How is the domain and internet industry changing? - Nominet Registrar Conference Alexa Raad, CEO Architelos www.architelos.com
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How is the domain and internet
industry changing?
Nominet Registrar Conference
Alexa Raad, CEO
Architelos
www.architelos.com
January 22, 2015
© 2014 Architelos and/or its affiliates. All rights reserved. 15
Nothing Happens in Isolation
The present (much like the future) is
the combined outcome of many
events and turning points, each
shaping and influencing the direction
of the other, much like fall of a series
of dominos.
Agenda
1.A New Era: the Mobile Computing Cycle
2.Evolving Web Business Models
3.How the Domain Industry Value Chain Is Changing
• What About Google?
4.Closing Thoughts
Mega Trends – Shaping Social & Tech
• Mobile
– Access, Content, Device, Usage
• Connectivity & Convergence
– More people online, devices converging
– The Internet of Things
• Bricks and Clicks esp. in Retail
– Seamless integration of online and real-world
• Big Data Analytics
• Cloud Computing
• Privacy vs. Security
We Are in a New Computing Cycle: Mobile
1,000,000
More than mobile
And it is 10 times the installed phones!
Device per users (MM in log scale)
• Smartphones
base of what we have known Mobile Internet • Tablets
100,000
You • Internet enabled
Are devices (i.e. GPS,
Desktop users Here Video and music
10,000 players, cameras,
10B+ Units home
entertainment and
PC • Internet
1B+ units/
1000 users Appliances
Minicomputer 100MM+ units
Mainframe
100 10MM+ units
1MM+ units
1M+ units
1960 1970 1980 1990 2000 2010 2020
10
Source: KPCB Internet Trends 2014 – Mary Meeker
More Smartphones than PCs & Laptops Combined Source: KPCB Internet Trends 2014 – Mary Meeker
Tablet Has Staggering Growth Trend
Tablet Growth is Much
Faster than Desktop or
Notebooks
Source: KPCB Internet Trends 2014 – Mary Meeker
Globally… 25% of Web Traffic is Mobile
And it is
growing at 80%
year over year
Source: StatCounter May 2014
And UK leads the Mobile Pack in
Europe
Device share of page views across countries in Europe.
UK mobile
page views
expected to
hit 50% in
2014, up
from 30% in
2012.
Source: Comscore Device Essentials, May 2012
The Rise of the “Mobile Addict” “Mobile Addict” is a consumer that launches apps more than 60 times per day. As of March 2014, 500,000 apps across 1.3B devices as were examined. Research shows that on average, a consumer launches apps 10 times per day. A “Mobile Addict” is someone who launches apps 6 times more per day than the average. Source: http://www.flurry.com/blog/flurry-insights/rise-mobile-addict#.U-DerEgdWhx
…Signals a Tipping Point of the Internet
As of 2014, more users access
…and they are spending more
the web via mobile than
time on Apps
desktop
Source: Comscore, DataFlurryWe Already See Domains Taking a Back Seat © 2014 Architelos and/or its affiliates. All rights reserved. 27
Motivation: Mobile Advertising Spend
Follow the
Money -
Innovators
trying to fill
this Gap
© 2014 Architelos and/or its affiliates. All rights reserved. 28Long-Term: Reduced DNS Visibility
Internet Users are getting farther and farther away from domains
Domain
Name
(URL)
Search Results Domain
Page Name
(URL)
OR Browser Domain
Behavior Name
(URL)
QR code URL Domain
barcodes Shorteners Domain
Name
Name Not
(URL)
Social media Visible
Domain
Name
Apps Not
VisibleImpact is Already There… • Aggregate Market Growth • Growth of existing (Com/Net) • Growth of New (gTLDs)
Global Domain Growth Is Slowing
Developed Domain Market
Slowing Faster than Total Market
Source: Architelos AnalysisEurope is Slowing Faster than Total Market Source: Architelos Analysis
VRSN (.com) Renewals Dropping Steadily
VRSN estimated
renewals to fall to
71.7% in Q2, 2014
Source: http://finance.yahoo.com/news/why-verisign-sees-softer-domain-130011295.html August 11, 2014New gTLDs Have Not Met Expectations in Revenues, Registration
Volume…
• 436 New gTLDs delegated (mostly
generics)
• 4M domains names registered, but 25%
given away for free
• .xyz 769,178 19%
•.网址* 354,418 8.78%
• .club 167,069 3.85%
• New gTLD domains are 1.4% of all
domains (est. 280M total domains) .As of Jan 18, 2014
.website in Chinese..or content
Only 3% content with 41% PPC
Speculation / Domainers driving name sales
Source: June 29, 2014- http://blogs.verisigninc.com/blog/entry/website_usage_analysis_in_theAgenda
1. A New Era: the Mobile Computing Cycle
2. Evolving Web Business Models
3. How the Domain Industry Value Chain Is Changing
• What About Google?
