Lessons from an Unlikely Place

FairWinds Partners —  November 15, 2012

We largely focus on brand owners here on the gTLD Strategy blog – how brand owners will be affected by new gTLDs, how those brand owners that applied for new gTLDs can effectively integrate them into their digital strategies, etc. But all told, strategic companies were only a portion of the total pool of new gTLD applicants. By FairWinds’ calculations, approximately one-third of all new gTLDs applied for were brand names. When you strip out the duplicates, brand names make up about half of the total group of potential future gTLD strings.

The other half of applied-for gTLDs are generic terms and geographic terms, both in English and other Latin script-based languages as well as languages that use non-Latin alphabets like Cyrillic, Arabic, or Japanese. And while applicants’ motivations for applying for new gTLDs were diverse and varied, we have to remember that for many, applying for a new gTLD was the first step in a new business venture built around selling domain name registrations.

This week’s Daily Beast article about the financial success of .XXX highlights this point well. With just short of 230,000 domain names sold within a year – some through traditional registration and other, high-value domains sold through auction – ICM Registry, the company that operates .XXX, is on track to make nearly $200 million this year.

It’s success stories like these that have undoubtedly driven many new gTLD applicants to apply for their own little slice of Internet real estate. Of course, .XXX is not the only gTLD to have launched since ICANN first opened up the space in 2000. And for all the financial success of .XXX, there are other gTLDs that have languished, or never really took off in the first place.

So what was the secret to .XXX’s success, at least compared to other recently launched new gTLDs? A large part has to do with its focus – not because it focuses on adult content specifically, but because it has a clearly delineated focus. The public understands what .XXX is for, what kind of content they’re likely to find there, and what kind of message it would convey if they were to register a .XXX domain name and use and promote that domain name. Other new gTLDs launched in the past have suffered from that lack of clarity. By remaining completely open and undefined, they attempted to compete with what most people recognize as the “default” gTLD, .COM – and they failed.

This actually bodes well for new gTLD applicants. The message is pretty clear: if you have a clear strategy for how your gTLD will be used and can clearly communicate that strategy to Internet users, they will be more comfortable with and quicker to adopt your gTLD. This doesn’t just apply to gTLD applicants who plan to sell domains, either. For brand owners who are seeking to engage with their customers through their gTLD, these lessons apply equally.