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Will domain names last forever?
Domain names can be treated like a non-renewable resource, such as gold. There is only so much gold available on earth. Similarly, there are only so many domain names available for purchase. The value of domain names highly depends on the possible letter-number combinations still available and how long people are willing to come up with their domain names.
If you’ve ever thought of domain names as a commodity such as gold, you’ve probably wondered if domain names will ever become obsolete. As of now, the answer is no. But how about in the future? In 10 years? In 100 years? Several factors play into this and several courses of action for potential domain owners. Let’s take a closer look.
The Popularity of .COM
By far, the most popular web suffix on the internet is .COM. As in the “.COM” in thedomainpromoter.com. As of 2015, over 115 million .COM domains were registered worldwide, representing approximately 42 percent of all existing web addresses. Thirty years have passed since the inception of .COM domains. Now, people are starting to wonder if it can still retain its dominance.
For added context, the first .COM domain name (symbolics.com) was registered in 1985. The domain was then purchased by XF.com in 2009, retaining its record as the oldest registered .COM domain on the internet.
Like most newly released technologies, .COM launched with a relatively slow start. The first movers to get involved with the .COM hype were primarily technology companies such as Intel and Siemens.
In just over ten years, by 1997, the millionth .COM domain was registered as the internet bubble began to grow. As large corporations started choosing .COM as the go-to domain suffix, all others started to follow suit.
The Problem: Scarcity
If the growth trend of .COM continues, the market will eventually have to adhere to the rules of scarcity. Now, we’re not going to subject you to a lesson in economics. Instead, we’re going to review the basics.
Scarcity refers simply to the occurrence when the means to fulfill certain ends are limited and costly. In our case, less and less available domains equal higher domain prices and fewer options.
A finite supply of domains is not the only factor when it comes to domain scarcity. Increased demand can also raise scarcity levels. As the internet grows more and more popular, more people have been building their websites and registering their domains.
To give everyone a fair way to obtain domain names, domain registration operates on a first-come, first-served model. This model allows smaller businesses and individuals to get key domain names before larger corporations, as long as they are the first to reserve the names.
Domain investing has increasingly grown in popularity because individuals have come to recognize that big corporations will do almost anything to obtain a good domain name in line with their marketing and branding.
A famous example of brands leveraging their assets to obtain their preferred domain name is Uber. Uber agreed to trade 2% of the company’s shares to Universal Music for the domain name uber.com. Two percent may seem like a small number at first, but do keep in mind that Uber is a multi-billion dollar company. Slack, on the other hand, paid directly in cash. More specifically, they spent a whopping $60,000 for the domain name slack.com.
Domain names are an integral component of any brand’s online presence, so companies make it a point to fight for them.
The Future of Domains
In 2014, the Internet Corporation for Assigned Names and Numbers (basically the coordinators of the internet) introduced a series of several generic domain extensions. This change gave prospective domain buyers alternatives to an increasingly small pool of available .COM domains. Some of the new web extensions include .club and .link, which have experienced a long string of success.
Nike owns the .nike extension and BMW owns .bmw. We expect more companies to follow this style of self-branded domain extensions in the future and the years to come.
Domains are a strange sort of commodity. Inherently, there is only a finite supply. However, we’ve seen that finite supply increase. As high-quality .COM domains started to become more scarce, alternative domain extensions have risen in popularity.
If you’re looking for a simple answer, then no, domains will not become obsolete. They will, however, become more valuable as less and less of them become available. Key domains will cost more, and if you’re lucky to own one, companies will be willing to pay you a ridiculously large amount of money for it.
The internet will always require domain names. Domain names will never be phased out and will never “go out of style,” lest we wish to return to typing in a bunch of numbers such as 192.168.1.1 to arrive at Facebook’s home page. Domain names will always retain their usefulness and have become an integral part of the ever-expanding world wide web.
If you’re interested in learning more about domain names and how you can get started with investing in them, check out the other resources I’ve posted right here on thedomainpromoter.com.
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