A fundamental and value rule of thumb in developing a new product or service is having an answer for the five w’s (who, what, when, where, why), or in Product Management lingo, what is the value proposition? Invariably, the stronger the value proposition the better the likelihood of success for a new product or service.

In the simplest of terms, if your product or service can’t be distilled down to a single sentence and have at least hundreds (or better yet a thousand) people say, “wow I would buy that”, then either the product has no basis in reality or the demand doesn’t justify the costs of development, procurement and distribution.

So what value propositions are strongest among the new gTLDs? So the winners are …. , well this article is not meant to crown a winner, but to critically ask some hard questions about new gTLDs.

Q1. How is the new gTLD different in value and possible usage than .com?

Frankly, most new TLDs come out whiffing on this first question. Many new TLDs are stating the reason for their TLD is that they provide an alternate namespace for .com. Wow! sign me up! This is like saying the reason to open a new gas station is to provide gas. TLDs by their very nature are namespaces, truly a red flag indicating a weak value proposition.

Additionally, some new gTLDs are stating it will be easy for companies to consolidate information related to the TLDs topic. So in essence the TLD is equal to a bookmark or a shortcut. Again, is this really their value to Internet?

Without having a clear and precise difference in usage for a new gTLD, the value to the end user will be negligible compared to having a proper .com website with good navigation and SEO.

Q2. Does a new gTLD really make the owner of the TLD certified or approved?

Have you ever been to a fast food restaurant and have the person in front of you order two burgers with cheese and an extra large size fries, then to ask for a large DIET soda? The diet soda doesn’t mean one is on a diet. In the same way, I really don’t think the public will eat the idea that a company having TLD X means they are of type X, basically they are selling empty stamps of approval that no one will respect.

Q3. Is the new gTLD trying to change the way, people and companies do business?

Though this is a noble idea, but the ambition is misplaced for most. Unless the scope of the change is small, a TLD is not the right vehicle for such change. If a sovereign government with billions of dollars and the power to legislate can’t get companies to change their ways then I don’t think there …. well how does that adage go …. something to do with a snowball in hell.

A recent and controversial topic among industry insiders is ICANN’s announcement that they will be opening up the market for new gTLDs (ICANN). On both sides of the coin there are pros and cons. The following is my unbiased view on this important issue:

Having managed and headed various large registrars over the past eight years, my answer to this question is an emphatic some “yes” and many “no”. I come to this conclusion based on two fundamental principles: First, I do not believe registrars have the will nor money to implement a flood of new TLDs. Second, the common buyer of domain names is already in a state of confusion with the handful of TLDs that exist today; therefore, it makes no sense to think that greater confusion will lead to greater market acceptance.

Principle 1: Registrar Business and Operational Fundamentals

From a pure business standpoint, the idea of more TLDs is a no-brainer. More TLDs = more products = more revenue = more profit. That is, assuming that registrars can quickly and cost-effectively integrate, automate, and fund TLD expansion. Hmmmm…can we really assume registrars can integrate, automate, and fund TLD expansion quickly and cost-effectively?

How about, more products = more development = more support = much more costs. My experience points to the fact that registrars require a lot of resources and time to implement and support new TLDs. So what would happen if thirty new TLDs were launched in one year? I am convinced that not too many registrars will be able to keep up the pace. As a result, registrars will end up picking and choosing some to implement and forgo many, depending on which TLDs they believe can produce the highest return on investment. From a business operations perspective, not more than a handful of TLDs releases, in any given year, is feasible.

Principle 2: Domain Buyer Knowledge, Sophistication, and Desire

After hearing, “we have only scratched the surface of the Internet”, repeatedly at conference after conference, I am convinced that the statement is true. If we take this phrase apart a little further, what does it mean? The masses are still just beginning to understand the Internet and its uses. Outside of domain industry circles, how often do you come across people who still don’t know what a domain is or what it is used for? Even the basics that we take for granted like SMTP, IMAP, POP, HTML, and DNS are often a foreign language to most. The idea here is that as users slowly understand and educate themselves, they will in turn participate further in this wonderful thing called the Internet. They may even, possibly, buy a domain name! The key word here is “slowly”!

To further support my point on the word “slowly”, or, to make it simple, take a look at some interesting moves in the hosting industry: Many are going back to basics, offering very simple products that allow users to create websites in three simple steps. Blogging for example has exploded because creating and maintaining a blog is relatively easy. What is the lesson here? The mass market wants simple and they move much slower than how we want them to move.

With the number of possible new TLDs being tossed around in the 20 – 400 range, can the average Internet user really understand and desire such a roll out of new TLDs? Introducing too many TLDs at once or in a short time frame will only confuse the market. Moreover, given the state of the economy, users with set budgets will be picky and are likely to spend their hard-earned dollars on the handful of domains they think will provide the best ROI. I personally prefer and believe a gradual introduction of new TLDs to the market provides the needed time to educate users, thus allowing for a strong end-user desire to hatch.

