Many try to talk about the new gtlds in very simplistic terms, naysayers just want to group them altogether and say they suck, failed, are dead. Proponents want to say they are the future, give them time, .com is AM radio.
I would argue the new gtlds are a much more complicated animal. There are many things to look at in both the short and long term. This is the first chapter of a new series looking at the new gtlds.
All fault starts with ICANN
When we start discussing the new gtlds we need to start with ICANN. It was June 2011 when ICANN announced the following:
Singapore | ICANN‘s Board of Directors has approved a plan to usher in one of the biggest changes ever to the Internet’s Domain Name System. The Board vote was 13 approving, 1 opposed, and 2 abstaining.
During a special meeting, the Board approved a plan to dramatically increase the number of Internet domain name endings — called generic top-level domains (gTLDs) — from the current 22, which includes such familiar domains as .com, .org and .net.
“ICANN has opened the Internet’s naming system to unleash the global human imagination. Today’s decision respects the rights of groups to create new Top Level Domains in any language or script. We hope this allows the domain name system to better serve all of mankind,” said Rod Beckstrom, President and Chief Executive Officer of ICANN.
New gTLDs will change the way people find information on the Internet and how businesses plan and structure their online presence. Internet address names will be able to end with almost any word in any language, offering organizations around the world the opportunity to market their brand, products, community or cause in new and innovative ways.
“Today’s decision will usher in a new Internet age,” said Peter Dengate Thrush, Chairman of ICANN‘s Board of Directors. “We have provided a platform for the next generation of creativity and inspiration.”
The decision to proceed with the gTLD program follows many years of discussion, debate and deliberation with the Internet community, business groups and governments. The Applicant Guidebook, a rulebook explaining how to apply for a new gTLD, went through seven significant revisions to incorporate more than 1,000 comments from the public. Strong efforts were made to address the concerns of all interested parties, and to ensure that the security, stability and resiliency of the Internet are not compromised.
ICANN will soon begin a global campaign to tell the world about this dramatic change in Internet names and to raise awareness of the opportunities afforded by new gTLDs. Applications for new gTLDs will be accepted from 12 January 2012 to 12 April 2012.
ICANN made several mistakes in creating the chaos that is the new gtld program.
Price Caps
Not implementing price caps was a big mistake on the part of ICANN, they certainly could have done this if they wanted to. Are we to believe no one would apply for an extension unless they had infinite pricing power ?
Quantity
There certainly should have been a much smaller number of non brand specific new extensions. ICANN should have realized the confusion and chaos that flooding the net with so many new extensions would bring.
Singular vs Plural
ICANN certainly should have mandated one or the other. They could have told all participants interested in certain strings that only the version with the highest number of applicants would go into the root.
In the next chapter we will look at the applicants.
I like it, interested to read the whole series.
Excellent synopsis, Ray!
Thank you Joseph, and congrats on the new job.
99% of the problem is that the general public don’t want or need ntlds. They were pushed by registrars and registries.
Ntlds would have failed no matter how it was done, just like the previous attempts. Currrent events are just speeding up the demise.
I am most scared of buying into a GTLD, and they sell them for a few years, sites get built, then they jack the price by 5000%, which they are entitled to do.
Who suffers?
Fine you don’t want to renew, they will reserve the name, relaunch the extension at a lower price, and attempt to recoup even more money upfront.
The system is broken, it is one sided, no thanks
Great post, thanks.
Aside from the two issues you’ve mentioned – price caps & singular / plural, the main reason I wouldn’t ‘invest’ in ntlds is that the registries reserved all the best names for themselves.
Between these three reasons there is no space for investors in ntlds imo. In fact I said so as much way back when (check the link on this comment).
There is however still a use case that can be made out for some, but the negatives far outweigh the positives currently and unless registries address this, things are not going to improve.
Samit makes a good point about registries reserving the best names for themselves.
Reserving a batch of 100 names (or less) would be understandable, but the hoarding and premium pricing that some registries are doing is self-destructive. It indicates that the registries think too highly of their inventory. In an era of inventory overload, if a registry makes too much of its inventory inaccessible, buyers will simply go elsewhere and the TLD will be forgotten.
MS-DOS was one of three available PC operating systems when it first came out. It was arguably the worst of the lot, but because it was the cheapest, it ultimately prospered while the other two have long since been forgotten.
When .IN was released, one registrar (whose successor is now a leading registry in South Asia) hoarded many of the best names. This hobbled the ccTLD for many years. As a ccTLD with a huge pool of potential registrants, .IN was eventually able to rebound. There may be no rebounding for some of the nTLDs that have been hobbled by registry hoarding and premium pricing.
Whether a registry hoards or whether it sells everything cheap to domainers the effect on usage is much the same, it is stifled. Domainers just don’t like it when the registry takes their place.
A registry hoarding its inventory is like a startup founder selling his or her shares before the startup has achieved escape velocity. This is why vesting periods are instituted—to prevent the decapitalization of fragile young companies.
Removing SLD inventory from the market by charging inflated “premium” prices means that a registry’s best capital is unable to be put to use, and is unable to earn.
The odd, sporadic sales of high-priced “premium” nTLD domains are, in most cases, merely exceptions that prove the rule. If there was legitimate competition for specific nTLD domains, from which a registry could extract surplus value, this would have been addressed by auctions between competing registrants during the landrush phase of an nTLD’s release.
In summary, the hoarding and pricing practices of some registries has effectively decapitalized the branding power of many new TLDs.
With an auction though the result is much the same, domainers win the auction and nothing happens with the name.