In the next two years we are going to see a massive proliferation of new top level domain extensions (nTLDs). Some of my favorites: .ninja, .nyc, .tech, .design, .app, and .web. Soon there will be well over 1000 domain options coming online.
This begs the question: How will .CO fare in this new environment?
While it may sound counter-intuitive, we’ve been HUGE advocates of the nTLD process from the very start. But why would a relatively new TLD like .CO actually want even more competition? After all, isn’t competing with the likes of .com and other legacy domain extensions quite enough to deal with?
Increased awareness of alternative domains.
The reason is not some deep story about how we think nTLDs will change the world for the greater good of mankind — although that would certainly be nice. The reason is entirely self-serving. Simply put, we think nTLDs will drastically change the game with respect to consumer awareness and acceptance of “alternative” domain extensions.
In the world of domains, an “alternative” extension is essentially anything other than .com. Launched nearly thirty years ago, “.com” has become virtually synonymous with Internet. As a result, there is a massive delta between the number of .com registrations — and the number of registrations for alternative domain names. Together, .CO and all of our industry peers generate approximately 30% of new .com registrations on a monthly basis. That’s a huge gap!
You can argue that the alternatives out there – including .CO – have done a half-assed job of shaking things up – and disrupting the status quo. That’s fair enough – and I’ll accept my share of the blame on that front. But it certainly doesn’t tell the whole story.
The fact is that ICANN (the Internet Corporation for Assigned Names and Numbers) was slow, to say the least, in introducing alternative domains in the past. You can’t break up a monopoly like .com by merely introducing a few other alternatives (like .travel, .pro, .biz, .info and .mobi). And you certainly can’t require those alternatives to play by the same set of rules as the big established monopoly. They won’t stand a chance. What you need is massive deregulation — and massive competition.
ICANN’s nTLD process goes a long way in the right direction. The fact that we now have Internet behemoths like Google and Amazon, among others introducing hundreds of new domain alternatives is a start. It would have been nice to see real vertical integration (much needed for product innovation) and full flexibility around pricing schemes and operations – but at least we’ve got varying business models and brand TLDs that can operate closed TLDs.
All tides will rise.
Slowly but surely, websites will start to be built in these new domain extensions, much like innovators and entrepreneurs who are currently building on .CO.
- Large brands will begin to advertise their own TLDs in the SuperBowl and other major media (like 7series.bmw or coffee.starbucks);
- Local businesses will begin to use geographic nTLDs because they seek to have an affinity with their cities of origin (like joes.miami or bobsbagels.nyc);
- Bloggers will start building their blogs on niche TLDs simply because they like the great branding options (like cooking.ninja or latest.tech);
- Search engines will start to recognize content patterns from certain TLDs and weigh those favorably in the search rankings;
- Registrars will fine-tune their search algorithms to highlight the TLDs that are most suitable for certain customers or most responsive to the nature of their queries.
And so on and so forth…
The result of all these moving parts will be a slow but powerful progression in consumer awareness for anything to the right of the dot. As a result of these forces, the predisposition of website owners to build on .com domains will erode. That 30% of new .com registrations for the alternative domains will soon increase to 35% and then to 40%, and so on.
Interestingly, I do think the quality of the .com namespace stands to benefit from the nTLD process in the short term. With the specter of nTLDs looming, there has been a massive re-pricing effect in the secondary domain market. Large portfolio owners are quietly dumping their assets into the open market; and quality domain names that used to be warehoused are now becoming available for sensible prices. Real websites will likely get built on those domain names — decelerating the speed at which nTLDs will catch on. But that’s the short term.
In the medium and long term, alternative TLDs will chip away at the dominance of the of the 800 pound .com gorilla, much like 1000 wood peckers chipping away at a single tree trunk.
And .CO will rise with the tide.
In a world with no scarcity in the naming system, and where there is little predisposition to register a .com domain name – I am confident that .CO will flourish.
Why? Apart from having a rock star team – we have several other strategic (read: unfair) competitive advantages.
- .CO is a “proven, yet still new” TLD. While .CO is not technically a “nTLD,” I suspect many consumers will bundle it into the same bucket as the new ones. In that context, .CO has a clear first mover advantage. With a three year head start, it helps to have hundreds of thousands of real use cases to point to, and a flourishing global brand. If there’s one thing that is driving the growth of the .CO domain today, it’s the community of innovators and entrepreneurs who are building the future on .CO, like AngelList, 500 Startups, Brit.co, Om, GEW, Up.co, Vine, etc.
- Unlike most nTLDs which have a niche, brand, or community focus, .CO is meaningful to a VERY wide audience. It’s the acronym for “company”. The letters “CO” have been used in that context since the beginning of commerce. Not only in the English speaking world, but also in Spanish and French. Even in China, you may have noticed that most every company name in Latin characters ends with a “CO”. Wide appeal translates into higher rankings and higher conversions in the purchase path of any given registrar. And that equates to premium placement.
- As a ccTLD, .CO can turn on a dime. Unburdened by the strict regulatory framework of ICANN, we can quickly adapt to the changing competitive landscape. Not only can we implement creative pricing strategies that our competitors cannot, we can also offer value beyond the domain name and innovative product integrations with registrars and resellers.
- And let’s not forget the fact that .CO is short. In an age of mobile and social media, where every character counts, there is no question that shorter is better.
Together, these factors represent a powerful competitive advantage that will be hard for any other TLD to compete against. They may seem like nuances to some, but in a world of real competition, it’s the nuances that count – unfair or not.
All this said, I do think the terrain is going to get bumpy in the next few years. The introduction of nTLDs will be confusing to consumers, there will be some failures, and registrars and resellers will understandably be overwhelmed by the daunting task of implementing 1000s new domain options.
But the dust surely will settle. Consumer awareness surely will rise. And the adoption of alternative TLDs surely will grow.
And while I’m not a betting man, my bet is that .CO will grow disproportionately faster than any of its existing and new peers.
– Juan Diego Calle
 .CO industry peers includes most large scale gTLDs and several multipurpose ccTLDs.