ICANN Approves Broad Expansion of Top Level Domains (TLDs)

Jun 28th
posted in

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.
Published: June 28, 2008

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Comments

June 28, 2008 - 7:21pm

Hi Aaron,

I think the most powerful of the new names will be the new Geo's. names like .paris, .nyc .berlin. These extensions will be desirable and will prosper.

A lot of people in the domain industry are freaking out. But the reality is, every market needs expansion. If it doesn't expand it stagnates.

The domain industry seem to think that joe from just down the street is going to go out and buy his own extension. Thats just not going to happen. All the valuable extensions will be eaten up buy the guys at the top. No doubt guys like Schilling and Schwartz saw this coming a mile back and have got their applications in to ICANN already. Some extensions will go to market. Some extensions will be held back for private use.

June 28, 2008 - 8:47pm

Just like a bad link neighborhood, cheap domain extensions can breed their own bad neighborhoods. Aware and legit players tend to stay away.

On the other hand, if someone registers their own top level domain extension, and uses it for 5 domain names, that may serve as a very strong signal of quality. Most certainly Google, MSN, and Yahoo give developed generic names weight already. This takes it to a whole new level.

Whether its good, bad, or confusing, I can't make that judgment. Most people still seem confused by any extension outside of the most used in their region.

June 29, 2008 - 10:24am

From my experience I do not think Yahoo! puts a lot of weight on the domain name but Google and Microsoft do. Yahoo! does put a lot of weight on anchor text though, which is often guided by the domain name.

June 28, 2008 - 9:22pm

This is Andrew from DomainNameWire.com. Just a comment on the second bullet referencing my Domain Name Wire article. The part about resort.disney was actually from a comment on the article. I don't actually agree with the comment.

Thanks

June 29, 2008 - 10:25am

Sorry about that Andrew. I will update the post to reflect that it was from a comment.

June 29, 2008 - 8:12am

I don't think any of this is really going to take off. People are forgetting the basic idea of "usability". People will hear of a name like site.disney and they will go to disney.com. If you brand .whatever you will essentially be branding whatever.com.

June 29, 2008 - 9:48am

I think that we do need more available domain names, as we seem to have reached a saturation point in some of the more popular fields. Clients time and time again are telling me that they are disappointed with their domain name but picked it as a last resort, after trying many more popular alternatives which were all taken, mostly and annoyingly with "holding pages"

June 29, 2008 - 9:56am

I think is this much ado about very little. With exception of some reasonbly obvious adult names, I don't think there is much value for any of these new extensions and people will gravitate back to what they are familiar and comfortable with.

June 30, 2008 - 12:02pm

I think this is going to confuse the hell out of the users. Currently users are conditioned to add one of the TLDs to the end of an address so in the case of resorts.disney they will be trying to get to resorts.disney.com as that is what most users are conditioned to do.

June 30, 2008 - 12:13pm

Oh dear I think I can hear Jon Postel Spinning up to a decent fraction of C

well $250,000 to $500,000 for the domain plus the cost of biding plus the cost of seting up a suitably robust infrastructure ICANN aint into web 2.0 crapapy uptimes and thats about one of the few good things about them.

if belin gets its domain how long till some one tries to get bunker.berlin so the can have the email hitler@bunker.berlin

I can see a lot of VC money going down the toilet on this one .coop and ICANTS delays took down Poptel

July 3, 2008 - 11:43am

Hi Aaron,

I don’t understand why ICANN has kept the cost so high? Does it really take so much to book a domain?

I think .com will still be popular more so because its there in our subconscious mind. Whenever someone says blah blah about a website, the next thing we do is search as “whateverhesaid.com” in the search engines.

Only time will tell how popular these domains will be. Though I am sure big personalities might buy these domains such as paris.hilton, bill.gates, or even aaron.wall ;-)

What do you think?

July 3, 2008 - 1:56pm

I too think that .com will keep on rocking.

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