Examininng Value in New ICANN TLDs on Search and Navigation, Companies, Domain Registries

By Alex Tajirian
Alex Tajirian

I outline the implications for value presented by ICANN's proposed introduction of new Top-Level Domains (TLDs) on user search and navigation, companies, and registries.

Value creation for a stakeholder is the result of the introduction of useful new tools. Value destruction occurs when new tools makes stakeholders worse off. This is in contrast to the transfer of money between two parties in a transaction that involves existing assets. Value transfers include selling counterfeit products and siphoning traffic away from the legitimate brand owner.

Sources of Value

1. Online Search and Navigation: For the new tools to be value adding they should facilitate navigation, reduce search cost, or provide actionable branding information through marketing. Unfortunately, the new TLDs bring in a mixed bag of value-adding and -destroying tools.

2. Companies should register second-level domain names when the value of the resulting profits (i.e., revenue minus cost) is positive, with value taking into account the associated risk. They too get a mixed bag of value creation and destruction.

3. Registries can be independent entities or companies. To a registry, the value of acquiring a new TLD is driven by the demand for second-level registrations. Registries benefit from

Concluding Remarks

The net effect on value depends on the TLD and the stakeholder groups. Thus, case-by-case analysis is needed.

By Alex Tajirian, CEO at DomainMart

Related topics: Domain Names, ICANN, Internet Governance, Registry Services, New TLDs, Web

Comments

Search and Navigation Jothan Frakes  –  Aug 14, 2009 2:13 PM PDT

Impact on search and navigation section seems a bit negatively skewed.  Is that intentionally done?

I've spoken with a number of people of varying ages, backgrounds, and levels of internet experience about how they find what they need when they sit down at a web browser.

Most all of them (95%) go to a search engine first now today and type in their search string.  ALL (100%) of those that performed the keyword search then immediately look at the URL or DOMAIN NAME as part of their decision on which to click on.

Search for this on Google: 
"Washington Monument" Most top listings are .GOV
"Department of Commerce" Most top listings are .GOV
"Stanford University" Most top listings are .EDU

The TLD and domain name hold a massive amount of context and relevance to the subject matter being searched, and this has a tremendous impact on trust and the psychology of what gets clicked on.

This is all too frequently overlooked as part of the benefit that exists to having new top level domain names.

Impact on search and navigation section seems Alex Tajirian  –  Aug 18, 2009 9:46 AM PDT

Impact on search and navigation section seems a bit negatively skewed.  Is that intentionally done?

I intended it to be neutral.

However, your comment got me thinking about the use of “adding .com at the end of a keyword” in direct navigation. Obviously, it can be a ccTLD or “.edu” at the end. Using the expression “adding .com at the end” may suggest that “.com” has become generic in the sense of Kleenex for tissues and Xerox for copying. Does this make any sense to you?

"Stanford University" Most top listings are .EDU

Should universities use a new TLD such as “.Harvard”? For example, when you search for “hbr Harvard” (hbr stands for Harvard Business Review), the first result is http://hbr.harvardbusiness.org/, which is counter to your point and to my signaling model. Or does that mean that Harvard has done a lousy job with URL branding? So, under a new TLD it would be “hbr.Harvard,” a better signal and shorter. On the other hand, MIT sends the correct signal when you search for “SMR MIT” (Sloan Management Review).  Obviously, such a new TLD would not be appropriate for less known universities.

The TLD and domain name hold a massive amount of context and relevance to the subject matter being searched, and this has a tremendous impact on trust and the psychology of what gets clicked on.

This is all too frequently overlooked as part of the benefit that exists to having new top level domain names.

This comment supports my signaling model.

The Actual Proposals Master Melab  –  Aug 17, 2009 12:18 PM PDT

Does anyone know where on ICANN or anywhere else I can find the list of the new tld applications?
Thank you ahead.