Success Drivers of New gTLD Applications
Alex
Tajirian
January 16, 2011
Being approved by the Internet Corporation for
Assigned Names and Numbers (ICANN) as the owner of a new
generic top-level domain (TLD) extension
requires considerable analysis before the is submitted. You
must understand the sources of risk, gauge your risk tolerance,
and you must obtain an estimate of the value of your proposed
TLD’s future revenues (with the effects of potential competitors
factored in, a step too many applicants ignore).
Acceptance takes more than paying the application fee
or even hiring an expert to help you fill out the form. And
if ICANN says no, expect your application investment to vanish.
Do your homework and you won’t apply for unprofitable
TLDs. Lose and at least you will have done your best. The victor
will have overbid and/or they will have a better TLD value forecast
because of a superior forecasting methodology or a better vision
for the use of the TLD.
New gTLD revenue is driven by the size of the market for
the TLD, your market share of registrations, and the price you
charge for registrations under your gTLD. Revenue can be estimated
by using prediction markets and/or statistical
methods.
No matter what estimation method you use, the risks include
uncertainty about demand. Thus, depending on your risk tolerance
and budget, you might consider applying for multiple TLDs or
join an investment fund that pools together interested investors.
You should keep in mind that some of the new gTLDs can compete with .com and that you should
seriously consider differentiations by being socially responsible.
A list of proposed TLDs can be found at AboutDomains.
In conclusion, you must analyze gTLD revenue and the associated
risks before you apply for a new gTLD.