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DomainFest Panel: Opportunities in ccTLDs, IDNs and gTLDs

Raw Notes from DomainFest Global, February 2, 2011

DomainSherpa.com Exclusive Pictures from DomainFest Global, February 1-3, 2011 — You’re In there!

Panel: Opportunities in ccTLDs, IDNs and gTLDs

Experts: Daniel Dryzek, Daniel Eisenhut, Ken Hansen, Adrian Kinderis, Joerg Schweiger, Andrew Snow
Moderator: Mason Cole

From the program: “This session will help both new and advanced Domain Investors learn how to weigh the opportunities versus risks related to ccTLD, IDN and nTLD domains. Are there huge untapped opportunities awaiting the savvy investor?”

New TLDs Panel: DomainFest

Why ccTLDs?
Joerg: ccTLDs are not costly. Not hard to maintain (although many intermediaries offer a lot of add-on services). Internet traffic OUTSIDE the USA is growing rapidly, so ccTLDs might be a good strategy.
Adrian: “The risks associated can also be exploited in a positive way.” Regulatory bodies (ICANN counterparts) in country codes are not as stable. Countries can drop offline at any time (look at Egypt shutting down all Internet and text messaging service). It’s not all as well defined as ICANN. “Go in with your eyes wide open.”
Daniel D.: Be careful of the limitations of the ccTLDs. Look at the details of the agreements. Take time to learn about a country code. Spain has 1.2 million .es domain names, but also has 1 million .com domain names. In Poland the statistics are opposite, 2 million .pl domain names and only 200,000 .com names (10%). In Germany, 14 million .de domain names and 4 million .com names. UK (.co.uk) is second largest domain name ccTLD. Look at each country and find out what most people use.
Daniel E.: Go out and register ccTLDs now. Don’t wait until tomorrow. We’re all international companies. It’s a matter of trust, and if you have a local partner (with that country’s domain name) you should. If a company won’t even buy a local country code, maybe I shouldn’t trust them?
Joerg: Companies addressing local communities with local language and local domain names is valued by customers.
Andrew: Language markets determine a lot: look at nature of language market. ccTLD versus dot com has roots in original regulatory environment in USA. That’s why in France you have a lot of .com, because they had a lot of regulation. We will see continuous deregulation, so the trend in ccTLDs will continue.

What makes a ccTLD a market opportunity now?
Ken: In USA, .com has been dominant. A significant number of .us names are still available as a result. .us does well if the user is looking for United States content – Google ranking then ranks it higher as a result.
Ken: It’s important to look at the individual country when looking at IDNs and ccTLDs. .us you won’t get type in traffic, so it’s about development. In Germany, hyphenated domains do fairly well, but in the US they don’t. For IDNs, is the keyboard entry hard or easy for any given country? You have to look at these things and take them into account. Also have to look at maturity of the market: branding and marketing the ascii domain, and they’re not going to change their branding overnight and move to the IDN. In those markets, you may not see adoption as quickly as in new markets (emerging) when a standard hasn’t been chosen.
Andrew: The Russian IDN had 500,000 registrations in the first week; 750,000 now. It was the largest IDN launch to date. You want to market to the population in the language that they’re most comfortable with, because it’s all about mind share. Natural language is how you achieve mindshare.
Ken: Have to also look at your core competencies. Can you develop in Chinese content? Or is there a liquid market to sell it?
Daniel E.: Some countries have their own keyboard with special characters, like Germany. Needs to be a natural language character on the keybaord, not an accent or such.

Are we at risk for excessive regulatory involvement with domain names?
Adrian: You need to look at the details of the registrar. One registrar required Arabic for all legal documents, not English. Plus, any country can pull a website at any time. Political sensitivities, governmental motivations are key. Within the EU, we have an overlord that rules, if you do something wrong you’ll have a domain name deleted (not pulled). If you infringe trademarks, etc. it’s just gone.
Daniel D.: Yes. Governments around the world are trying to figure out why they can’t control it and what they can do to start to control it. That’s not good for the Internet, and for independence.
Adrian: With a government, there can be multiple groups that are conflicting and not communicating. It’s much more prevalent in ccTLDs.
Daniel E.: 15 million .cn domain names were registered. The registry then deleted 6 million .cn domain names.

