NET, .ORG, .INFO, etc. However this only strengthens the value of .COM, in a sea of TLDs everyone wants the .COM the most.

So what’s happened here? Really good things for .COM – now the whole world is really starting to clue-into the Domaining world and is seeing that people have been actively buying and selling domains names. The world is viewing Domain Names as real estate – with each new gTLD that launches our whole industry gets more publicity. With this publicity comes more people to the space, more investors, more developers, more entrepreneurs, and the winner, the TLD that takes the cake and wins is that which has been winning all along .COM.

Apple is not going to replace the “.COM” button on the iPhone with a “.XXX” or a “.VEGAS” it will still be .COM. The new gTLDs are a good thing, I will be investing in them and developing some into major brands, but the real winner here is the Domaining industry and the leader of the pack which now becomes the leader of a much bigger pack – .COM.

 

{ 26 comments… add one }

  • Gene June 22, 2011, 1:16 pm

    Extremely well said, Morgan. The reality is that the more that ICANN waters-down the ‘pool’ (so-to-speak) of available extensions, the higher dot-coms rise in prestige – and value.

    The net effect of this will be that the average price paid for quality dot-coms may double in the next 12 months (theory being that the SMEs can’t afford 185K, but can afford 10K.

    Conversely, some of the high(est)-end names may come down in value a bit (theory being that if you’re BIG Company, and you have the funds to purchase Big.com for $750K or dot-big for 185K, you’ll probably opt for the latter simply because your CMO thinks that dot-big will better-solidify your brand.

    Reply
  • Dan June 22, 2011, 1:37 pm

    .com will remain first choice for most brands.

    But for targeting a particular community, it may be a different matter. If community leaders back a particular TLD, and the community supports it (not a far-fetched idea judging by the support for country-code TLDs), then .com sites in that field will feel the effects.

    Reply
  • Joe June 22, 2011, 4:18 pm

    Great article, Morgan. You wrote: “The new gTLDs are a good thing, I will be investing in them and developing some into major brands,” Are you planning to apply for some gTLDs?

    As for .CO, I wouldn’t suggest comparing .CO to .com since they’re different planets and .CO isn’t even 1 year old, while .com has just turned 26 and was the first one. I don’t think any of the new gTLDs will be doing better than that.

    Reply
    • Morgan June 22, 2011, 4:51 pm

      Thanks @Joe!

      I will not be investing in creating a gTLD, by investing I meant that I will be buying some of the new gTLDs. I am particularly interested in geo gTLDs. I think there is some great potential for things like .Vegas, .California, etc.

      Reply
  • David J Castello June 22, 2011, 5:27 pm

    The real fun starts when someone acquires a new TLD like .CARS and the business world takes notice that tons of traffic is intuitively defaulting to CARS.com everytime .CARS runs an adv. Don’t think it will happen? Watch.

    Reply
  • bebado June 22, 2011, 5:53 pm

    This is the scenario: I need a photocopier, I would go to canon.canon,. All I would see there is Canon brand, and I would say, wait a minute, maybe I can find a better and cheaper photocopier in a different brand, then I would go to sharp.sharp. All I will see there is Hitachi brand, but I need to shop around, then I would go to all brands.brands: hp.hp, toshiba.toshiba, philips.philips, samsung.samsung, nokia.nokia, compaq.compaq, dell.dell, panasonic.panasonic, grundig.grundig, pioneer.pioneer. I would go to all these brands because I don’t know for sure what brands make photocopier and what brands do not make photocopiers. The same thing will happen with geographic-based TLDS.. This will make .COM the king of kings of kings. If .COM does well .CO also will do well because it is the only alternative to .COM

    Reply
  • RAYY.co June 22, 2011, 6:48 pm

    @Gene
    “…Conversely, some of the high(est)-end names may come down in value a bit (theory being that if you’re BIG Company, and you have the funds to purchase Big.com for $750K or dot-big for 185K, you’ll probably opt for the latter simply because your CMO thinks that dot-big will better-solidify your brand….”

    It’s true. The high end quality generic domain names in .com may come down in value.

