The domain name market in 2012 is clearly dominated by “.com” and that is not likely to change overnight. The list of new IANA approved TLDs coming online in 2013 may be only as successful as “.biz” or “.info” but at least they will be available via ICANN’s root servers. Credibility in the eyes of many is having a meaningful “.com” domain. Domain speculators don’t want to see this change as it dilutes the value of their holdings.
Today an organization would look at the difference of being “MyOrganization.com” or “MyOrganization.biz” and see that for their credibility the “.com” is worth a significant price premium for the domain name. They can also justify a high first year price as the rental cost in subsequent years is the same for any name. However with the plethora of new TLDs, like “Shop”, “App”, “Auto”, “Bank”, “Game”, and “Pizza”, the consumer will quickly become comfortable, and the “.com” premium is going to decline potentially radically.
The cost factor for the low budget domain holder
When a domain purchaser has a choice of “MyDomain.TLDA” or “MyDomain.TLDB” and the aura of “.com” is lessened, then free market completion will set a good price. If the operator of TLDA charges $35 per year and the TLDB is $10 per year then the cash rich buyer will look the marketing value of the TLD. However, the less affluent will see $25 a year in savings and be easily swayed. So on cost alone the availability of new TLDs will bring competition to the industry.
There is more than annual cost in this equation. It is policy not technology that requires domain holders to pay an annual rental fee for their domain. Enter the TLD that through technology truly sells domains and you have added a new dynamic to the equation. Clearly there is the cost advantage of paying once and not annually. There is no concern that the rental fee will increase over time. For the family enterprise the cost savings translates to perhaps a meal a year. But this goes well beyond cost.
The “.own” TLD, offered by ShofarDomain.com, states loudly that the domain is owned and not rented. This means the owner of “MyControversialSite.own” has a level of confidence that their domain is theirs today, next year, and as long as they decide to hold on to it. No corporate entity or government agency has the power to seize the domain via the TLD operator.
The brand name concerns and legal contests that revolve around “.com” will be lessened when there are tens or hundreds of TLDs to choose from. A brand or trademark holder cannot seize “ThisSoundsLikeYourBrand.own” by pressuring a TLD operator.
Weakness today, strength tomorrow
The weakness of the “.own” TLD is that it is not part of the ICANN’s root servers and therefore currently unreachable by most. However, this weakness may vanish over time. The whole concept of limiting root servers to those controlled by ICANN, like renting of domain names, is policy and not the limits of technology.
Just as Adobe’s PDF file and Flash files were for the limited few who had downloaded additional software in the 90s, they became de facto standards over time.
Those paying the $185,000 application fee to acquire a ICANN sanctioned TLD may not be keen on seeing some high school kid starting a TLD and successfully grabbing a healthy market share, but isn’t this what free market entrepreneurship is all about?
With the plethora of new TLDs and the prospect of domain ownership, “.com” has peaked. With its slow decline and new technology in the offering the door is open to multiple roots. The beauty of the web is that there is for most areas no central authority. The end of ICANN’s monopoly on TLDs and root servers will make that all the more true.