Saturday, 30 July 2016 05:10

Market shock as domain purchase hits record high of US$135 million Featured

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Market shock as domain purchase hits record high of US$135 million Image courtesy of Stuart Miles at freedigitalphotos.net

The right to sell .web domain names has sold at auction for a record US$135 million, more than thrice the previous record for a new Top-Level Domain (TLD) — .shop which a bidder snapped up for a cool US$41 million earlier this year.

The massive price has reportedly sent shockwaves across the Internet with Tony Kirsch, the Melbourne-based head of professional services and TDL advisory firm Neustar, suggesting that the $US135 million price tag for .web “proved that the next evolution of the Internet was in full swing”.

“This is the strongest indication yet that the evolution of new digital naming is going to change how we navigate the Web forever,” Kirsch said.

“When you consider that Google and other global Internet leaders like Web.com (NASDAQ:WEB) were all bidders in this auction, you know it’s a big deal.

“The take home message from all of this is that future generations will now grow up in a world where your digital identity reflects exactly who or what you are, rather than relying on the legacy domain extensions that were the only ones available at the time.”

According to Kirsch, in addition to local namespaces such as the popular .melbourne and .sydney domains, the next big shake-up is going to be in the world of branded domains where the likes of BMW, Canon and the AFL have launched their own .brand TLDs - .bmw, .canon and .afl respectively.

“We are seeing some major organisations with significant consumer influence and marketing muscle recognise the value of digital branding.

“While it’s still early days, the .web result is just another example of how the Internet is changing.”

In fact, the money paid for domain names has varied in more recent years, with prices gradually moving up, after the Internet Corporation for Assigned Names and Numbers (ICANN) in 2008 decided to expand the overall number of generic TLDs.

Under the the expanded market, TLDs which received more than one application and were not resolved privately went to an auction like the one which has just closed for .web.

In 2014, Amazon paid nearly US$5 million for the .buy domain, and just US$2.2 million for .spot – paltry sums for the giant online retailer to pay when you compare it with the US$135 million forked out on .web on Thursday.

Prices then shifted up quite a few notches in 2015 when Google paid $US25 million to buy the .app web domain, and another significant jump to US$41 million paid for .shop earlier this year.

And now, judging by this week’s record US$135 million — paid by an as-yet unnamed buyer the sky is the limit.


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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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