Domain names, specifically internet Top Level Domains (TLDs), are increasingly an integral part of all business strategies and global brand development. Businesses spend many millions on domain names. There are many egregious valuations to demonstrate this phenomena including the amounts paid for: fund.com ($10M) , hotels.com ($11M), privatejet.com ($30M), insurance.com ($36M) and lasvegas.com ($90M). TLDs have a recognized quantifiable commercial value. Take fb.com ($8.5M) which was purchased by Facebook to redirect to facebook.com; iCloud.com ($6M) purchased by Apple for the same reason. And what about your company, your brands and your country code domain names?
If you want to get on the domain name trail, just follow the money. The web abounds with money making domain name retailers, from the institutional, to individuals and corporate syndicates. Domain investment research has reached new levels: “Cyberspace is no different from traditional cities, at least in economic terms. In a basic city model, you have a business district to which all residents commute, and property value is determined by proximity to that hub,” is one of the gems to be found in Dr Thies Lindenthals’ (University of Cambridge) “Monocentric Cyberspace: The Primary Market for Internet Domain Names”. I also love this quote: “Legend has it that Mark Twain advised to buy land, since ‘they have stopped making it’. Similarly, one can argue that investing into top level domains is a promising business venture, since we have stopped inventing language, at least at a large scale”. Verisign, a leader in global domain names and internet security, tells us that “the second quarter of 2016 closed with approximately 334.6 million domain name registrations across all top-level domains (TLDs), an increase of approximately 7.9 million domain name registrations, or 2.4 percent over the first quarter of 2016. Domain name registrations have grown by 38.2 million, or 12.9 percent, year over year”. This business is growing, and fast.
Let’s get some common understanding of the plethora of terminology here as well as a little history. Internet TLDs are those root extensions in the Domain Name System (DNS) of the internet. The official list of domain extensions can be found here. In 1985, the web started with just 6 TLDs: in 2015 this number grew to over 1000 and today, in November 2016 we have >1,500 and this list grows each year.
Number of top-level domains over time
Data sources: IANA, The Register
- infrastructure top-level domain (ARPA)
- generic top-level domains (gTLD)
- restricted generic top-level domains (grTLD)
- sponsored top-level domains (sTLD)
- country code top-level domains (ccTLD)
- test top-level domains (tTLD)
The number and value of domain names has boomed. Way back in 1985, there were just 6 registered domain names. Famously, for those geeks interested in internet history amongst us, the first .com registered was on March 15th 1985, by an American Massachusetts based company called Symbolics, that registered www.symbolics.com. Today we have >350M domain registrations almost half of which end with .com (128M), with .tk (18M) and .net (16M) the next big leaders. Catching up fast we have .cn (for China) which is now in 5th place. In 1998, the US administration privatized the Domain Name Systems (DNS) and the Internet Corporation for Assigned Names and Numbers (ICANN) was formed: “a not-for-profit partnership of people from all over the world dedicated to keeping the Internet secure, stable and interoperable.”
By 1997 all the three letter .com domain names had been registered. By 2003, due to the level of domain name deception, it was necessary to begin legislating, leading to the Truth in Domain names Act. By 2007, investors were prepared to pay exorbitant prices: $35M for vacationrentals.com as an example. In 2012, a single speculator registered 15,000 domain names in 24 hours, going on to profitably sell them. By 2013, all the four letter .com domain names had been registered. In 2014, we had the internet version of the Big Bang, with the addition of 100’s of new TLDs. To learn all about it, check out this fun video.
As well as the principle domain name you select for your business, if you have international ambitions, country code top-level domains (ccTLD) are crucial building blocks. These are the two letters after the full stop in a domain name, (example "US" in www.domainname.us). The importance relates to the nomenclature which is the strongest method of telling search engines and users in what country the website is registered. This is linked to the optimization for localized search engines. Technically the two letters use the ISO 3166-1 country codes, although there are a few exceptions where ASCII identifiers are used, for example the .uk versus .gb. For Arabic and Chinese and other countries that use different alphabet systems, these ccTLDs are available with non-Latin characters. These are called internationalized country code top-level domains (IDN ccTLDs or ccIDNs). Today ICANN assigns ccTLDs, which are then managed by their respective countries. We now have 292 ccTLDs with the top ten being: .tk (Tokelau), .cn (China), .de (Germany), .uk (United Kingdom), .ru (Russian Federation), .nl (Netherlands), .br (Brazil), .eu (European Union), .au (Australia) and .fr (France).
Our recommendation is to grab those ccTLDs where you are HQ’ed, as well as where you are intending to do business. But do know that there is a cost both financial (registration and hosting) and in terms of management time (someone has to do it!).
Source: Verisign, The Domain Name Industry Brief, 2015
OK, if like me you are asking what is .tk and why is it such a popular ccTLD extension, here is a clue. Use is free of charge. The .tk country domain stands for Tokelau, an island territory of New Zealand, consisting of three coral atolls, about three square miles, 1,400 people, no airport or seaport. The domain is one of the major sources of phishing e-mails, sourced mainly from China!
Looking to the future where are TLDs going? Since 2014, the >1,000 TLDs have been making the market showing us that we do not all have to be .com. In fact, it is clear that the future is not .com. Registrations number in millions, savvy businesses are grabbing their “not-com” online territory, relatively speaking .com is declining. Referring back to the Lindenthal study, he states “Clearly, corporations and entrepreneurs have trust in the new domains being able to serve a previously unmet demand". We now have a huge range of domain possibilities. For professionals look at .accountant, .attorney, .consulting, .photography, and more for the legal profession, .legal. In-fact everything goes: .apartments, .coffee, .bingo, .training, .tips, .systems, .expert… For cities try .London, .NewYork, .Paris… The possibilities and ramifications are endless. Don’t hold back, go for it! To show us how, 'Alphabet', Google’s holding company, acquired http://www.abc.xyz. Go and check it out!
