After years of debating the topic of how successful the new gTLD program will be and what the effect of new gTLD’s will have on the value of existing extensions including .com.
Mostly every post has wound up with people arguing whether .com’s will win or the new gTLD’s will win.
Other including myself has voiced the opinion that many new gTLD’s can become quite profitable without any hugely negative effect on the value of existing domain extensions.
One possible outcome that I haven’t heard expressed anywhere before that everyone loses.
New gTLD operators, current registries like Verisign and domain investors could all wind up losing.
How?
We know there will new gTLD’s that will not be profitable businesses.
What if virtually none of the new gTLD become highly profitable?
Many maybe come marginally profitable businesses but not home runs considering the years and dollars invested.
New gTLD’s are going to have to measure profitability in light of including all costs, from application fees, travel to ICANN meetings for many years, to startup costs, operational costs including employees and marketing and the cost of obtaining the best of the new gTLD’s in contention that will be settled in private or ICANN last resort auctions.
I’m sure there will be a few BIG winner but what if there are a lot of losers and most wind up just doing OK, including the big portfolio players?
The won’t be in danger of going out of business, but they might not make the kind of returns they promised their investors or projected for themselves.
There are 265 million domain names registered and if every new gTLD hit their projected mark the domain space would have to double in the next year.
Maybe more than double.
Broker Ryan Colby in a post he wrote on his blog in November said in part:
“‘
The adoption of lean startup methodologies and the constant focus on “disruptive” innovation by CEO’s will continue to place pressure on the value of premium generic .com domains. While branding will remain an important fundamental for businesses, how one goes about developing that brand will change when there is an abundance of choices. This is simple economics, and the ROI for large capital investments continuing to flow into the monopoly of the .com string is becoming harder than ever to justify. The plethora of new gTLD’s will create millions of new marketing combinations available to saavy marketers.…
