Domain Name News: “The most valuable new gTLDs according to Sedo” plus 1 more

The most valuable new gTLDs according to Sedo

Posted: 18 Jun 2012 08:01 AM PDT

Sedo's published a quantitative analysis today on which new gTLD applications may be most successful, worth the investment and in demand by end users. According to statistical analysis by Sedo, the top 10 most valuable domains being sought are:

1	SHOP
2	WEB
3	SITE
4	MUSIC
5	HOTEL
6	ONE
7	BLOG
8	ECO
9	SPORT
10	LOVE

The analysis was calculated by economist, researcher and domain pricing expert, Thies Lindenthal. In addition to serving as Product Manager for Domain Pricing Strategies at Sedo, Lindenthal is also the creator of IDNX, a domain price index.

"Many factors make domains unique and difficult to compare side by side, but analyzing hundreds of thousands of domain transactions on Sedo's marketplace – and applying real estate pricing methodologies – has provided significant insight into the factors that determine domain value," said Lindenthal. "New gTLDs are actually not that new, they're really just traditional domain names on steroids. We should evaluate their fundamental strengths in a similar way to how we traditionally price domain names."

Cost Versus Value

Considering the substantial cost associated with applying for and managing a new TLD, this research can help companies justify their potential investment by identifying extensions with the best chance of success. The cost involved in the new TLD process includes an $185,000 application fee, on top of a $25,000 annual fee and any operational costs that will be assumed by whoever is awarded the registry. In addition, gTLDs that have multiple organizations applying for them could go to auction, driving the cost up even more.

In addition to providing insight for companies competing to manage new TLDs, this ranking also gives end users a better idea of the domains in which they should invest their time and marketing budgets once the new extensions are launched.

Research Methodology

The ranking to predict new gTLD effectiveness is derived from a formula of five criteria that typically affect a domain's value. Those criteria are:

Number of applicants for the new gTLD
Number of Google searches for keywords or terms within the new gTLD
Expected Cost-per-Click of online advertisements that include the gTLD as a keyword
Number of registered .COM domains that include the gTLD at the end of the keyword (e.g. MyShop.com as compared with My.Shop)
Number of pre-registrations per gTLD according to UnitedDomains.com

The first indication of which factor matters the most comes simply from counting the number of applications for each gTLD. If there are a lot of investors trying to secure a particular keyword, it's a strong indication that the word will be a valuable top level domain. For example, thirteen applicants paid at least $185,000 trying to win .APP, indicating a high valuation.

For others extensions, competition is not as strong. Only Google and Microsoft stepped into the ring to acquire .DOCS, for example. The fact that most companies expected these heavyweights to vie for this TLD will have deterred their own application, suggesting that an exclusive look at total applications will be a misleading factor. However, statistical analysis overcomes this difficulty.

Exploratory research helped derive weights for each of the five factors by means of a regression analysis. Technically, the number of applicants per domain is explained by the TLDs' scores along the other four dimensions. Using these weights, each new gTLD was ranked according to its fundamental strength. Using these estimates and the data collected in each category, a ranking of the intrinsic quality of each new extension is created.

For an additional breakdown explaining how the ranking was derived, including a Top 10 list for each of the five criteria used, see the full study (PDF)

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Microsoft reveals their new gTLD strategy

Posted: 16 Jun 2012 08:03 AM PDT

In the official Microsoft blog, Craig Mundie, Chief Research and Strategy Office at Microsoft, writes more about the company’s goals and movitation when participating in ICANN’s new gTLD application round.

Microsoft applied for 11 new gTLDs “most of which correspond to [Microsoft's] existing trademarked products, services and brands“:

.microsoft,
.windows,
.xbox,
.office,
.docs,
.bing,
.skype,
.live,
.skydrive,
.hotmail
.azure.

Mundie goes on to say: Our goal for our new TLDs is to promote responsible utilization of the Web and ultimately better experiences for consumers. Although we're not yet talking about specific plans for the TLDs for which we've applied, we believe that – properly used – this expansion of domains can help deliver new services and capabilities to consumers and the Internet community as a whole. Appropriately utilized, the new TLDs can also protect the rights of trademark holders and brand owners, while promoting a safer and more secure computing experience.

As for the applications submitted by others, such as by Google for .search, Mundie writes that Microsoft is “just now reviewing all of the applications by other companies and organizations. We will work closely with ICANN and others to ensure competition and innovation are preserved for the industry, while also helping protect the rights and expectations of other stakeholders.“