New gTLD Failures and Lessons Learned

## The Base Rate of Failure More than 1,200 new gTLDs were delegated through ICANN's New gTLD Program. By any honest assessment, the majority have not achieved commercial viability. Understanding why illuminates both the structural challenges of building a TLD business and the practical risks facing domain buyers. "Failure" in the new gTLD context takes several forms: a registry may still operate while accumulating only a few thousand registrations (insufficient to cover operating costs); registrations may be dominated by defensive and speculative holdings rather than genuine use; or a registry may be sold, shut down, or transferred to another operator. In the most severe cases, ICANN has terminated Registry Agreements and revoked delegation. ## The Contention Auction Problem ICANN's contention resolution process for strings with multiple applicants often used auctions. This created a perverse incentive: winning bidders paid more than the extension's rational present value, betting heavily on future adoption that frequently never materialized. Some extensions sold at auction for $10–25 million. At those acquisition costs, the registry needed to sustain hundreds of thousands of paid registrations at typical wholesale prices just to break even on the acquisition cost alone, before counting operational expenses. Many such extensions launched with pricing that reflected this debt — and high prices killed demand before critical mass could form. The lesson for the 2026 round: applicant cost structures need to be grounded in realistic demand projections, not auction euphoria. ## Pricing Miscalculations .web was one of the most anticipated new gTLDs — a generic word with obvious applicability. The string went through a protracted legal dispute over application precedence. By the time .web launched, it carried premium pricing reflecting years of carrying costs and legal fees. That pricing deterred the registrations needed to establish the extension as a credible alternative. Contrast this with how .app succeeded partly because Google priced it accessibly despite having paid $25 million. Google could absorb the acquisition cost as marketing spend. Independent registry operators cannot. Many new gTLD operators launched with tiered pricing structures where common words cost hundreds or thousands of dollars as premium registrations. These premium tiers generated revenue from early buyers but constrained the mass-market adoption that creates an extension's network value. ## Poor Community Fit Several new gTLDs were built on the assumption that professional communities would adopt an extension reflecting their industry. .law, .lawyer, .attorney, .legal all launched with the expectation that the legal profession would migrate to industry-specific domains. The legal profession did not cooperate. Established firms had built brand equity in .com. Clients searched by name, not by extension. The cost of migration — updating business cards, letterhead, email signatures, advertising — exceeded any perceived benefit. Similar dynamics played out in .dentist, .doctor, .accountant, and dozens of professional category extensions. The failure pattern is consistent: communities with established naming conventions have high switching costs and low motivation to change. A new TLD must offer a clear, immediate benefit to overcome inertia. ## Geographic TLD Disappointments While .nyc succeeded, most geographic TLDs struggled. .paris, .berlin, .london, .tokyo, .miami, and similar extensions faced structural problems. Local businesses already had established domains. Local governments promoted the extensions inconsistently. Residency and connection requirements made registration cumbersome for non-locals. And critically: search engines do not give geographic TLDs preferential ranking for local searches — a common misconception that drove some buyers to expect SEO benefits that never materialized. .paris is perhaps the most studied geographic TLD failure. Despite substantial promotional investment by the City of Paris and the French government, adoption remained far below projections. Parisian businesses saw no compelling reason to abandon .fr or .com. ## Registry Collapses and ICANN Intervention The most severe failures involved registry operators who were unable to sustain operations. When a registry operator fails, the consequences for domain holders can be severe: services degrade, WHOIS becomes unreliable, and ultimately the extension may be revoked or transferred. ICANN has provisions in the Registry Agreement requiring operators to maintain escrow of registration data so domains can be transitioned to a successor operator. This backstop protects registrants from complete loss of their domain assets, but transitions are disruptive and uncertain. The practical advice for domain buyers: avoid registering primary business domains under new gTLDs operated by financially fragile registries. Use TLD Finder to research operator backgrounds before committing to an extension. Extensions backed by major technology companies (Google's .app, .dev) or major registry operators (Verisign, Donuts/Identity Digital, Radix, Neustar) carry lower operational risk. ## What the Failures Tell Us The new gTLD program's failures are not evidence that the program was wrongheaded. They are evidence that building a two-sided market from scratch is extraordinarily difficult. A TLD gains value as more people use it, but people only use it if it has value — a classic cold start problem. The extensions that escaped this trap did so through institutional backing, existing community adoption, strong differentiation, or some combination. See New gTLD Success Stories for the patterns that worked, and How gTLD Registries Operate for how registry businesses are structured.