(Editor’s Note: this is a guest post by Shane Cultra, author of the popular domain investment blog DomainShane. I was interested in hearing new perspectives on new top-level domains, and Shane was good enough to provide his thoughts.)
It was inevitable. The growth of the internet and the ever increasing number of people using the web, was going to cause a shortage in domain names.
As the big three – .com, .net, and .org – reached the point that available domains were merely comprised of unpronounceable and hard-to-spell leftovers, internet users began looking for more.
Countries began to market their own ccTLDs as generics, trying to appeal to both local and international users alike. Domain name registries saw the dollar signs and began clamoring to introduce alternatives.
So now that they’re on their way, how will new TLDs affect the value of your domains? Will .web, .car, .love and all the other endless possible TLD options impact the value of your portfolio?
My answer to this question is simple: yes.
There is no doubt all the new TLDs will impact your portfolio’s value. If you own anything other than .com, I think the value of your domains will fall. I feel that .net and .org will fall the least.
The real answer comes down to how the search engines rank the new TLDs. The TLDs that hold the most value will be able to compete in both the US and the international search market.
If Google treats them well, then they will be in the upper tier. The problem is the more TLDs that Google ranks, the more choices a domain owner will have.
As we know, the more choices the lesser the value and chance of a sale. If there are only three shoes on the shelf from which to choose it bodes better for the seller than a shelf with 100 shoes.
In my opinion, the real money being made is by the companies selling these new TLDs. The new releases will leave the domain investing community and domain buyers in general “holding the bag”.
The .travel and .mobi TLDs showed early what will happen as people shy away from a TLD after a short period of time. Speculators were left with worthless domains.
In order for a new TLD to work it takes massive adoption. The local geographic community, the domain investing community, business, and the general public must be a part for it to succeed.
The new .co TLD has come as close as any in the last five years to getting over this hump; .tv, and .me, have also found their place.
A profitable endeavor for the companies managing the release , but only profitable for a handful of people that hold the best of the names.
So back to the original question, will this hurt the value of my portfolio? My second response to my “yes” answer is I think it will increase the value of your .coms.
Dot-com domains are king and will always be the king. They are scarce , wanted and all those that hold the same keyword in alternative TLDs wish they held the .com. Those that tell you different are either naïve or lying.
Domains are often compared to real estate and .com to beachfront property, and I think it’s a good analogy. Beachfront has continued to be considered the most-wanted and highest-priced real estate.
I would throw in big city real estate in this comparison too. You can still buy homes and land outside the cities and away from the beach. Homes just as nice or nicer. Areas of land that are twice as big but still don’t have the value of the beach and city.
When people think of the internet they immediately think .com. When they think of high priced real estate they think of the beach and city. Along with beach and city property, I believe people will always perceive the .com as the highest value.
This is how I am approaching my investment in newer TLDs. I am treading lightly. I continue to invest heavily in .com with a 10% investment in other TLDs. That 10% is invested in super high-quality keywords.
I have no plans to invest in lesser domains, as I think the only possible way to make a profit on my investment is development and I don’t feel comfortable developing domains outside of my field or keywords from random categories.
When I buy outside of .com, I tend to buy in my niche (the names of plants) as they are in my “comfort zone”. For example, I purchased hosta.me because hosta.com is taken and would cost me a ton of money.
I have all the photos and information to develop a site and with hosta being a very collectable plant I thought hosta.me would work. I also can target US Internet users using my webmaster tools – the audience I am trying to reach.
That same domain was a hand-register which tells me that although that has value to me, I would have very little chance of reselling that domain. In short, a bad investment for a flip. In my opinion, this will be the case with 98% percent of all the new TLDs so be very dot-careful.