Why Verisign Bought The .Web Domain Extension And What NOT To Expect

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So Verisign paid $135 million to get the exclusive rights to the .web new domain name extension. But why and what you should expect or rather NOT to expect?

The price was very high but Verisign does not have a cash shortage and will eventually break even and begin making money of .web. .Shop was auctioned for $41.5 million in January 2016 to GMO Registry, Inc. and Google won .APP paying $25 million in February 2015.

Verisign ended the second quarter with cash, cash equivalents and marketable securities of $1.9 billion. Clearly they had no problem spending $135 million and overshadowing any competitor.

Verisign clearly went for a generic new gtld and the one that could be a direct competitor to its .net. They only went for the best New gTLD and got it. (They have a few IDN new gtlds but these were complimentary extensions to .com and .net. I doubt they will ever be making any serious money from these extensions if any.)

.Web was not destined to be a direct competitor to .com. Either with or without Verisign. And no, you don’t HAVE TO buy the corresponding .web to your .com just like you don’t own the .net, .org, .biz, .us and all the other extensions. You only have to buy it (in my opinion) if your company or service is located at ******web.com.

A lot of people think that .Net and .Web have similar target audience and they are mostly right. The extensions are both in a sense generic but also have a bigger appeal to online services and products.

So now Verisign will always be a domain name registry and now has better long term viability regardless of the .COM, .NET or ccTLD contracts. Verisign bought an extension that will operate for many years to come. It is not dependent on any registry contracts that might expire in a few years like the .com and .net contracts.

Verisign can control pricing for .web domains both for regular priced domains and the (numerous) premium names. Verisign controls pricing on .web unlike the frozen pricing on .com and the regulated 10% increase on .net domains every 12 months. Verisign is allowed by it’s contract with the Internet Corporation for Assigned Names and Numbers (ICANN) to increase the registry price for .net 10% every year. On the same day they Verisign bought .web they also announced an increase in the annual fee for a .net domain name registration from $7.46 to $8.20, effective Feb. 1, 2017.

Verisign bought a generic extension that they know how to operate and market AND they already have many potential buyers. They will for sure try to sell .web domains to all .com and .net registrants.

Verisign already has good placement agreements in various registrars for .com and .net. They can easily push .web to new buyers alongside .com and .net. Don’t be surprised if you never hear from Verisign the term New gTLD accompanying .web.

Here is what not to expect after the .web auction purchase by Verisign:

  1. Don’t expect .web to rival .com. That ain’t happening. Not even .net did that and it is as old as .com.
  2. Don’t expect .web to have cheap regular registrations and renewals. Verisign needs to make the money spend in the auction.
  3. Don’t expect for all .web domains to be available at launch. Expect a lot of reserved and a lot of high priced premium domains.
  4. Don’t expect .web to be cheap. Period. This is the extension that Verisign will use to make up for the lost .com revenue.
  5. Don’t expect any other new extension to reach this price in auction. Not even .music if it ever reaches an auction. This was a power play. (that will also make money in the long run for Verisign) But New gTLD auction prices could be slightly higher (than what they would have been) in the future because of this purchase.
  6. Don’t expect Verisign to market .web as a NOT-COM extension or the second coming but for what it is. A new generic extension that could be (but will not always be) a cheaper alternative to .com.
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About Konstantinos Zournas

Konstantinos studied Computer Engineering and Computer Science in London and lives in Athens, Greece. He loves domains and building websites. He is online since 1995, learned about html in 1996 and got into domains in 2002. He started the OnlineDomain.com blog in 2012.

23 comments

  1. Very interesting move. I think for me biggest element is this:

    “Verisign bought a generic extension that they know how to operate and market AND they already have many potential buyers. They will for sure try to sell .web domains to all .com and .net registrants.”

    This what made google chrome #1 from nothing. Constant promotion on google main page. In 1 year it had 50% of the market of browsers….
    I dont think Versign has similar reach too google, but it does have giant reach and huge fists full of dollars.

  2. Great move by Verisign for diversifying. As you mentioned .Web is not to take over .com and won’t claim to take over the top spot as others have said….Gold (.com) will always be more than silver (new G’s), but investors can make money on silver just like gold.

  3. You’ve made some very astute points, Konstantinos. Well laid out.

  4. Great post. I see this killing whatever life was left in the other new-gtlds and instead, limiting online companies to either .com, .net, .org and .web. Period. Seems the web wants to grow vertically, not horizontally. At least for now, there seems to be no need for any of the others and this has quickly become apparent with this purchase.