4. Closing ThoughtsDNS Usage Has Caused Business Models to Evolve
Web 1.0
Domain
Tasting
& Adwords
200M+ Large Brands
Adopt &
Enforce IP
Domain name
growth
Traffic has
value
Names
Have value gambling.com
Mobile /Social computing begins
sells for $20M
PC dominated world ends
1999 2002 2005 2008 2009 2010 2011 2012 2013 2014 Beyond
Directories Google Google as Twitter Mobile 10B apps 1930 46B apps Go Daddy IPO
Rises Ad platform Facebook & FB eclipses D/L from new D/L from
User Generated Google as Apple gTLD Apple
Content Most popular Apps
FB IPO
siteAnd Value Names, then Targeted Traffic…
Web 1.0 Web 2.0
Brands use Mobile apps take
Domain off
Tasting facebook.com/brand
& Adwords On ads
200M+ Large Brands
Adopt &
Enforce IP Community
Has value
Targeted traffic
Domain name
to
growth
Traffic has Pre-existing
value user
Gambling.com
Names
Have value gambling.com sells for $2.5M
Mobile /Social computing begins
sells for $20M
PC dominated world ends
1999 2002 2005 2008 2009 2010 2011 2012 2013 2014 Beyond
Directories Google Google as Twitter Mobile 10B apps 1930 46B apps Go Daddy IPO
Rises Ad platform Facebook & FB eclipses D/L from new D/L from
User Generated Google as Apple gTLD Apple
Content Most popular Apps
FB IPO
site…and Finally Relationships (think ads)
Web 1.0 Web 2.0 Web 3.0 Slower Growth
Brands use Mobile apps take
Domain off New gTLDs
Tasting facebook.com/brand
On ads increase supply of
& Adwords names
200M+ Large Brands Highest secondary market
Adopt & sale in 2014 is $3.6M Mi.com
Enforce IP Community
Has value
Targeted traffic Relationships
Domain name
to have value,
growth
Traffic has Pre-existing esp.
value user Gambling.com
Names if Trusted
Have value gambling.com sells for $2.5M & Frequent
Mobile /Social computing begins
sells for $20M
PC dominated world ends
1999 2002 2005 2008 2009 2010 2011 2012 2013 2014 Beyond
Directories Google Google as Twitter Mobile 10B apps 1930 46B apps Go Daddy IPO
Rises Ad platform Facebook & FB eclipses D/L from new D/L from
User Generated Google as Apple gTLD Apple
Content Most popular Apps
FB IPO
siteBut Domain Industry Business Models are Lagging Behind
Web 1.0 Web 2.0
200M+
Community
Has value
Domain name
growth
Traffic has
value
Names
Have value
Mobile /Social computing begins
PC dominated world ends
1999 2002 2005 2008 2009 2010 2011 2012 2013 2014 Beyond
Directories Google Google as Twitter Mobile 10B apps 1930 46B apps Go Daddy IPO
Rises Ad platform Facebook & FB eclipses D/L from new D/L from
User Generated Google as Apple gTLD Apple
Content Most popular Apps
FB IPO
siteWhile How We Interact & Communicate is Evolving
High
Web 1.0 Web 2.0 Web 3.0
One to Many Many to Many Relationships
Communication Interaction
Nodes: # of Contacts reached
have value,
esp.
If Trusted
Website & Frequent
to Joining Specific
Conversations
Hash tags
Mid Email Frequent
Conversations in a
smaller but trusted
circle
Low Mid High
Frequency of CommunicationMore Complex Interactions Mean…
•Massive growth of data online
• Uploaded, shareable and findable rich content (video, photos)
• Sensor data from lots of automated sources
• Massive amount of data to track (not just URLs)
• Transition to IPV6 makes massive data tracking possible
•Increased reliance on IP unique identifier of DNS pair
DNSNew Challenges: Trading off Privacy for Convenience
What is the tipping point?
Convenience Vs. Loss of Privacy
The Tipping Point
High
Convenience
Low
Low Loss of Privacy High
© 2014 Architelos and/or its affiliates. All rights reserved. 43…or Security © 2014 Architelos and/or its affiliates. All rights reserved. 44
Agenda
1. A New Era: the Mobile Computing Cycle
2. Evolving Web Business Models
3. How the Domain Industry Value Chain Is Changing
• What About Google?
4. Closing ThoughtsDomain Industry Value Chain
Contract Web Search Social Apps & Internet
Regulator DNS Registry Registrar
Holder Services Engine Media Platforms End User
Verisign Facebook
PIR Twitter
Apple
Minds & Machines / Uniregistry
Neustar / Afilias
Rightside/Demand Media 2.8B+ and
ICANN
growing
Amazon
Microsoft / Yahoo
Google
Open Charleston Charleston Gmail, Picasa Chrome
Public Road Road Google Google Google+
Google Docs etc Android
DNS Registry RegistryGoogle Registrar
• Google believes half of businesses don't have proper web
presence
– Registrar was the last missing link the value chain
– Ties various properties together (Google Docs, Picasa, Google +,
gTLDs, etc.)
– Has advantage of the world’s largest Billboard: google.com and
big data analytics
• Their Motivation? Sell more Adwords
• Intense competition in the Registrar Space?
– Maybe… but users are increasingly wary of privacy issues, and
Big BrotherAgenda
1. A New Era: the Mobile Computing Cycle
2. Evolving Web Business Models
3. How the Domain Industry Value Chain Is Changing
• What About Google?
4. Closing ThoughtsClosing Thoughts. Consider…
• Consumer Market is relatively uncontested
• Ex: 1B+ free web mail active accounts, despite increased dissatisfaction with
privacy and security
• Update your focus & business model to be in line with mega trends
• Specialize in a demographic or industry niche
• (ex: GoDaddy now focusing on solution packages for SMEs)
• Solution packages vs. domain inventory
• Tie in mobile (i.e. solutions for “Bricks & Clicks”)
• Data analytics
• Security and data validation
• Privacy
• Simplify: Customers want increasingly sophisticated solutions that are easier to
understand, buy and useThank you! Questions?
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