The way businesses and consumers use the Internet could drastically change in 2013 as ICANN prepares to launch over 1,000 new gTLDs (Generic Top-Level Domains) to go alongside .com, .net, .org, .edu and others.
As early as April this year, we could start seeing new, descriptive gTLDs including .Sport, .Money, .Music, .Health, .Gay, .Shop and hundreds of other strings percolating the internet as well as brand gTLDs such as .Google, .Amazon and .Airbus.
The question on everyones minds at the moment however is, "How successful will these new gTLDs actually be?" and "How quickly will consumers warm to them?"
The .com extension has been around so long that it's practically synonymous with the Internet, hence the expression the "dot com bubble". Just how much marketing, investment and branding would be required for any of the new gTLDs set to be launched on April 23th to usurp the .com is up in the air.
When ICANN voted to open the floodgates for thousands of new gTLDs in 2011, the CEO stated is would "allow the domain name system to better serve all of mankind".
However, critics such as Michele Naylon have argued that many of the new closed gTLDs applications will do the opposite. Generic words such as .blog, .cloud, .beauty, .app and .book have all been reserved for the big brands including Google, Amazon and L'Oreal, in what can only be described as a patulous attempt at control the growth of the internet. What right does Johnson & Johnson have for example to limit .baby for its own use? Or .app (Amazon), .book (Amazon) and .hair (L'Oreal) for their own use?
A number of key experts in the industry feel many of the new gTLDs will fail and simply reinforce the .com extension. They cite traffic leakage and consumer confusion as the main reason for .com to prevail. This is precisely what led to Overstock.com switching back from O.co to Overstock.com after reporting 61% brand leakage to O.com. Email leakage is also a concern as emails originally intended for adam@money could accidentally end up at firstname.lastname@example.org. When I spoke to the owner of BinaryOptions.com, he reaffirmed this belief, stating that premium domains on .com will only continue to soar in value as new sites launched on .trade or .trading cause more confusion for consumers and generate more traffic leakage to the .com.
If there are so many reasons against the introduction of new gTLDs then you're probably asking yourself, why do it in the first place? The answer is money.
ICANN, the non-profit organisation responsible for managing the Domain Name System, is set to earn hundreds of millions of dollars from the new scheme. At $185,000 per application and close to 2,000 applicants, they'll make close to $350 million from the scheme (this number excludes additional rounds of applications for gTLDs).
Registrants such as Donuts.co, who are backed by billion dollar hedge funds, have already invested more than $50 million in hundreds of the most popular, descriptive gTLDs such as .web, .online, .health and .sport, could potentially double or quadruple their innitial investments in reserve and premium domain auctions. You only have to look at the success that .xxx had in land rush and premium domain auctions (including the sale of Gay.xxx for $300,000) and defensive registrations, to understand the money that is going to be made by these guys.
The new gTLDs don't need to visibly successful or compete with the likes of .com in order to make money. At $50 per year registration, they only need to sell 10,000 domains to break-even, and then a couple of thousands domains per year to keep maintain liquidity. This is in comparison to the 100-million .com domains that are already in circulation. It's all just a moneymaking scam really, because the businesses that buy into these new domains could end up seeing the registrant going bankrupt in some cases.
Personally, while I think the majority of domains simply have to fail, I can see short, descriptive domains that serve an obvious purpose such as .Law, .Marketing, .Shop and .Music, as well as those that appeal to the Asian markets in their own language, being successful. Geo gTLDs such as .London, .NYC and .Berlin will also have early success, since many local businesses will buy into them.
The one demurral I have is that we've actually been here before with .Biz, .Aero, .Info, .Travel, .Mobi, .Jobs and .Museum - all of which have completely failed to make a dent into the dominance of the .com marketplace. It's all relative however; becasue even though the.info isn't visibly used on big brand sites, it still has over 5.5 million registrants, making it one of the most successful gTLDs in history.
In conclusion, while the likes of .web could become instant successes, we're unlikely to see any of the new, descriptive gTLDs compete with .com this year, or even in the next five years. The most successful new gTLDs won't be ready for launch and developed until 2014, and even then it will take another few years for new descriptive and brand gTLDs to make an impact on how we use and search the web.
Adam Grunwerg is a Director at Searchable Online Marketing and an expert on the new gTLDs and how businesses should prepare for them. Visit his blog for more information.