How big is the Business in new Top-Level Domains?

34. ICANN Meeting, 03 March 2009

Dirk Krischenowski, Founder and CEO dotBERLIN GmbH & Co. KG

What is Big Business?

The Domain Business Value Chain

.com - Follow the Money

Registries and Registrars finance ICANN

VerisignAfilias

NeustarPuntCat

…

GoDaddayYahooEnom

1&1…

$ 32 M$ 30 M

$ 2 M

The voluntary ccTLD Contributions

.jp - US$ 161,000.au - US$ 157,000.nl - US$ 100,000.de - US$ 90,000

.it - US$ 85,000.ch - US$ 70,000.ca - US$ 64,000.fr - US$ 44,000

.eu - US$ 40,000

.us - US$ 40,000.br - US$ 40,000.br - US$ 30,000

….ly - US$ 300

================

US$ 2,300,000

Fees of the gTLDs to ICANN

First and Secondary Market

First and Secondary Market

.deregistration revenues*€ 14 Mio

.deregistration revenues*€ 14 Mio

.de domain sales**

~ € 30 Mio

.de domain sales**

~ € 30 Mio

* DENIC annual report 2008 est.** Sedo annual report 2008 and other market figures

Registry Revenues today (annually)

Verisign, Inc. 80 mio .com domains x € 5 = € 400 M 10 mio .net domains x € 5 = € 50 M

Afilias Ltd. 5 mio .info domains x € 5 = € 25 M

EURID 3 mio .eu domains x € 4 = € 12 M

Tralliance 200,000 .travel domains x € 50 = € 10 M

dotASIA 300,000 .asia domains x € 7 = € 2 M

dotCAT 30,000 .cat domains x € 35 = € 1 M

Good Business

Fine Business

2nd Market – A Multi-Million $ Market

… but no single leading company

… but no single leading company

The new TLDs

Myth and Reality in new gTLDs

Projection in 2000:

45,000,000.name domains

Projection in 2000:

45,000,000.name domains

Reallty250,000.name domain names

Reallty250,000.name domain names Today: Less

than 1% of theprojections

The same with

.info

.biz

.aero

.museum…

Sources: .name business plan 2000 and .name registration figures Sept 2008

Lower Expectations today*

No. of Domains(estimated, year 1)

Revenue(per domain p.a. est.)

Revenues(estimated, p.a.)

.web > 1,000,000 € 5 > € 5 M

.shop > 3,000,000 € 5 > € 15 M

.inc 300,000 € 30 € 9 M

.ebay 100,000 € 10 € 1 M

.facebook 1,000,000 € 1 € 1 M

.cym 50,000 € 30 € 1.5 M

.nyc > 500,000 € 7.50 > € 3.75 M

.berlin 100,000 € 20 € 2 M

*Estimates by the author after field research

Most expensive Domains in new TLDs

sex.tldsex.tld

a.tlda.tld

casino.tldcasino.tld

shopping.tldshopping.tld

business.tldbusiness.tld

hotel.tldhotel.tld

> € 100,000

Why there is a Market for new TLDs

Domains are essential in today‘s communication, especially short and descriptive ones

.com is overcrowded with 78 mio. domain names, the same for .de and others

Local Internet & Search as megatrends– More than 50% of search inquiries are local (acc. Google)– Internet traffic is becoming more and more local (local CIXs)

Internet Users like it short & descriptive

43%

26%

21%

8%

1%

* Representative study, eco eV, Oct 2007.

Question: “What is your preferred address to reach the mayors website?”

www.mayor.berlin

mayor.berlin.de

www.berlin.de/mayor

www.berlin.de/de/dept/offices/mayor

www.berlin.de

Source

Source: Domaintools.com (zone file .com/.net/.org/.biz/.info

„game“ ist one of the most frequently used business

terms in domains*

game

2,006,770 domains

A word on Domaining - It‘s like Gold Rush

Registrars, Registriesand ICANN earn asmall amount on

each domain

Some Domainershit the jackpot

business.comshopping.com

…

… but most only get breadcrumbs

Conclusion

The biggest commercial success in the domain business = .com success will not be dublicated

There is less big money involved in new gTLD

Nearly all new gTLDs will be small but fine businesses

Thank you!

www.dotberlin.de/www.dotberlin.comkrischenowski (at) dotberlin dot de