Brave New World – the Internet after the new gTLD launch

What will happen to the value of dot-com domains when most online traffic no longer goes to dot-com domains?

Currently dot-com dominates with a likely 95%+ share of US traffic.

23 of the top 25 sites in the US are on dot-com domains according to Alexa.  All the top 25 sites are accessible via a dot-com domain, as Wikipedia.org and CraigsList.org, the two non-.com sites in the top 25, use the dot-com versions of their domains to redirect to the dot-org site.

92 of the top 100 destination sites in the US use dot-com domains.  The other non dot-com sites are comcast.net, wordpress.org, bbc.co.uk, thepiratebay.org, mozilla.org and dailymail.co.uk.  The only one which is not accessible from the dot-com version of its domain is the dailymail.co.uk, near the very bottom of the list, as dailymail.com belongs to the Charlotte Daily Mail.

One of the key reasons for dot-com’s dominance, and for why dot-com domains are worth more than other extensions, is because most online users in the US interact almost exclusively with dot-com sites.  The dot-com extension becomes synonymous with the Internet for most US consumers.

Now imagine a world where most of the top Internet sites have registered their own brand as a new gTLD.   Apple will have .Apple.  eBay will have .eBay.   Amazon will have .Amazon.  Google will have .Google.  CNN will have .CNN.  HBO will have .HBO.  Dell will have .Dell.  Ford will have .Ford.  CitiBank will have .citi.  The Gap with have .gap.  And so on for all the large consumer brands.

In this world, most consumer interaction with the Internet will be through .brand extension domains.  Most advertising dollars will be spent to promote websites with .brand domains.

.Com will not be nearly as dominant.  Consumers will no longer expect that most web sites they visit will end in .com, nor will they assume that most business web sites will have a .com extension.

We don’t know if this is the future.  We don’t know how many top sites will switch to a .brand domain.  But if this is the future, what will this mean for the value of dot-com domains?

My best guess is that even though dot-com domains will no longer be as dominant, they will still keep their value and continue to be the premier domain extension.

Even in the post gTLD launch world, the percentage of businesses that would shift their primary website from .com to .brand will be very small – probably a fraction of 1%  -since only the largest consumer companies are likely to make this shift.  Consumers may quickly learn the 50 or hundred top sites that have switched to a .brand extension, and of course their .com domains will continue to operate, if only as redirects to the .brand site.  Even if the large brands do adopt .brand extensions, the rest of the consumers experience of the Internet is unlikely to change.  All the other online businesses that a person visits, especially the local ones and the smaller national ones, will keep their .com domains.  The local restaurant, dentist, plumber and so on, will still be found at their current domain which in most cases is going to be a .com domain. So consumers may readily adapt to the world where top consumer brands have their own .brand extension but the rest of the  Internet continues on as before with .com as the dominant extension.

If you have a .com domain today that has an end-user value of $10,000 or $20,000, what will happen to that value 5 years from now if most of the traffic on the web shifts to .brand websites?  Will that affect the value of your .com domain?  My guess is probably not. Until the end user pricing reaches the hundreds of thousands of dollars, obtaining a .brand extension as an alternative to acquiring the.com domain is not cost effective. And as Rick Schwartz points out, it is likely going to be a big mistake to pay hundreds of thousands of dollars to launch a .brand extension without owning the corresponding .com domain.  The demand for dot-com should continue to be as strong as ever, and will likely rise as the Internet becomes increasingly important.

Joe Alagna, in his comment on Domain Name Wire, put it very well:

.Com is not going anywhere and will be the most important domain name leader for years to come.

However, the fact that the largest advertisers will go to their own TLD will advertise that instead of their .com domain have an effect.

.Com is what it is because of the aggregate power of the big company ad dollars spent over the past 15 years. That will be reduced now because big ad dollar companies will concentrate that money on their own TLDs instead of .com.

However, there is an entire tier of smaller companies who still advertise, but who won’t be getting their own TLDs. And the biggest of those smaller companies will most likely still use .com as their TLD.

So .Com isn’t going anywhere in the near term, and the value of .com domains will remain strong, but it’s importance will be slowly diminished over time and as a new generation of Internet users arises.

What do you think?