Home / Blogs

Do New gTLDs Disrupt .com?

Don't miss a thing – sign up for CircleID Weekly Wrap newsletter delivered to your inbox once a week.
Alex Tajirian

This post examines whether the new gTLDs program is a disruptive innovation to the dominance of .com. I then use the idea of disruptive innovation to explain the relative adoption failure of previous generic Top-Level Domains (gTLDs), such as .biz, .info and .mobi.

Harvard Professor Clayton Christensen's theory of disruption explains battles between market entrants and incumbents. Examples of markets transformed by disruptive innovations include classified ads (Craigslist), long-distance calls (Skype), record stores (iTunes), research libraries (Google), encyclopedias (Wikipedia), and taxis (Uber).

To answer the question, the model is driven by two fundamental questions: First, does the new product either offer lower performance at a lower price or create a new market by targeting customers who couldn't use or afford the existing product? Second, is the incumbent motivated and able to fight it?

The choice between buying a new gTLD or a .com domain goes beyond either-or. First, is the name for branding or other use? Second, consider whether the .com is registered by an ongoing business, is not registered, or is available for sale. We emerge with the six mutually exclusive scenarios in the table below.

New gTLDs Disruption Scenarios
gTLD Role.com StatusScenarioDisruptive?
Not Registered2No
Available for Sale3Yes
No BrandingRegistered4Yes
Not Registered5No
Available for Sale6Yes

I analyze the decision of a business to opt for a .com or a new gTLD under the six scenarios.

Scenario 1 (Branding, .com Registered): Not disruptive

These are typically brand names, some them trademarked. New gTLDs don't affect an established and globally recognized .com brand. Owners of big league domain names rarely brave the costs and risks of rebranding to take on a fledgling name. Hence, acquiring branded .com domain names by a new entity is prohibitively expensive, and thus new gTLDs are unlikely to disrupt them.

Scenario 2 (Branding, .com Not Registered): Not Disruptive

Such a .com can be registered at a lower price than a number of the new gTLDs. Moreover, there is as yet no clear SEO advantage for new gTLDs. Even if studies show more favorable rankings for new gTLDs, that does not translate into higher chances of clicking when customers are unsure of the novel gTLD in the link. There are a number of recent examples of start-ups creating new brand names under .com. Examples include Eargo (hearables), Polyvore (a fashion start-up recently acquired by Yahoo), Beme (video-sharing app), Terrafugia (building a flying car), and Monkey Learn (a machine learning service that gathers data, like sentiment, from text). Also, with constantly new technologies, it is doubtful that gTLDs with relevant keywords reflecting such technologies will be launched anytime soon or would even be economically viable (wearables, hearables, flying cars, AI).

Scenario 3 (Branding, .com Listed for Sale): Disruptive

Secondary market prices for .com domains are high, with prices in the hundreds of multiples of their registration prices. Moreover, the secondary market is mostly for generic domain names, rather than creative brands such as the examples noted under Scenario 2. For a few start-ups with too much money to burn, such domain names may provide an expensive alternative to new gTLDs and unregistered novel names. But they must look out for potential trademark violations in this category.

Scenario 4 (Not Branding, .com Registered): Disruptive

A large number of these names are used for parking or generic SEO-motivated doorways and can be bought at the right price, which can be substantial. Compared with .com, new gTLDs offer lower-quality signaling but more precise targeted marketing, and at considerably lower prices. This last is especially true of non-premium new gTLDs names.

Scenario 5 (Not Branding, .com Not Registered): Not disruptive

New gTLDs' registration prices may not be cheaper (especially premium names) than the .com and more targeted marketing. However, for non-premium names, businesses may choose to acquire both to take advantage of .com branding combined with targeted marketing.

Scenario 6 (Not Branding, .com Available for Sale): Disruptive

The disruption occurs even though the .com secondary market is deeper and, on average, more expensive than new gTLDs. Moreover, new gTLDs have labeling and other advantages. Combined with the above study indicating that Google will treat new gTLDs on equal footing with .com, this indicates that new gTLDs can be a viable alternative.

The objective and strategy of previous expansions of gTLDs were to compete with .com, instead of complementing them for product label signaling. Moreover, the previous gTLDs had at best a diffused label-signaling message. Their role was as a .com alternative that would provide a cheaper and lower-quality branding message, while ignoring the potential market for labeling domains. Thus, previous expansions were not in a position to disrupt.

By Alex Tajirian, CEO at DomainMart

Related topics: Top-Level Domains



The TLD Advantage John Laprise  –  Aug 25, 2015 11:29 AM PDT

The analysis is fine as far as it goes. It does not address the user side of the equation. .com is familiar to users while gTLDs are not. Unless a new gTLD gains consumer buy in, it simply becomes part of a long tail.

To post comments, please login or create an account.

Related Blogs

Related News

Explore Topics

Sponsored Topics

Promoted Posts

Now Is the Time for .eco

.eco launches globally at 16:00 UTC on April 25, 2017, when domains will be available on a first-come, first-serve basis. .eco is for businesses, non-profits and people committed to positive change for the planet. See list of registrars offering .eco more»

Boston Ivy Gets Competitive With Its TLDs, Offers Registrars New Wholesale Pricing

With a mission to make its top-level domains available to the broadest market possible, Boston Ivy has permanently reduced its registration, renewal and transfer prices for .Broker, .Forex, .Markets and .Trading. more»

Industry Updates – Sponsored Posts

5 Afilias Top Level Domains Now Licensed for Sale in China

Radix Announces Largest New gTLD Sale with Casino.Online

2016 Year in Review: The Trending Keywords in .COM and .NET Domain Registrations

Global Domain Name Registrations Reach 329.3 Million, 2.3 Million Growth in Last Quarter of 2016

A Look at How the New .SPACE TLD Has Performed Over the Past 2 Years

Neustar to be Acquired by Private Investment Group Led by Golden Gate Capital

Startup League Reports from WebSummit, Lisbon

.SPACE Becomes the Choice of the First Ever Space Nation Asgardia

Why .com is the Venture Capital Community's Power Player

The .cancerresearch TLD: Search for Cure Drives Digital Innovation

New TLD? Make Sure It's Secure

Radix Launches Startup League at TechCrunch

Celebrating One Year of .online

LogicBoxes Launches the New Elite Reseller Program

Afilias Acquires Premium TLDs .ARCHI, .BIO and .SKI

Radix Adds Dyn as a DNS Service Provider

Facilitating a Trusted Web Space for Financial Service Professionals

Ready or Not, 5 Big Tech Trends Headed Your Way

.STORE Grosses Over $1 Million Before the Close of Day 1

News.Markets: A Rising Star in the World of Financial Trading and New TLDs