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Other Domain Investors' Opinions

On domain issues, the author is frequently in broad agreement with the opinions of the leading domain investors and bloggers. For example, everyone seems to universally agree that .com will continue to rule the domain world.

But surprisingly, opinion diverges dramatically when it comes to speculation about the impact and significance of the new domains. A majority of domain experts seem to believe that the new strings will not be particularly significant.

Further, anonymous disinformation trolls are posting anti new gTLD comments on various domain blogs — presumably to reduce future competition in the forthcoming goldrush.

However a small group of domainers (including the author) believes the impact will be great. This is not incompatible with also believing that dot COM will continue to be the world's leading domain extension. See also What Investors Are Missing — last par in column at right.

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The most notable exception to the conventional orthodoxy is Frank Schilling, considered by most investors to be the Warren Buffett of domaining. His company Uniregistry is applying for more than 50 strings. A telling comment he has made about the domain industry is that the dot COM space is "exhausted" (while simultaneously fully believing in the power of the dot COMs). See more about his opinions on the Brand Domains page.

See more opinions under Milestones on the Background page and under Comment on the Objections page.

The Precedent

The evolution of the internet naming system and the rise of .com as the benchmark string is widely understood. A paradigm has evolved driven by 25 years of demand from web surfers and market forces around the world.

While it hasn't been possible for everything to be totally fair and even (given the uniqueness of every single domain name), until now it has been a reasonably level playing field. However, this equality is not guaranteed after the arrival of the new domains.

So under the pre-2013 paradigm, while one company owns the premium domain Candy.com, at least rival merchants like Mars Confectionery or Cadbury have had the commercial opportunity to acquire a name like CandyStore.com, OnlineCandy.com or BuyCandy.com on the open market should they wish to. Catchy and prestigious names that could compete with Candy.com with just a "little" extra effort in marketing.

This is fair competition in commerce.

ICANN has overlooked the wisdom of the paradigm. Discarding the paradigm is being revealed to be seriously anti-competitive.

Continuing the example, if Amazon wins its application to operate the .store registry (not to mention .shop) then it will own all the valuable domains Candy.store, OnlineCandy.store, BuyCandy.store and many more in exclusivity.

Bad luck for Mars Confectionery and Cadbury and every other confectionery company. They will be prohibited from owning any names in the .store or .shop string. The door will be closed.

Bad luck if you sell books. Bad luck if you sell phones. Bad luck if you sell apparel, furniture, cars, software, gifts, dvds, stationery, cameras, skis, printers, flowers, parts, apps, guitars, t-shirts, luggage, tools, watches or appliances. Under the closed gTLD model, one privileged company intends to own every single domain in that category.

Author Disclaimer

The owner of Super Monopolies is a web developer and domain investor etc (and owner of around 1000 dot COM domain names). As at 2013, he has no financial involvement or investment in any of the forthcoming new domain strings or registries. He does intend to make a small investment in a modest number of individual domain names (if the desired ones are offered for public sale!) His prime motivation for building this website is to promote a fair and free internet — one of the great achievements of human civilization — not to assist what might possibly be some future personal investment.

In any case, as the owner of 1,000 .com domains, he believes that the era of closed registries, if they ultimately come to pass, will actually increase the value of his portfolio by eliminating alternative possibilities to his customers.

 

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Opinion

It is very hard to make predictions when there is no real precedent for a scenario. So this page represents a hypothetical scenario, not a prediction. There are so many variables and possibilities, nobody can possibly know how the launch of over 1000 new domain extensions will play out.

Remember, in the earliest days of the internet, domain names worth up to $10m each today, sat there, unregistered. Great is the wisdom of hindsight.

The only comparable precedent for the rollout of the new domain strings can be seen in the creation of the original World Wide Web a generation ago — and we all know how unpredictable and unknowable that was. An oddity created by a bunch of computer scientists evolved into the global infrastructure of commerce and entertainment and information we appreciate it to be today.

To illuminate the unpredictability of it all, the very first domain name registered was not Insurance.com or Bank.com or Phone.com — priceless names we all know are worth many millions today. It was Symbolics.com, a name created simply to provide a communication function. The key point is, nobody had any idea of the commercial potential of domain names or the rise of the internet back then. The totally unexpected happened. This turned out to be very good luck for the rise of fair and free web commerce. The dynamics are going to shift again.

