What I find fascinating is that the observed transaction prices of domain names reveal a free market valuation of linguistic characteristics and language itself.
- Thies Lindenthal
As the digital age dawned, pioneers successfully snapped up broad swathes of the most popular and memorable domain names, such as nouns, places and combinations thereof – claiming valuable ‘virtual real estate’ under the top level domains such as dot-com, dot-co-dot-uk and so on.
Now, the first research to try and define current demand for Internet domain names suggests that the drying up of intuitive and familiar word combinations has seen domain registration drop far below the expected appetite, given the extent to which we now live online, with new entrepreneurs struggling to find “their slice” of virtual space.
In fact, the study estimates that the lack of available high quality domains featuring popular names, locations and things could be stifling as much as a further 25% of the total current registered domains.
With the total standing at around 294 million as of summer 2015, this could mean over 73m potential domains stymied due to an inability to register relevant word combinations likely to drive traffic for personal or professional purposes.
However, as the Internet Corporation for Assigned Names and Numbers (ICANN) has begun to roll out the option to issue brand new top-level domains for almost any word, whether it’s dot-hotel, dot-books or dot-sex – dubbed the ‘not-coms’ – the research suggests there is substantial untapped demand that could fuel additional growth in the domain registrations.
Dr Thies Lindenthal from the University of Cambridge, who conducted the study, says that – while the domain name market may be new – the economics is not. The market fits nicely onto classic models of urban economics, he says, and – as with property – a lot rides on location.
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Reproduced courtesy of the University of Cambridge
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