Monday, June 17, 2013

New gTLD Applicants: Are They Morons or Geniuses?

By Zak Muscovitch.

If I was great at business I probably would have not have become an Internet lawyer. That being said, through my work, I do see a lot of successful and unsuccessful businesses, and have learned a thing or two about the domain name industry over the past 14 years. Whenever I read about the new gTLD's, I always have to ask myself, are these morons or geniuses?

I have resisted openly commenting on the business case of new TLD's for some time since I know so many people who are involved in them one way or another. Nevertheless, whenever I read about the new TLD's, my immediate reaction is that for the most part, new TLD's will never fly. I can't help but think of other extensions such as .museum, .aero, etc., and also wonder why anybody would really want to buy a new TLD domain name. Do you really want an email address of john.smith@fresh.apricots? Will, for example, Samsung really want or need Info@Samsung.Televisions or www.Televisions.Samsung? The whole thing makes absolutely no sense to me, frankly. I just don't see the market for nearly any of them, making we wonder whether investing in them is moronic.

But, on the other hand, when I see big money being raised, when I see very successful businessmen involved, when I see that the people behind the new TLD's are far more adept and accomplished in business than myself, I think maybe instead of being morons for paying $185,000 per application, they are actually geniuses.

Take for example, Internet entrepreneur, Colin Campbell, whose prior successes include Tucows Interactive and Hostopia.com. He is leading the effort to launch .Club as a new gTLD. His company, .Club Domains, LLC just "won the rights to the new gTLD via the first "private auction: to be completed since ICANN began the new gTLD process". In its press release, .Club Domains LLC also announced that it had exercised its option to complete a $7 million funding round". Bottom line, if an Internet visionary and entrepreneur like Colin Campbell feels that .Club is worth being the successful bidder for, and that it is worth  investing $7 million in, then who am I to question his business acumen. Even though I don't "see it", it is likely that he "does see it", and is therefore likely a genius rather than a moron.

Also take for example, Frank Schilling, a domain name pioneer and incredibly successful and adept businessman. He applied for a reported 54 top level domain names. Again, I don't see the market for these 54  new gTLD's that Frank Schilling's Uniregistry company applied for, but he ought to know better.

Accordingly, guys like Campbell and Schilling are extraordinarily well placed to see the future of domain names, and perhaps that is what makes them leaders, because they see what many don't. Perhaps they see business opportunities that exist apart from actually selling domains to registrants. Accordingly, I am prepared to, and want to believe, that they are geniuses when it comes to the new gTLD's, despite my initial and current scepticism.





4 comments:

Anonymous said...

Bubble that will blast after couple of months. Lots of registrant will spend some money, which in total should make some nice profit for people behind the new gTLD applications. But short term only. The most important point is that it will become useless, worthless and it will lead to a lot of problems which will make Internet worse and even dangerous. Well, human do mistakes. Watch for many coming...

Samit said...

The registries won't lose imho.

It will be the 'domain investors' who will lose their shirts.

Even the smallest registries should be able to recover costs + profit for their principals.

David said...

Samit makes a good point. Also. Lots of registrations are going to premium prices some single word or especially desirable names. If you can get a few people paying a couple hundred for one worders like collaborate it'll go a long way to at least breakeven.

Getting a successful one like a .co (the success it's had still makes no sense to me since it's so easy to confuse with .com) with a million registrations and you're looking at a hugely profitable business. I think alot goes to how catchy and versatile the ending is.

However, even catchy extensions like .pro really haven't caught on. So I'm overall not big on non-.com stuff generally. I sell only .com so I might be biased.

Unknown said...

I'm having trouble agreeing with some of the dismissive comments regarding gTLDs.

Are they going to make a lot of money of the people who buys them? Absolutely.

But the lack of domains is a real issue. You can almost type random characters and a .COM will already exist with that name.

Of course, it is expensive, and it becomes an issue for those trying to protect trademarks. But I think the popularity of the Web and the lack of available domains will drive the new gTLDs onwaord.