It is also highly probable that some wildcard play or unintended consequence or out-of-the-box event will eventuate from the new domain releases. So don't expect the expected.

Whatever does happen in the next few years will surely be immensely significant in the history of the internet and online commerce in some shape or form.

"The root of the domain name system is a single public resource, by design. Its control must be for and, indirectly, by the people as a whole. To give away a large chunk of this to a private group would be simply a betrayal of the public trust put in ICANN."

Tim Berners-Lee 2004 opinion (in a different context to the proposed new closed gTLDs of 2013/14)

Super Monopolies

There is a high risk that some corporations, already the global market leaders in their respective categories, will acquire and hold in exclusivity and in perpetuity the best and most relevant keyword domains in various industries, shutting out their competitors, and build mega monopolies.

Case studies have been made of clever and innovative companies leveraging the power of a single prestige domain name to seriously challenge the market supremacy of the existing market leader. This is well understood by experienced domain investors, and explains why supreme domains like Funds.com or Business.com have sold for millions of dollars.

Such domains illustrate why a single word, to the left of the dot in a .com, can be so important.

Soon, the word to the right of the dot is likely to be very important.

The power and influence of a single domain can be massive. The power and influence of exclusively owning an entire domain string can only be speculated about, since this is an entirely unique scenario. It's easy to see the serious anti competitive risks. They are described here on the ICANN Forum pages. Yet is this principle even understood by ICANN?

toy store button exampleSo what happens when a single company is allowed to own EVERY left of the dot word in one of the new TLDs, as well as the right of the dot? No-one knows for sure, but by allowing it, a huge potential risk of building mega-sized domain "walled gardens" is being taken. Imagine the implications if one company is permitted to own every single .store domain name in existence as discussed in detail on the .store page.

pull quote graphicIn a worst case scenario, once in the possession of a single entity, how colossal and overwhelming will the market power of new strings like .news be? Especially in the light of the way traditional media companies are falling like ninepins — for instance the news in October 2012 that Newsweek would cease its print edition and go entirely online. Yet if Amazon becomes the owner of the .news string, then Newsweek will be prohibited from owning the domain Newsweek.news. Quite a few famous newspapers have found their print editions to be in trouble, as everything seems to be going online.

The New York Times will be prohibited from owning NYT.news. The Guardian will be prohibited from owning Guardian.news. The Age will be prohibited from owning Age.news.

Yet at the very same time, ICANN is presiding over monopolistic grabs for huge potential categories to be exclusively acquired, such as the .news string, at the very time when media companies need to succeed online to ensure their survival — and to secure the jobs of their employees.

Fast moving, innovative, cashed-up, intelligent, first movers on the internet have a natural propensity towards monopolization — they don't need ICANN's assistance to achieve that end.

"...as with most web-based businesses, only one will be left standing in the end. There aren't two Facebooks or Amazons. Domination and monopoly is the name of the game in the web marketplace."

David Byrne in The Guardian. Commenting about the rise of music streaming websites and their negative impact on musicians. David Byrne: 'The internet will suck all creative content out of the world'

.com will reign supreme

Most of the top domain investors and bloggers, if not all, say that .com will continue to set the gold standard for domain names into the foreseeable future. I agree with that...

However, many domainers then conclude that it follows that the new strings will be minor in significance, and hence not significant enough to warrant their attention. This is where I disagree...

It's likely that the most significant part of the growth of the internet in 2014, 2015 and beyond (nobody knows how big or for how long) will occur around the new strings.

This growth will be led by the rise of the dot brands.

Billions of dollars (and euros etc) will be spent in this space in years ahead.

The brand domains will cut through the old perceptions of the structure and navigation of the internet.

Visionary companies like Canon will spend unprecedented millions of dollars building their brands, prestige, authority and reputation with domains like: Camera.canon, Photocopier.canon, Printer.canon, Eos.canon, Upload.canon, PhotoTips.canon, Instructions.canon, Gifts.canon, Service.canon, Guide.canon and News.canon. Every Canon store will be able to have a dedicated site, Piccadilly.canon and Honolulu.canon.

