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:
- Don’t expect .web to rival .com. That ain’t happening. Not even .net did that and it is as old as .com.
- Don’t expect .web to have cheap regular registrations and renewals. Verisign needs to make the money spend in the auction.
- 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.
- Don’t expect .web to be cheap. Period. This is the extension that Verisign will use to make up for the lost .com revenue.
- 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.
- 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.