  5. This is a very pricey purchased; what are you thinking. Maybe it’s okay if you don’t have any other new gTLD competition. .web it is just another new comers domain name. Does .web can tell you what kind of business are you running? Example: pizza.pizza. This has two functions; one it tells you, you are in pizza business; and second it can also serve as your business address. What are the function of the .web? I thought the birth of new gTLD is to reduced or is to eliminate confusion. Yes, .web has similar function with .com, net and org. These extension does not have clarifications, in terms of business specification. Example: you can registered one domain name that said auto.com. Having this broad extension it allows you to have multiple business. You can sell cars, rent cars and fix cars. Unlike, the other new gTLD has its specification; example car.rent or car.sell. It’s always good to know what kind of business your competition has. This way, you don’t have two business the same area; that is only a few steps from each other. Moreover, if your competition is selling car but trademarked car .rent. Then it is called cheating…that’s the disadvantage of having a none specific extension. You can challenge this notion; but this only my simple views of certain new gTLD. Smile sunshine is shining ?

    • “I thought the birth of new gTLD is to reduced or is to eliminate confusion.”

      If there’s 1 thing keyword nTLDs definitely DON’T do, it’s eliminate confusion. A domain like Chicago.Pizza introduces an ambiguity with respect to ChicagoPizza.com that didn’t exist before.

      The nTLDs were introduced for 2 reasons: (1) to make registry operators money; and (2) to provide a wider range of unregistered domain names for consumers to choose from.

      Yes, keyword nTLDs like .PIZZA and .PLUMBING certainly do multiply options (and costs, and risks) for consumers. Yet the name spaces for these individual keyword nTLDs are constrained by meaning and rather small.

      Other nTLDs allow far more breadth of possibilities. That’s what .XYZ was trying to do – as were other (in my opinion, better) TLDs such as .LINK, .ONLINE, etc. .WEB belongs to this latter category.

      Not all observers are impressed by .WEB. For example, Elliot Silver has wondered allowed what all the fuss is about. But I think the majority of observers for several years now have seen .WEB as the suffix most likely to be a huge breakout success. That has always been my view.

      • I am not too impressed with .web too. It is good but not something that will change the internet or the overall future of the other new gtlds.
        I understand that the numerics, short (1 to 3 characters) and 1-word domains are going to have some appeal but for the rest of the domains I am not sure.

      • @Konstantinos,

        I agree with you that .WEB won’t transform the internet as a whole, nor will it affect “the overall future of the other new gTLDs”. Some domainers have been proclaiming in the past few days that .WEB has now killed the nTLD program. I fail to see why. What! Didn’t they know .WEB was coming? This wasn’t exactly an ambush.

        What I do expect is that .WEB will be a breakout success and outpace any other nTLD in terms of long-term registrations and visibility. As a brand, .WEB seems more like established TLDs – more like .NET. Consumers will see it positioned alongside those.

        .WEB doesn’t really resemble most of the nTLDs, which are keyword-specific. Its future can, I think, largely be uncoupled from the future of .PHOTOGRAPHY, .SOFTWARE, .ENTERPRISES, and the rest of the nTLD crowd.

        nTLDs have struggled to find meaningful adoption during the past 2 years, but they’ve been making some inroads. They’ll continue to inch forward. And why not? The arguments for and against them are still the same, with or without .WEB. Good left-right combinations like Net.Work or Off.Market (mine) still look appealing even if the suffix is comparatively unknown. They’ll sell and be used in smaller numbers; but they’ll sell and be used.

  6. Interesting view. I’d personally run to all Registrars with the Negari approach to .XYZ domains and distribute “.web” domains as much as possible.

  7. Have been reading various opinions about this .web TLD and what Verisign would do or not do with its new domain.

    Not a fan of .web yet, but hope the pricing won’t be ridiculously high as some have suggested.

    That said, does anyone think the pricing for .web would be in the $10 – $20 range, or above?

  8. I forgot to mention in the article that China will probably be all over .web.
    Chinese investors will buy any short .web domains they can.

  9. How can I forget .web for $135M; July 27 was my birthday. Thank you Verisign, happy birthday to me ?.

  10. The level of sentence structure typos and mistakes make this article very difficult to read and take seriously.

  11. Serious people is in the hospital ☺️

  12. Great article Konstantinos!

  13. Grammars, structures sentence style are out of fashion. That was 30 years ago that your teacher want you to be all that and all this writing skills shit! Have you ever received a note from a doctor; that sometimes you will say WTF?

    You if you think your world is perfect, then your are in the wrong.planet ?

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