Why do we need new gTLDs, what will their impact be?
Ken: Trademark community concerned in each of the new gTLDs. In general, choice is good. Giving registrants a TLD that best fits their brand, mission makes a lot of sense. Benefit apparent: Law firm could have long .com domain name or pay a premium price for a shorter one; .law then becomes compelling. Pricing of premium names in the market is another factor (small supply, high demand); that very fact demonstrates we need more supply to drive the prices down so users can get good names.
Adrian: There is an imbalance in how the Internet is accessed today, and nobody outside of ascii can access the same. Billboard in Arabic is in ascii, for example. Showed the government and said, “this is crazy.” Equal access, that’s what the Internet is about. Until we provide that, we are unequal.
Daniel E.: .nyc or others make sense because there are over a million people that never leave that city. jerryspizza.berlin makes sense.

Will Europeans ignore new gTLDs?
Joerg: Don’t know. What I do know is that habits are not going to change.
Ken: A big factor in user behavior is what they see everyday. Introduction of brand gTLDs will have an impact — over time. .ibm, for example, will have more attention to what is “to the right of the dot”. Area codes in the US used to only have one or two, and then as more and more phones were added you had to pay attention to the area code when getting a phone number.
Adrian: Startling that we’re not seeing more thoughts around innovation. It will not be on sales volume, it will be on domain name as utility. What can we do to play on content to the left of the dot?
Daniel E.: If users are going to use the new TLDs, it depends on the new search engines. If they rank .berlin above .com then people will get used to it.
Ken: Application innovation. Serving a community not or under served. I agree that applicants look at those opportunities.
Andrew: Does it add benefit to the consumer? That’s the end question that needs to be evaluated.

Should a domainer apply for their own TLD?
Adrian: Absolutely. They are and should. Maybe they’ve found a niche to bring traffic to people.
Daniel D.: I think the most successful gTLDs will be one that domainers do not buy. They’ll leave it to consumers and companies to buy and develop.
Ken: Domainers, with their expertise, should invest in new gTLDs. Said it a year ago. Think like this: a domain name is a building; a gTLD is land. You’re buying all the land in a vertical. You get to decide what names will be reserved and sold on a secondary market, set your own guidelines (within ICANN rules), how to promote and brand the use. Overstock with O.co, Twitter with T.co shortener, GoDaddy.com with X.co shortener. Large brands lends credibility and promote awareness.

Audience questions:

New extensions is good for ICANN, registrars, domain attorneys. It stinks for trademark owners because it forces them to buy more domains. All the new extensions (.museum, .web, .sfo, .web, etc.) are jokes and will create confusion, not benefit people looking for stuff on the Internet. Thoughts?
Ken: It’s not nirvana for new TLDs. ICANN has been working to address those concerns for 3 years. A lot of progress has been made. If New York wants there to be a .nyc, why shouldn’t they be able to do that? If an entrepreneur sees an opportunity to provide more access, let the markets decide.

I’m a new investor (18 months in industry). We’re creating new land on the same land. Why is this allowed?
Adrian: I don’t know what Google’s going to do. They’re in the business of providing quality search results. If your domains do that, all the rules that fall into the same algorithm now will continue.
Andrew: Technology advances rapidly. The human mind does not. It’s all about mind share. .com is well established. New will not take over old that quickly.

Bob Parsons of Go Daddy seemed put off by the question about ccTLDs and is not fully behind it. Why?
Adrian: After he was just talking about risk and driving forward, then he just clammed up. I’d say that Go Daddy will come into play, but it’s just speculation. Larger registrars are definitely going to be impacted. ICANN came out and said you can be a registrar and registry in the same TLD, so that’s another factor. If Go Daddy owns a TLD, then that’s something they could use to drive more revenue.
Ken: There will be opportunities for registrars and those who want to be registry/registrars. There will be niche TLDs that Go Daddy will not include because it’s just too small, but there might be other registrars that consider a few million dollars as significant (20-30% growth, say).
Adrian: Distribution will be key. People under-think it when they apply for a TLD. Registrars play a large part in the distribution part. If you can’t sell it to people, you’re out of luck.

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