The .CO top-level domain made over $10 million in just a couple of months. What do the results of the .CO re-launch mean for new gTLDs?

Remember, .CO is the country-code TLD for Colombia. Until this summer, you could only register names under .com.co, .net.co, etc. You couldn’t register myname.co. Now anyone in the world can register a .co name, and register it directly under the top level. Remember also that as a country-code TLD, .CO was not constrained by ICANN rules, which means that they were able to (re-) launch their TLD relatively quickly. Even so, their rules and regulations closely hewed to the latest ICANN rules, especially in regard to cybersquatting.

The response to the .CO launch was tremendous. Let’s review:

• 11,000 names applied for during the Sunrise Period
• 28,000 names sold during the Landrush Period (closed July 15, 2010)
• Total paid by applicants for Sunrise and Landrush names: over $10 million
• Total .co names registered as of this writing: 440,000

What do these numbers mean for prospective new gTLDs? Obviously, they prove that there are lots of buyers out there if the value proposition is good, and that’s a very good sign. There is no indication (quite the opposite, in fact) that people have anything against new TLDs. Quite the opposite, in fact: if it’s a good one, they’ll flock to it in droves.

But .CO is somewhat of a special case. There are a few things to keep in mind:

First, although cybersquatting of brand names was dealt with aggressively by the talented .CO team, we have to assume that many of the registrations were done in hopes of getting traffic from people who forgot to add the “m” to a .com URL. No new gTLDs will be able to benefit from similar fat-fingered mistakes, because ICANN is running a “similarity test” to make sure that there aren’t such confusions. We won’t know how much typo traffic there actually is until it comes time to renew the names. Then, speculative traffic names will either be renewed (if they received typo traffic) or will be dropped (if they didn’t). So keep an eye on next July for interesting stats.

Second, the .CO team is really good, and did everything right. They hired smart veterans and spent a fair amount of time and money making sure that brand owners and registrars knew what was happening, what the rules were, how and when to apply, etc. This had the virtuous double effect of almost completely eliminating complaints about the process and also maximizing registrations. New TLD applicants, take note.

Third, .CO had the field to itself. When new gTLDs start launching, it will probably be on a rolling schedule, but nonetheless there is likely to be more than one launch at any given time.

These are the factors giving .CO an edge, but this doesn’t mean that new gTLDs won’t be able to duplicate or surpass their success. Many of these considerations are double-edged swords. The fact that .CO is a misspelling of .COM also means that fewer real sites will get built, fewer names will be renewed, and cybersquatting problems will be relatively larger than in most new gTLDs. The fact that .CO spent a lot of money means that their profit margin is lower.

Every new TLD launch will have specific considerations and circumstances that will both help and hinder its growth. Several new gTLDs, especially geographical names and communities, will have natural constituencies that will fuel registrations. Others will have worldwide appeal. Many will not measure their success in registrations, but instead on service to their communities.

Overall, the .CO launch should make prospective new gTLD applicants very happy indeed. It is a great proof of the market, and it shows (once again) that intelligent branding and marketing will go a long way to making a project a success.