    Assuming China.com is worth $10m plus
    Other big company will have choice to buy i.China or u.China for $185000+ as the ultimate Global Cyber Brands. So the concept of many choice or options in gTLD flooding in the world market may drag down the value of high end .com

    Once it reaches the scarcity supply of high end quality in .China , the resell value of i.China can command $10m+ , this will also help to maintain or boost China.com value $10m to $15m+…

    Reply
  • RH June 22, 2011, 7:01 pm

    It will not help the top .coms imo, people looking for $500,000 plus. It will probably help the lower end. But to any newbie reading these blogs, make sure you know its all opinion and or agenda. No one “KNOWS” what will happen. Again IMO

    Reply
  • David J Castello June 22, 2011, 7:20 pm

    @RH
    There are some things we do know.
    1) There is almost NO public demand for these TLDs (biggest red flag of all).
    2) The US Justice and Commerce Depts are not happy witb ICANN about this – and that’s putting it mildly.

    Reply
  • David J Castello June 22, 2011, 7:35 pm

    @RAYY.co and @RH
    The biggest benefactors of these new TLDs will be the single word generic dotComs – and it for that reason that I am in favor of them (however, if a friend asks me if he/she should invest in a new TLD I’ll be the first to tell them they are out of their mind).

    Let’s take RAYY.co’s example of China.com. Someone acquires dotChina and starts selling I.China, U.China and thousands more. And let’s say in two years all of those dotChina names represent businesses worth billions of dollars. At that point, you think China.com goes down in value? Seriously?

    Reply
  • RAYY.co June 22, 2011, 9:32 pm

    @David
    “…Let’s take RAYY.co’s example of China.com. Someone acquires dotChina and starts selling I.China, U.China and thousands more. And let’s say in two years all of those dotChina names represent businesses worth billions of dollars. At that point, you think China.com goes down in value? Seriously?…”

    Yes, I agree. At that point after 2 years, China.com will go up value definitely.
    As I mentioned in my previous paragraph noted below:

    “…Once it reaches the scarcity supply of high end quality in .China , the resell value of i.China can command $10m+ , this will also help to maintain or boost China.com value $10m to $15m+…”

    Once again, it all depends on so many variables in demand and supply equation, timing…, economy environment…, trends…popular global cyber brands…, and… LUCK… as well…

    You are right, The biggest benefactors of these new TLDs will be the single word, quality generic dotComs .

    Reply
  • Dashworlds June 23, 2011, 1:26 am

    New TLDs? But Not For You!

    …as ICANN won’t even consider applications from individuals or sole proprietorships, effectively ignoring the interests of the majority of Internet users.

    At that “nominal” deposit of $185,000 per TLD (plus potentially unlimited annual fees/expenses) there are alternatives. Using Dashcoms (rather than Dotcoms), playing the TLD game is free.

    Dashcoms are addresses such as “business-com”, “music-store” and “social-network” (and even “♫♫-♫♫”). Available in any language and totally outside ICANN’s remit/control, resolution is via an APP; but ISP links are coming to make that unnecessary.

    Reply
  • Dan June 23, 2011, 3:20 am

    All depends on how people feel towards the TLD. If there is loyalty towards .nyc or .golf, then .coms in that field have a problem.

    If a TLD is unlikely to attract loyalty, such as .cars or those launched to date, .coms will be less concerned.

    Reply
  • RH June 23, 2011, 11:05 am

    David I would expect no other opinion from you and have a great deal of respect for you. But what else would an owner of top tier .com domains say ?

    Reply
  • Jack June 23, 2011, 11:44 am

    I think expanding gTLDs by allowing to choose your own suffix is a poor idea. The Internet is a mess already and this will make it even worse. IMO, ICANN should have from the start restricted ownerships for domain extensions. You’re not a commercial entity? You don’t get a .com. You’re not in the internet business? You don’t get a .net. It would have been an extra step for verification, but it was doable. Now we have millions of unrelated, worthless parked domain names that could have been used for good.

    Reply
  • David J Castello June 23, 2011, 1:41 pm

    @RH
    I always find that the truth helps. If I thought otherwise I would be liquidating. The bottom line here is a BIG one: THE PUBLIC COULDN’T CARE LESS. No matter how much people try to hype these, there is nearly zero public demand. Peel away the curtain and that’s what you’ll find. I love the article saying that the NYC City Council is thrilled about dotNYC. Of course they are – because they have been convinced it will be a revenue windfall for them.

    Reply
  • David J Castello June 23, 2011, 1:44 pm

    PS:
    @RH
    For the record, I am thrilled these are coming out because I know what the eventual impact on dotCom will be. However, I am also advising my friends to steer clear.

