Major Bear Market Expected for Geo Domains

[namemarket]

Starting next year unlimited numbers of new domain extensions are scheduled to be sold and some will be up and running by then. We always assumed major brands such as .sears .apple .microsoft .hp .godaddy .ibm and many others would want to own their own extension, not necessarily to sell domains but for their own product, use and branding.

Now we am hearing many reports about large U.S. and international cities including the cities of .tokyo .sydney .newyork .sandiego .vegas and others planning to also buy their very domain extension. At an initial cost of $185k it may seem high to you or me but to a large corporation or big city it is not too significant a cost.

Having heard about many major cities with plans to buy their own extensions it would seem logical the end-effect will be to greatly devalue the domainer or investor owned geo dot com’s, including mid-size city dot-coms.

The smaller or mid-size cities may not want to invest now or be able to budget $185k but they will likely do so as the ICANN price drops (and I am sure the fee will decline rather quickly and dramatically within a few years).

At that time I believe you will also see many mid-size cities such as Palm Springs, Burbank and Scottsdale for example, getting their own extensions. It’s also possible they may not wait for lower costs and instead apply soon, agreeing to pay the 185k ICANN fee.

Think about this scenario; A visitor (or resident) in Scottsdale Arizona knows many cities now own their own domain so would he be more inclined to typein to a search box or the browser window “Scottsdale.com” or the word “Scottsdale” without an extension? In our opinion there is little doubt as time goes by the word Scottsdale will prevail as the most popular choice, relegating Scottsdale.com to 2nd tier status, which dot-com decline would be ongoing and the scottsdale.com down-trend be more pronounced as time goes by.

In our opinion, this news marks the beginning of a very significant and long term bear market (a likely permanent major drop in geo domain values), impacting mid to large city Geo domains in particular. We would expect a number of them to go on the auction block soon before the Geo's decline more in value.

 

[domainwb]

Will it be easy to make net users accustomed to these newer extensions ? It will be a very tough and long journey , may be impossible also.

The default for an average user is .com

I strongly believe .com remains always superior.

 

[namemarket]

And what do you put to the left of the dot ?

Which one is better ?
palmsprings.com
city.palmsprings
palmsprings.palmsprings
...

Good question. I believe the DNS can be setup so it would resolve without anything in front of the dot i.e. NYC could work stand alone.

---------- Post added at 06:08 AM ---------- Previous post was at 05:56 AM ----------

IMO, Geo domains have a lot more to "fear" from the rise of Local Search. For many queries with local "intent", Google Places/ Bing Local/Yahoo Local (the map, top listings from the map) pushes the organic listings down below the fold so that ranking in the top 5 organic because of a geo domain still doesn't do you a whole lot of good. Optimizing for local is the way to go, and you can do that VERY effectively without a geo domain. (Great for branding and relevance/click-through if you have one, but location kwd in domain is not a major ranking factor for Local).

Excellent point. I was speaking to a friend the other day (who sells products both locally and nationally) who was complaining how he once was in the top of page 1 but several Google Places local listings replaced him at the top and pushed him down to the lower half of page 1.

---------- Post added at 06:15 AM ---------- Previous post was at 06:08 AM ----------

I'm wondering how it's going to effect the Seo game - there's going to e so many exact match domains. Hopefully com and org and net hold there authority...

Important issue. Right now there are usually just a handful of exact match keyword domains for a search but that could change so there may be 100's of them (to the left of the dot) in the future (especially if new gtld costs drop a lot so domainers, small businesses or internet firms like Demand Media for example can register exact match keyword(s) extensions. But when I say 100s of matches am referring mostly to a broad match since by definition there can only be one exact match extention to the right of the dot (but many broad matches both right and left of the dot are possible).

 

[TheBaldOne]

David, you have not commented about .la? This suffix was heavily promoted as being the Los Angeles local suffix, yet it seems to have barely if at all made a dent into the market there, and LA with circa 10 million population (over 3%) represents the biggest 'city' market in the States.

 

[namemarket]

David, you have not commented about .la? This suffix was heavily promoted as being the Los Angeles local suffix, yet it seems to have barely if at all made a dent into the market there, and LA with circa 10 million population (over 3%) represents the biggest 'city' market in the States.

I think .la is not popular mostly because it's really a country code but the new extensions are gtld's.

 

[gazzip]

- Most towns/cities are looking everywhere to cut back on expenses - how would they possibly justify becoming a registrar?

True, most cities (in the west) are teetering on bankruptcy, with no money to expand so all they can do is cut back or keep borrowing)

Even if Helicopter Ben can raise the debt ceiling by $2.5 trillion (for the 11th time since 2001) firing up his trusty printing press would only allow the government to operate until early 2013.

Tough times ahead.


I suspect Pure GEO domains must have been over valued for quiet a while, if they were'nt then they would have found their way into the hands of tourism boards around the world.

Either that or the Brandable GEOS are more preferable to them. Like VisitGEO, DiscoverGEO, GoGEO etc which most of them seem to use.

I'd expect that pure GEO .com & cctlds will continue to get traffic for years and the developed ones that make a ton of money like palmsprings.com will not see a huge decline in advertisers any time soon...if they ever do.

ps) LA.co is on sedo right now for $75,000 or less


.

 

[waqarsh]

Big city gTLDs such as .london, .nyc, .berlin will likely see huge value for keyword domains, with many premium domains being registered and resold.

These could end up behaving similar to existing large ccTLDs like .co.uk.

Sometimes, these cities have economies as big as the rest of their parent countries. So these could see a life of their own.

 

[SeniorLiving]

Many US cities are close to bankruptcy and can barely fund their own essential services. Fund .niche extensions might see 5-8 major players in the US. BTW how is the .LA and .SC extensions doing for those markets.

From a brand standpoint, .com domains will have 1000X advantage (both length and breath) over a niche geo extension.

From an SEO standpoint, .com geo domains have an advantage over the niche extensions.

Considering, most geo domains remain parked - I see status quo prevailing.

The only people making money from the new extensions will be ICANN, Netsol, and GoDaddy