Survey

To investigate my points further, I would be extremely interested in doing a general survey of target users. Honestly, I think many in our industry (especially ICANN) would be intrigued to hear the answers to these simple set of questions:

a. What is a Top-Level-Domain and which ones do you know?

b. Did you know that other gTLDs exist besides com, net, org, biz, info, name, asia, mobi, and pro? If yes, name a few?

c. Have you heard any mention of the following TLD extensions before?

.aero – [Yes] [No]

.museum – [Yes] [No]

.coop – [Yes] [No]

.travel – [Yes] [No]

.jobs – [Yes] [No]

d. Do you know if these TLDs exist? (i.e., TLDs that are not yet applied)

.family – [Yes] [No]

.usa – [Yes] [No]

.blog – [Yes] [No]

.shop – [Yes] [No]

Stay tuned for more information to follow.

With the volume and variety of TLDs (Top-Level Domains) available to individuals or companies today, I am convinced that most registrants are overwhelmed by selecting the right set of TLDs that they need. “Which TLD is right for me?” is a simple question, but it is a hard question to answer properly.

Just doing a quick review of gTLDs (generic Top-Level Domains) overseen by ICANN (Internet Corporation for Assigned Names and Numbers), ccTLDs (country-code Top-Level Domains), and hybrid ccTLDs marketing themselves as gTLDs, it’s clear to see where people can get confused. The first step in answering the question, “Which TLD is right for me?”, must begin with understanding the intended purpose and scope of each TLD. I am providing a quick summary of the most important TLDs to get readers of the blog off on the right footing:

gTLDS:
.asia – “From ASIA – for ASIA”. Introduced in 2007.
.biz – For businesses. Introduced in 2001.
.com – For everyone, though intended for commercial registrants. Introduced in 1985.
.info – For everyone and as a general purpose TLD. Introduced in 2001.
.mobi – For Mobile content on phones and PDAs. Introduced in 2005.
.name – For individuals and personal information. Introduced in 2001.
.net – For everyone, though intended for network providers. Introduced in 1985.
.org – For everyone, though intended for organizations and not-for-profits. Introduced in 1985

Source: http://www.icann.org/en/registries/listing.html

ccTLDs: Two-letter Top-Level Domains designated for a particular country or autonomous territory to facilitate communication and service within the intended community.

.DE – Deutschland (Germany, managed by DENIC e.G.)
.UK – United Kingdom (managed by Nominet)
.BE – Belgium (managed by DNS .BE)
.CN – China (managed by CNNIC)
.CA – Canada (managed by CIRA)
.US – United States of America (managed by NeuStar)
The entire list can be viewed under IANA.

ccTLDs being marketed differently than as a regular ccTLD:

.WS (ccTLD of Western Samoa) is currently being marketed as an extension for a WebSite.
.TV (ccTLD of Tuvalu) is being marketed for online and television media.
.ME (ccTLD of Montenegro) is being marketed as a personal domain for individuals including call-to-action domains such as lookat.me, chatwith.me, buy.me, sell.me, etc.

Now that we all understand the intended purpose for each TLD, the next step in building the right domain portfolio is asking yourself the standard WHO, WHAT and WHEN:

WHO do you want to reach? WHO is your target group?
A. Local users only – a ccTLD would obviously be your first choice unless you live in the United States where .com is generally still more popular than a .US.
B. Local users mainly and lightly servicing your global region (North America, Asia, Europe) – a ccTLD plus .com (possibly .net and .info also) with strong consideration for .asia or .eu if you are servicing those areas.
C. International users – a ccTLD and a set of gTLDs to protect your brand (.com, .net, .info and .org) plus, possibly, .biz, .asia, and .eu for extra brand defense.
D. Friends and family only – .info or .me or both are good choices.

WHAT is the purpose of the domain?
A. Personal Use – .info or .me are best for pictures of family, friends, weddings, newborns, or communicating with close relations.
B. Blogging – .info and .com are best suited for sharing your thoughts or to stimulate online discussions.
C. Commercial – follow the instructions for WHO mentioned above.
D. Domain Speculation and Traffic Monetization – any TLD, especially new TLDs like .me or the upcoming .tel. The king of all domains, however, is still .com. As .com’s name space is being exhausted, good domains become harder to find as well as increase in value.

WHEN is it best to register the domains you want?
It is best to register all the TLDs recommended above today for one year and let the traffic dictate which ones you drop or renew. With the growing number of domain opportunists and new businesses being created, the cost of purchasing or recovering a lost domain is extremely costly and time consuming, if not impossible at times.