Analysis Group Study Establishes Baseline to Assess Competition in the Online Domain Name Marketplace

October 02, 2015

Top-level domain names such as ".com," ".net," and ".org" are an integral part of the organizational hierarchy of the Internet, and beginning in October 2013 new top-level domains ("TLDs") were introduced within the context of the New Generic Top-Level Domain ("gTLD") Program. In the first phase of a two-phase assessment, an Analysis Group team led by Vice President Greg Rafert and academic affiliate and MIT Sloan School of Management professor Catherine Tucker conducted a study of the impact of the New gTLD Program on marketplace competition for the Internet Corporation for Assigned Names and Numbers (ICANN), which maintains these top-level domains. The study, "Phase 1 Assessment of the Competitive Effects Associated with the New gTLD Program," assessed the New gTLD Program based on three metrics - competition, consumer choice, and consumer trust review - to establish a baseline analysis that can be used to inform a future Phase II assessment of changes or trends in the marketplace.

The report found that 18 months after the start of the New gTLD Program, the number of gTLDs available for purchase had risen dramatically from 22 legacy TLDs - just "14 of which [were] available without certain restrictive registration requirements" - to 428 gTLDs. While legacy TLDs comprise the majority of domain name registrations, the report found greater dispersion of registration shares for new gTLDs than for legacy TLDs. In its assessment of an economic framework for the marketplace for domain names, the report also found that "the cost of registering a domain name is a relatively small part of the total cost of creating a website" when other products, such as email and web hosting, are considered. It also found that there were significant differences in the level of price dispersion among add-on products. In the next year, a follow-on Phase II Assessment will build on these findings to examine "changes in prices and registration volumes" for sample TLDs and new gTLDs, as well as changes in "add-on prices and availability." This Phase II Assessment will also draw on additional historical, transaction-level data from registrars and other secondary market facilitators.

Read the ICANN Press Release

Read the study