CAMBRIDGE, Mass.–()–The largest Internet domain name marketplace and monetization provider, Sedo,
today announced results of a study that analyzes the potential value of
new generic Top Level Domains (gTLDs).
“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.”
On June 13, 2012, the Internet Corporation for Assigned Names and
Numbers (ICANN) revealed
a list of nearly 2,000 applications it had received from
organizations seeking to manage new domain extensions that will join
.com, .net, .org and 18 other suffixes that currently exist. According
to a 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,
the first scientific-grade 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 preregistrations 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, visit http://bit.ly/M0FpGy.
About Sedo
Sedo, an acronym for “Search Engine for Domain Offers,” is the leading
domain marketplace and monetization provider. Headquartered in Cologne,
Germany and with offices in London, England and Cambridge, Mass., Sedo
has assembled the world’s largest database of domain names for sale,
with more than 15 million listings. The success of Sedo’s model has
attracted a global base of more than 1 million members.
Article source: http://eon.businesswire.com/news/eon/20120618005940/en/gTLD/domain-name/Sedo. Creative Commons (CC)
