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The Value of a DOT US
It is of common knowledge in the domain investment community that .us domain names are not the default choice for United States companies seeking to have an online presence. It is also of common knowledge, that as a result of american’s preference for .com as their national domain extension, .us domain names are assigned a value far below their ccTLD counterparts, such as Germany’s .de (Aktien.de $725,000), UK’s .co.uk (Beds.co.uk $130,000) or Australia’s .com.au (Deals.com.au $100,000).
This week, the DNJournal will most likely announce the purchase of a .us for mid four figures. The amount of the sale is almost insignificant, but I was the buyer, and in this post I will explain my reasons for believing that the .us is highly undervalued and carries a potential for companies seeking to develop an online presence with a prime generic name.
There are two main factors for which I think the .us ccTLD has lagged in value. First, as I said above, americans prefer .com – they associate it with their national extension. Even if a .com weren’t available, it is fair to assume that there will be a preference to choose another gTLD such as .net or .org, over the official ccTLD for the US, .us. This assumption can be easily corroborated by the number of sales and dollar amount per sale for gTLDs vis a vis .us.
The second factor is the restriction for .us ownership. Only American citizens or permanent residents are allowed to own a .us, and this is exactly the population that rejects .us domain names. If a european citizen saw value in a .us, there couldn’t be a way for that person to acquire such a domain name without much hassle and risk. Thus, the small population that can purchase the extension is its worst customer.
But then, why do I think a .us carries much more value than the market is currently assigning it?
The answer lies in the fact that there is a global perception on ccTLDs, which extends the relationship of any ccTLD to one not circumscribed to the specific ccTLD population, but rather as a geographic presence towards the global community. In other words, when a portal from Russia opens with their ccTLD .ru, like Mail.ru, they are not just communicating to the Russian community about their presence. Rather, Mail.ru becomes a portal for all global citizens searching for contact with Russia. All of the world -not just russians, will recognize and seek mail.ru when wanting to communicate with the russian community.
Outside of the US, it is evident from all the local media that ccTLDs are the default choice for companies to communicate with users. Thus, all internet users outside of the US have a psychological tendency, reinforced by local media, to see the web through ccTLDs. It is only americans who predominantly only experience the web through gTLDs, primarily .com. And so, therein lies the opportunity.
First, it can be speculated either way on the adoption of the American community on a .us. One can argue that american users will be confused and tempted to type in the keyword and then .com. Others can argue that branding will be harder and carry less prestige than the .com. I, on the other hand, have confidence in the ease of branding that carries a prime keyword .us. It further resonates on the prevalent patriotism that distinguishes americans.
However, there is another way of looking at the opportunity, and that is as a portal for the rest of the global community. It is much easier for a foreign citizen to understand and to recognize a portal using the .us extension as an american portal. Therefore, foreigners will want to participate in a .us portal with the understanding that they are participating in an american environment. The .us is easily perceived as American soil by the rest of the world. And that is where the value of a .us rises. If we consider the .us extension as a window to the US for the rest of the world, where our customers are not just Americans, but the global population seeking contact with Americans, we find that a .us can hold a huge market outside of its borders.
Where in the world is dot com?
I have just returned from a trip across several countries in Latin America and Europe and noticed a consistent trend – ccTLDs are dominating the visual space of major cities outside of the US. Yes, in the US dot com is king, but not for Argentina, Chile, Greece, nor Spain.
Argentina and Chile
In Argentina, .com.ar dominates almost completely in all forms of commercials and billboards that I saw. The local extension is very popular, even though it has had the limitation of not allowing second level registration (i.e. .ar).
The same popularity for the Chile domain extension can be seen throughout their capital, Santiago. Unlike Argentina, the most popular form of the domain is the direct second level domain. Dot com or any other domain extensions other than the .cl are almost non-existent.
Greece and Spain
At Greece I had the opportunity of visiting several places mainland, as well as several of their islands including all of the most popular ones. Again, the ccTLD .gr was by far the most dominant in all the places I visited. In Athens, I saw a few dot com addresses, but possibly no more than a 10%.
Finally, in Madrid and Barcelona I continued to see the same tendency as the other places. One significant difference was Barcelona – which might be indicative of what’s to come. The official extension in Barcelona was not the ccTLD .es. Rather, the gTLD of choice is .cat, which is short for Cataluña – the region Barcelona belongs to. Aside from the government using .cat as their official extension, and many businesses using .es, there was also a few .com and .info domain names used by businesses.
Conclusion
Important regions like Cataluña could push for having their own regional extensions (and they currently are), opening the opportunity to register domains under those new gTLDs. The new CEO of ICANN has expressed ICANN’s path towards the creation of new gTLDs.
“For example, the chief of the Zulu tribe, His Majesty King Goodwill Zwelithini kaBhekuzulu, recently sent a letter notifying us of his intent to register the dot-zulu domain name so that different but related businesses and other groups can be linked by their domain name to the entire Zulu community. According to His Majesty, “We believe that the .Zulu TLD, as conceived and proposed by the Dot Zulu Project Inc. represents the best interests of the Zulu community and will be able to provide a viable structure for us as an evolving community.” New York City and the city of Berlin have expressed a similar interest in their own domain names. It is impossible to imagine the possibilities that could occur when these and a multitude of other TLDs are opened.”
If we extrapolate from Barcelona, when trying to enter a local market outside of the US, descriptive or generic domain names including the region or country (Berlinicecreams.com) will most likely be less desirable or useful than the new forms of gTLDs covering those regions (icecreams.berlin). I can see a dot com as being more desirable if it is in the travel industry, where the visitors are not the locals, but rather a population of foreigners.
There are many countries out there that still have high value generics available for registration. There are also still relatively low prices for premium generics in the secondary market for some countries. However, one big impediment has been the management of these domains, scattered through multiple NICs all having their own particular ways of renewal. So, if you are willing to deal with that inconvenience, then ccTLDs and new regional gTLDs could be a good pocket of growth for Domain Investors.
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