ICANN laxed strict rules on top-level domain names, which will allow people like you and I to create new domain name extensions based on "any string of letters, in any script." The initial cost of setting up a new TLD could cost a few hundred thousand dollars.
Given that Google is already biased against some domain extensions (Google dropped .info names a month ago) and trillions of dollars have been spent advertising businesses connected to current TLDs, many of the new TLDs will be fighting an uphill battle from both a search relevancy standpoint and a mindshare standpoint.
When Google's Carter Maslan was interviewed about Google Local he stated
We are experimenting with how much verification vs. how much ease of use. There are variables as to when to prompt... In the past it had been too liberal, and is becoming more stringent. We are experimenting on the quality of the listings and spam. There is no hard yes or no answer to the correct structure.
That strategy works well for Google Local, Mahalo, Squidoo, Digg, etc. but new domain extensions will struggle with growing in a similar manner though, because there is significant opportunity cost to building something great on them, and if they are too lax and spammy they might get filtered out of Google's search results.
How might the marketplace react to an increase in the number of competing domain extensions?
- This will likely increase the .com premium for domain names (and local GTLD premium for .de, .co.uk, etc.) as more TLDs lead to more confusion in the marketplace, which leads consumers back to the default
- It might provide a cap the price that some generic names without businesses trade at. As noted by a person who commentedon this Domain Name Wire post, "Why would disney spend millions on Resorts.com when they can get their own extension for MUCH MUCH less and just go with Resorts.disney."
- I suspect .org names will still remain strong because so many organizations already use them and most non-profits will not be able to justify spending 6 figures on a domain extension.
- The .net domain name might suffer a bit, while some of the less meaningful TLDs (.info, .biz) will sharply drop in value
- Decent - but not great - .com names (like 3 or 4 word domains without much exact match search volume) might lose some of their value. I suspect even more of a drop for lower end .net and .org names.
What new extensions will do well?
- A few new generics (.web and .blog) might get some traction, but most will fail. Even if .com names keep increasing at 7% a year, there is a lot of certainty on going with the established standard, and a lot of risk in going with something brand new. Who knows if an extension might eventually go away after you spent years building a brand on it?
- The new TLDs will create a great opportunity for branded community websites built around memorable ideas and causes, but the backers need to be good at public relations to gain meaningful awareness.
- Some of the new TLDs will buy sponsors (like when Demand Media partnered with Lance Armstrong on Livestrong.com) to gain awareness, while others will gain mindshare by making hosting and other paid for services free and easy.
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