There has even been speculation that every camera, for example, will be able to have its own dynamically generated "virtual website". So if you just bought a new EOS 20 megapixel, you just put in your serial number like: 123456789-canada.canon and presto — you get a robot loaded website displaying your model, manual, instructions, warranty & service details, photo tips, an upload album already linked to Facebook, a coupon offer and whatever else besides.

This speculation is really just to illustrate that the world's biggest companies with the world's best designers, marketers and pr experts — not to mention biggest bankrolls — are going to try some highly innovative and unprecedented campaigns.

Just imagine the SuperBowl commercials in 2015.

Just imagine the possibilities.

It's possibilities like these that will drive and create new business and differentiate the visionary companies in a positive way from competitors without the foresight or scale to apply for their own dot brand.

In the Fortune 500 and beyond, there will be the 'haves' and 'have-nots', the ones who 'get-it' and the ones who don't.

If you are a loyal Canon customer and just want to upgrade your camera, how simple it will be to just go to Camera.canon or maybe even the specific model name followed by ".canon". Easier than going to a huge company site like Canon.com and wading through all the products to try to find the particular camera or specifications section you specifically want.

I tried this (I recently bought a Canon camera). I went to Canon's website and had to navigate through four or five screens to find a page about the Canon EOS C500. Took more than a minute.

I can't wait to be able to compare that to one click navigation via: eosc500.canon

Or as speculated upon above, maybe you'll be able to go to your personal camera's website and click on a Canon loyalty offer for a discounted upgrade.

Read more on the dot brands page.

Non .com sales to date

OK — it sounds like a contradiction here. ".com will reign supreme" yet there is also a very real possibility that "the most significant part of internet growth will be in the new strings." The explanation is that yes, dot com registrations and commerce on dot coms will continue their spectacular growth (likely 10-20 per cent year on year or whatever it is now) and the trajectory will continue.

But the dot brands, with billions of dollars in marketing money behind them, will likely explode in a transformational way and in the dollar value of commerce on them.

Domain names like Canon.com and Apple.com will continue to be corporate flagships and portals and highly visited. But the plethora of new dot brands like Printer.canon, Sport.nike, Android.google, Camry.toyota and iPhone.apple will with implacable force become highly ranked ecommerce sites in their own rights.

Interested in the new PS4? Simple — go to PS4.microsoft in one click.

Some major brands have already spoken about the possibility of migrating their .com domains over to their new .brand domain identities — this depends on how the next few years play out and how consumers respond.

Previous non .com sales figures may well give some indication of the potential value of the new domain strings.

Because non-dot com names like Meet.me have sold for six figures in the past, that indicates that intuitive keyword domains in the new extensions will be highly valuable in time. New names like Bank.loan and Play.game and other hypothetical new names mentioned elsewhere on this site seem certain to have very great value.

new domain sampleIf the domain Candy.com sold for $3 million, why wouldn't the name Candy.store similarly be worth a six or even seven figure sum in the same ball park, given time? Doesn't it have the same relevant, intuitive and memorable meaning? The only obstacle is the not insurmountable dot COM 'habit'. The dot brands will be working hard to break that habit. (Please also see The Precedent in the column at left.)

"The new gTLDs will replace the need of a generic extension. (my emphasis) Current two word names e.g. artdesign.com will become design.art and people will love it. Gibberish dotcoms will vanish. For example the value of artdesign.com will be reduced since it will get more competition on the same niche." Toujou — Commenter on TheDomains

There are of course countless people who believe the opposite, and they do have some valid arguments.

Time will tell.

What Investors Are Missing

What most domain investors and commenters seem to be missing (or at least those who aren't deliberately keeping strategically quiet or spreading misinformation) is that the next big game is going to be with the new gTLDs. That's where the action will likely be. Sure, dot COM will 'reign supreme' and their values will rise 10, 20 percent year on year, and their valuations will continue to mightily exceed any single rival. But some of the names in the new domain strings — and the art will lie in determining which ones — will rise in value 1,000, 2,000 percent or much more. Now that is real action.

 

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SuperMonopolies.com — A hypothetical analysis of the new top level domain names — coming in 2013-14.

 

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