The shortage of familiar domain names such as dot-com and dot-co-dot-uk have seen domain registration drop but the rise of 'not-com' domains can open up new areas of the internet, says a new study.
The study, published in the Journal of Real Estate Finance and Economics, found that the lack of available high quality domains featuring popular names, locations and things could be stifling as much as a further 25 percent of the total current registered domains.
"Cyberspace is no different from traditional cities, at least in economic terms. In a basic city model, you have a business district to which all residents commute, and property value is determined by proximity to that hub," said lead author Thies Lindenthal from the University of Cambridge.
"It's similar in cyberspace. The commute to, and consequent value of, virtual locations depend on linguistic attributes: familiarity, memorability and importantly length. A virtual commute is about the ease with which a domain name is remembered and the time it takes to type."
With the total standing at around 294 million as of summer 2015, this could mean over 73 million potential domains stymied due to an inability to register relevant word combinations likely to drive traffic for personal or professional purposes, it added.
However, as the Internet Corporation for Assigned Names and Numbers (ICANN) has begun to roll out the option to issue brand new top-level domains for almost any word, whether it's dot-hotel, dot-books or dot-sex, dubbed the 'not-coms',the study suggested there was substantial untapped demand that could fuel additional growth in the domain registrations.
Google were one of the first to use a 'not-com' to get around the domain name shortage. Finding all obvious domains taken for its new parent company 'Alphabet', the company acquired space on the new dot-xyz domain to create the canny web address: http://www.abc.xyz. Serious money is currently being invested in 'not-coms'.
With initial application fees around the $185k , Lindenthal said it could be as much as $2 million before you have the necessary infrastructure to secure and manage your new top level domain, but, once owned, you are able to set prices for anyone who wants to acquire virtual real estate under that domain.
"By 2013, as much as $350 million had already been put down in application fees alone, and further billions must have been invested. Clearly, corporations and entrepreneurs have trust in the new domains being able to serve a previously unmet demand, and from this research it appears some of them may be right," said Lindenthal.
However, while the new 'not-com' boom will open up huge new areas of the internet, Lindenthal said the overarching constraints would kick in again further down the line, which may be precisely what makes the new top level domains a worthy investment. "The set of catchy keywords that appeal to humans is still bound by the way we process language, even if we had unlimited choice in top level domains," he said.