    Reply
  • RH June 23, 2011, 2:32 pm

    David, I am not championing them in anyway. My point was that if .com owners at the high end get to greedy, then maybe someone thinks, “We can start our own for $185,000”

    Reply
  • DomainerJ June 23, 2011, 8:25 pm

    After much thought and numerous rounds of mental chess with my Mensan friends, here’s my take…

    In 2014 (or later!), the new gTLD’s will be rolled out.

    They will be a huge failure — as were .Aero, .Travel, .Museum, .Jobs, .Mobi, .Biz and .Coop. Hey, did you know that the extension .CAT has been available since 2005? Who knew? Go ahead and Google it. I’ll wait. As such, can someone perhaps explain to me why it’s not popular with feline lovers? Knowing this, do you really believe that .DOG or .PET will do any better? Highly unlikely, my friends.

    I truly believe that those who are foolish enough to invest in gTLD’s will lose their cybershirts.

    As it becomes obvious that the gTLD concept is flawed, the laws of supply and demand will kick in and the value of a properly-spelled, generic .COM will absolutely need to skyrocket — even beyond what they are today. Mortgages on a premium piece of oceanfront domain will be common. Why would they not?

    Just as landlords now rent out commercial bays in shopping plazas, so too shall domainers rent out their precious domain names to entities who want to monetize the traffic and benefit from the .COM prestige and credibility — something the in cohesive gTLDs will always lack.

    There you have it, my predictions. Take ‘em or leave em, but it seems pretty obvious to me.

    Allow me to succinctly summarize everything for you: keep renewing those .COM’s. If you let them drop, you probably won’t be able to afford to buy them back in a few years

    Reply
  • Ron June 23, 2011, 8:30 pm

    I would also add that the added delay of a Year 2014 (best case scenario) rollout will further solidify .COM’s lead…like it really needed that! I Agree — stick with .Com.

    Reply
  • CraigNest June 23, 2011, 8:34 pm

    Just realized that the MINIMUM price of a generic .COM has now been firmly established at $185,000 since it’s a no brainer that any company would prefer the prestigious and credible .COM over a nutty gTLD that will only lose traffic to the .COM version anyways. As such, the base price of the .COM has just been established!

    Coooool!

    Reply
  • RAYY.co June 23, 2011, 9:32 pm

    @DomainerJ

    ‘…the value of a properly-spelled, generic .COM will absolutely need to skyrocket — even beyond what they are today. Mortgages on a premium piece of oceanfront domain will be common. Why would they not?…”

    Remember recent tragedy events in Japan, Queensland and New Zealand… all mortgages on a premium piece of oceanfront domain properties can be wiped off by tsunami through earthquake disaster…

    The flooding of gTLD is like natural disaster of tsunami earthquake epidemic. It can possibly wipe off mortgages on a premium piece of oceanfront domain names…reduce the TOP END .com value to $185000 + benchmark.

    I don’t like to see that happen, but you can’t stop the power of Mother Nature, global cyber brand gTLD epidermic attack .

    Reply
  • RH June 24, 2011, 10:49 am

    .cat has nothing to do with Felines

    1.1. Who can apply for a .cat domain name ?
    You need to belong to the Catalan linguistic and cultural community in the Internet. You can belog to it if you:

    already have contents in Catalan published online.
    you could benefit of Sunrise’s phases 1 or 3 validation codes.
    you have access to an special code (sometimes called ENS)
    issued during special promotions or by agreements with certain institutions.
    you develop activities (in any language) to promote the Catalan culture and language.
    or you are endorsed (sponsored mail) by 3 people that or 1 institution already using a .cat domain name.

    Reply
  • virtual books June 26, 2011, 3:38 am

    In the usa there is no doubt that.com will strong although in some other countries there may be some dilution , in australia .com is not seen as local so a new gtld such as .melbourne will ultimately do better overtime, of course not everyone is a domainer

    Reply
  • ah so June 12, 2012, 10:34 pm

    The GTLDs are doomed to .fail

    Reply
  • Domainer Don June 13, 2012, 12:49 pm

    From the beginning I believed that the new gTLDs would have two effects: 1) bring focus to spotlight the domaining industry in general and increase the the worlds recognition of domaining as a legitimate and honorable business, and 2) create a few more kazillionairs who get the right extension and does the right thing with it (read Frank Schilling), and cost a lot if inept speculators millions upon millions as they see their new gTLDs go the way of .tv and .mobi. I think that Frank probably did the right thing by applying for the 54 new gTLDs he did, but I also think that Mike Mann did the right thing also. Mike will not have a single new gTLD application rejected, because he applied for ZERO. This is all fascinating stuff!

    Reply

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