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Domain Pulse 2011: New gTLDs, Their Impact on Aftermarket and Importance of Domain Names

The impact of new generic Top-Level Domains on the price of existing gTLDs and ccTLDs is likely to be limited, Tim Schumacher, CEO of leading domain name marketplace Sedo, told the the Domain Pulse conference in Vienna, held on 17 and 18 February.

“I don’t think the new gTLDs will have a major impact on pricing of existing TLDs. If you start a company or a product, you will always need to have your ‘dotcom’ or respective ccTLD in the market you operate in,” said Schumacher in an interview following the conference.

“A valuable one-word in a good TLD will carry value for many years to come. Some low-end TLDs and domain names might suffer a bit though, for example, if suddenly a free alternative TLD pops up so that there is no need to pay a few dollars for an inferior domain.”

But the prices for individual domain names in the Sedo market are relatively flat with domain name prices not increasing markedly, however sales numbers and revenues are continuing to increase, Schumacher said during a panel session at Domain Pulse titled “The Domain is Dead—Long Live the Domain?”.

Generally though Schumacher sees .COM and the major European ccTLDs such as .CO.UK and .DE are doing better than others in terms of prices when looking at market trends. However like with .COM and the sex.com sale in the last quarter of 2010, these prices are subject to significant variation from one or two key sales.

The panel session also looked at the role of a domain name in a company’s branding and image. While a domain name is viewed by many as important, there are alternative means of promoting a company or brand such as through social networking services another panel member, Sabine Hoffman from marketing company ambuzzador, said, and these can be complementary to using a domain name.

The panel discussion was a feature of day one of the annual Domain Pulse conference, Europe’s most important annual domain name conference. The conference was attended by 350 people (out of 480 applications for the free tickets) from around the world, but mostly from Austria, Germany and Switzerland, learning from and networking among their peers.

Also on the panel was Christian Kallenberg, chief editor of FHM magazine in Germany, who ditched the domain name for FHM Germany and now relies entirely on promoting the magazine through Facebook. Kallenberg says this move has been very successful, and much more successful than using a website with the magazine’s own domain name. And much cheaper.

However this method was not supported by Schumacher and Hoffman. Questions were raised as there is a lack of control over how you can project your brand online. For example, Facebook, Twitter or another social networking site may introduce charges in the future that could relate to the number of friends or people ‘liking’ the page. Should this happen, the business may or may not be up for a considerable fee. Hoffman wondered what would happen if Facebook introduced a charge of $1 per friend on Facebook.

Additional problems could be changes in terms and conditions, the introduction of strict regulation of sales such as proposed last week by Apple for sale through applications, the loss of popularity of the social networking site or even the collapse of the website.

Hoffman believed that using Facebook was a good idea, but should be used in conjunction with a domain name and website, redirecting from your company website to Facebook through an address such as facebook.brandname.at.

By David Goldstein, Consultant, researcher, analyst and online news monitoring

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Dotcoms for Startups? Brian Retkin  –  Mar 4, 2011 11:37 AM

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