The Domain Industry Looks to Smaller Companies for Innovation

The Domain Industry Looks to Smaller Companies for Innovation

Success comes with its own pitfalls. Or, to put it another way, once a company secures a significant share of a particular market, there can be a tendency for them to stop innovating, and instead rest on their laurels. At the moment, it's strikingly clear in the domain name market, larger companies are doing just that.

Success comes in many forms, though, and not cannot be measured merely by market share. The most exciting companies in the domain industry today are considerably less capitalized than the industry “leaders,” but are also very important for the transformation of the industry.

A good example of this is the way that smaller companies are working with TLDs like Amazon’s .bot. Though relatively new, .bot is one of the most heavily capitalized TLDs, because of the level of investment that Amazon has poured into it. The .AI country-code domain from Anguilla is its primary competitor and has a head-start.  But Amazon is determined to dominate the artificial intelligence space and is willing to invest in the new discovery tools required to own the market.  But under ICANN rules, they need to work with accredited registrars.  This is where companies such as EnCirca step in to consult with these new gTLDs registries, giving them a path towards differentiation in the market.

In this article, we'll take a look at the state of the domain industry, and give well-deserved credit to a few of the smaller, more exciting players in this market today.


The State of the Art

Take a look at the state of the domain name industry today, and it's immediately clear that one company sucks up all the oxygen: GoDaddy, currently dominates the domain name market, and that is not going to change anytime soon. Even their closest competitor – Tucows – is in a distant second in terms of market share.

This is not necessarily a problem. In combination, these two companies have centralized the domain name marketplace. That means that if you want to buy or sell a domain, you know exactly where you need to go. That's also why both companies take 20% of the sales of your domain names: they believe this is a fair cut for bringing you buyers, and they are probably right.

On the other hand, if you examine the UI of either GoDaddy or Tucows, and you'll see that they might have gotten a little lazy. Both are in desperate need of updating. Whether that's a priority for either company, given their ongoing success, is another question.


Agility and Innovation

It would be a little unfair to criticize either GoDaddy or Tucows for a lack of innovation. They know their business, they are conducting it in the way it's always been done, and they are doing very well from that. But that means that to find the most exciting things happening in the domain market today, you have to look at smaller companies.

These innovations can be broken into three main categories. The first set consists of companies that are taking a fresh look at domain financing and payments., for instance, has started to sell domains on payment plans, after which ownership automatically returns to the seller. This is great news for the seller, because most people who buy domains on plans end up making all of the payments. Those that don’t tie up the domains for a short while, sure, but in that case the domain seller gets to keep the cash and the domain.

A second type of innovation is in marketing domains for sale. In this area, SquadHelp is making waves. By building a data-driven engine behind their landers, the company is able to target its outreach much more tightly. This brings domain marketing in line with other industries, and specifically a parallel shift that happened in the consumer cybersecurity software market a few years ago and pushed a handful of industry leaders from relatively unknown status to generally high name recognition. Squadhelp’s advances in this include remarketing to landing page visitors, and 24/7 chat/phone support on landers. The data analysis which sits behind these capabilities is explained by CEO Darpan Munjal in a recent podcast.

Last but definitely not least, there is Encirca. A small, agile company that prides itself on being at the forefront of the new technologies that are gently revolutionizing the domain industry. The company has been heavily involved with the rollout of restricted new gTLDs, blockchain, and crypto top level domains. Even more exciting is the way that they are working with the new handshake dns, which brings a level of security to consumer-level domains that has only previously been seen on large, customized corporate networks.


The Future

It's also likely that these innovative features will start to have an impact on the giants of the industry over the next few years. GoDaddy and Tucows didn't gain such a huge market share, after all, by ignoring what was happening around them. As is the typical model today, it's likely that the new features that are being pushed forward by smaller companies will eventually be adopted by these two dominant marketplaces.

A major focus of the next few years is going to be added security. With the risks of cyberattack always on the increase, domain registrars are (perhaps somewhat lately) beginning to take the security of their back-end systems more seriously. For that reason, if one were to pick the most exciting of the companies mentioned above, and the one that is most likely to have an impact on the industry as a whole, it would be Encirca.

This is because Encirca takes cybersecurity for domain management extremely seriously. The threat of cyber hijacking has been a major "growth area" for cybercrime in the last few years, and Encirca has taken direct action to address this. By providing customers with the ability to employ two-factor authentication in order to access their domain control panel, and by offering secure DNS and email authentication, the company is seeing great success with reducing the vulnerabilities their customers face.  Their major registry partners include .BANK, .BOT, .PHARMACY and .CPA.

EnCirca is also the most active ICANN registrar helping companies protect their brands on alternative TLDs running on the Blockchain, including support for Handshake, .ETH and .Crypto TLDs.

So next time you are looking to buy or sell a domain, give the smaller companies a chance. You might be surprised by the extra features they offer.


About the Author:

Brian Skewes is a technologist into deconstruction. Over two decades of self-employment, he has accumulated a wealth of inadvertent real-world lessons related to building, running, and preserving a small company.


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