imagesThere is an interesting article by Mr. Alex Tajirian at which posits that people should not be so quick to (i) predict the economic value a new gTLD based on the supposed value of the name as a common or recognized term; or (ii) gauge the “success” of  a new gTLD simply by looking at the number of registrations.

There are a number of very insightful links in the article to outside posts which discuss competitive principles and how, for example, smaller companies are able to gain an advantage over their larger counterparts and eventually overtake them, as well as how big companies can stay on top by adopting a “small” company persona and fostering competition to give consumers alternatives.

In terms of evaluating how a new gTLD might succeed and eventually compete with the “800 lb. .com gorilla”, I am not sure it makes sense to look at a gTLD as analogous to a small start-up company – and thereby that the above noted competitive principles apply to the TLD model.  A new gTLD is really a hybrid entity whose value would seem to be determined on the one hand by traditional business principles (i.e., innovation, customer service, branding, marketing, etc…), and on the other hand its location or name.  Internet businesses, users, and domainers will go to the new gTLDs and use them if only for the fact that they can get better and more recognized real estate in these new territories.  So, even if these new gTLD’s do nothing, there are going to be users out there who will register new domains in that space simply to get in early on the most recognizable real estate in the new registries.

A non-internet historical equivalent to this might be when Congress passed the Homestead Act of 1862 which opened up for settlement a huge swath of land west of the Mississippi River. This may seem far fetched, but thousands of people moved West with the hopes of finding new lands to settle and farm.  Although many took advantage of the Act, there was not a permanent exodus from coastal cities, just a general redistribution of the population over a larger swath of land.  Here, the same thing is likely to occur.  There will be users who flock to the new gTLDs because the same equivalent real estate in existing registries is already taken, but this is not likely to cause an exodus from the .com registry.  For some, the new registries will fulfill the promise of a better (more recognizable) life/location on the internet – but for many others they are likely to stay put and slowly dip their toe into this new world.

In any event, I definitely agree that simply looking at the number of registrations in a gTLD will not be indicative of the success or value of a registry like the new .xxx registry has seen a large volume of registrations in just a few weeks, but many appear to have been made for defensive purposes – which does not bode well for the long-term health of the registry or its supposed place as a unique identifier for the adult entertainment field.  Further, having more competitors to the .com behemoth is surely not a bad thing (whether it was necessary to create 1000+ new TLDs is debatable) but there is no denying that the next generation of internet users will likely be more comfortable with the idea of using different extensions to locate things on the internet and that everyone will have to adapt to a much larger new world on the internet.