Market Trends and Future Perspectives

The emergence of wholesale domain registrars further increased the competition within the industry and forced registrars to use all possible means to maximize their market shares. In order to differentiate and to increase the probability of users registering new domain names, many existing sites have already successfully adopted the concept of domain name generation. As the growth of eCommerce slows down and the number of domain registrations follows, the levels of rivalry among competitors will reach new heights and more players will adopt domain generation capabilities.

Another factor, which will most probably have an effect on growth in the domain generation and registration market, is the introduction of new domain name extensions.  In the near future ICANN plans to launch some of the following potential new extensions:

v     .biz       - Same function as .com

v     .info      - For information services

v     .pro      - For professional services

v     .shop    - For businesses offering goods/services

v     .rec      - For recreation groups and organizations

v     .nom     - For personal names

v     .arts      - For entities/groups in culture and entertainment

v     .web     - For entities or groups providing services related to the World Wide Web

v     .firm     - Same function as .com

The introduction of any of these extensions will create an enormous number of new registrations as existing domain name owners will rush to secure their names as soon as possible. The current estimate is for the names to be released between January and June of 2001. ICANN however has not released the exact time and date. The anticipation for the release of the new top-level domains is generating tremendous excitement among those in the Internet community. Registrations are expected to hit record numbers when the names are released for registration.

Another major development is the possibility to register multilingual domain names.  It will also affect the scarcity of good domain names and decrease the need for domain name generators. However, English character ".com" names will always remain in high demand (see chart 4 for domain distribution), since they are closely associated with eCommerce and easier to use internationally. Even taking into account the explosive growth in domain registrations in 2000 and scarcity of good domain names, the percentage of  ".com" relative to ".net" and ".org" dropped only 2%.

Chart 3: Domain Name Distribution in 1999/2000

Even after the deregulation of several TLDs like ".cc" or ".ws", the growth in the ".com" market did not show any signs of slowdown (see chart 4 for weekly registrations analysis).

Chart 4: Weekly Registrations Analysis (Dec 00 – July 00)