Will 2014 Be a Breakout Year for the Domain Name Industry?
Generic Top-Level Domains: Will they spark a revolution in online real estate?
Michael Berkens at The Domains reported a surprising fact earlier this year in which ICANN estimates that new gTLDs will generate less than 10% of the revenue of existing domain names in 2014.
According to figures in the 2014 Revised Budget ICANN will receive $81,115,000 in revenue from existing TLD’s and only $7,043,000 revenue from new gTLDs.
This may be due to the slow-process of approving hundreds of gTLD applications or plans to approve and release them in batches.
I’m no financial analyst, but could they be selling themselves short? I think the answer is pretty clear for two main reasons: rapid growth and adoption we’ve seen in past gTLD launches and the drive of domain investors.
The .CO Example
I think ICANN’s figures may turn out to show a gross underestimation of the potential of new gTLDs, as we have witnessed with .CO domain names in recent years.
A past DotSauce poll on .CO shows that 43% of respondents predicted .CO domain names would become mainstream in 2011.
It’s 2013 and .CO domains are being used by startups, individuals and small businesses as a viable alternative to the crowded .com space. I imagine you’ve already seen them in use (T.co, Vine.co).
Another earlier DotSauce poll asked for predictions on which new gTLDS will be the most valuable. The top prediction; the recently launched .XXX TLD, followed by .Shop and .Music. Imagine the value that will be created in just the top-tier of gTLDs alone.
Domain Investors Live for the Land-rush
Secondly, I think it is an underestimation of the voracity of domain name investors and entrepreneurs. I can attest to the fact, after witnessing and participating in many land-rushes including the biggest of them all (.com), that high quality keywords will be vied for at auction and eventually purchased en masse during each individual public launch.
Fortunes can be made or lost in just a few days and where one man is choosy another will step in to take up a promising opportunity in keyword domains.
I also think that there could be wide-spread adoption by the general public once the word gets out, because people are craving options, but that could lead to an entire new article. More importantly, I want to know what you think.
Please contribute your opinion and see if we can collectively predict the impact new gTLDs will have on the domain name industry in 2014.
Thank you for voting! Feel free to continue the discussion in the comments below.