News

    Think Locally, Benefit Globally

    12.03.2018

    by Stuart Fuller (CentralNic)

    The last few years have seen the domain name industry change beyond all recognition. The introduction of new gTLDs and dotBrands has increased the number of Top Level Domains available on the Internet to over 2,000. However, up until relatively recently, for nearly two decades the choice of domain extension was restricted to a handful of generic Top Level Domains (gTLDs) and country code Top Level Domains (ccTLDs). As a historical point of reference, the first available ccTLDs were .US, .UK and .IL, delegated in 1985, followed a year later by .AU, .DE, .FI, .FR, .JP, .KR, .NL and .SE.

    Technically, a ccTLD is only available to countries, sovereign states or dependent territories, although there are some exceptions – for instance the United Kingdom of Great Britain and Northern Ireland is a constitutional monarchy yet is still able to use the .UK TLD rather than .GB (which does exist and is assigned to Great Britain) and .NI (which is used by Nicaragua).

    Country code Top Level Domains are assigned through the ISO-3166 protocol rather than as many think, IANA. IANA is not in the business of deciding what is and what is not a country and thus the International Standards Organisation created a procedure for determining which two-letter code could be allocated to which country, state or territory.

    Currently there are over 250 potential ccTLDs. Typically, world events determine applications for new ccTLDs and there is not often a need for them. For instance, there are already 18 ccTLDs available beginning with the letter “A”, whilst for any Scots hoping that they will gain independence in any future referendums may need to think carefully of which ccTLD they may apply for, as 21 of the 26 possibilities have already been assigned. There are a number of codes reserved for future use such as .BL (potentially for Saint Barthélemy) and .EH (potentially Western Sahara). A few have been phased out over the years such as .YU (Yugoslavia), .DD (East Germany) and, a personal favourite, .UM which was allocated to the United States Minor Outlying Islands, a group of eight small islands with a population of around 300 in the Pacific Ocean.

    One of the main objectives of the new gTLD programme was to increase the choice of domain names available to organisations, which potentially missed out on their respective .com or .net TLDs. However, this programme took no consideration of the availability of ccTLD names. Whilst the predominant factor for using a ccTLD is to reflect some geographical meaning in the name, there are a number of ccTLDs which are blessed with ISO-3166 codes that have alternative meanings, such as Colombia’s .CO (company), Djibouti .DJ (Disc Jockey) and Tuvalu’s .TV (Television), and more recently Antilles .AI (Artificial Intelligence) and Christmas Island’s .CX (Customer Experience).

    ccTLDs still offer great value for brand holders and domain investors despite the introduction of the new gTLD programme. Many registries are opening up their ccTLDs to a wider audience, dropping some of the more stringent registration procedures and reducing registration fees. Domain names are a clearly global business and prudent investors can see the value on both the left and right of the dot.

    The latest quarterly report into the domain name industry, published by Verisign covering up to the end of the fourth quarter of 2017, shows that the appetite for ccTLD names is growing at 2.4% year on year, compared to a growth across the whole TLD market of less than 1%. There is now almost the same number of ccTLD domain names as there is in the .COM and .NET base. Unsurprisingly, the largest ccTLD is now .CN with nearly 21 million registrations, up by nearly 11 million over a four-year period. Germany, the United Kingdom, Canada and France have all seen strong growth year-on-year whilst some of the lesser known ccTLDs such as Kenya and Tanzania recorded very strong growth.

    HSBC coined the catch phrase “Think global, act local” and more organisations are starting, once again, to recognise and use the power of ccTLDs in marketing to and attracting clients within country campaigns. Further, companies are starting to use ccTLDs for vanity registrations, especially where they may have already been taken, or carry a significant price tag after being classed as a “premium” name in .com. An example of this can be seen with the keyword “domains” which is still available to register in over a dozen ccTLDs at the time of writing. For domain investors, looking for bargains, ccTLDs offer a fertile, undeveloped field.

    One of the latest trends has been for organisations to register a .CX (Christmas Island) to showcase the work they have done to improve Customer Experience with “CX” the recognised term. World events has also had an impact on domain registration numbers; the Brexit vote in 2016 for instance led to a significant increase in the number of .EU registrations.

    Just like Nominet did with .UK in 2015, we may also see some more ccTLD operators open up the top-level of their zone for registrations in 2018. For example, Australia has only used second level registrations, most notably, .COM.AU since 2002. In an announcement in April 2016, AUda, which manages the .AU zone, plans to allow registrations at the Top Level (.AU) in a similar way to .UK. This should significantly boost domain numbers in the registry, potentially through a grandfathering phase.

    Whilst new gTLDs continue to make an impression on the domain name industry, they still have some way to go to challenge the registration numbers of ccTLDs. With the number of new gTLD launches slowing down, maybe the ccTLD market will enjoy a renaissance in popularity in 2018, as more and more brand holders come to realise that it makes sense to think locally whilst acting globally, rather than just vice-versa.