Launch of the new TLDs: validity of the 50/50 law

June 2014

There is a well-known "law" among experts of the domain name market claiming that the number of domain names registered by the end of the 1st day of the public opening of a TLD amounts to 50% of the stock that the TLD will achieve by the end of its 1st month, and that the latter number will represent 50% of the stock at the end of the 1st year. To verify this, we performed a full-scale test.

 

As of June 1, 2014, 46 new TLDs had been open to the public for over a month and had a stock of more than 5,000 domain names (this threshold is arbitrary but limits large variations due to low volumes).

We analyzed their results, provided by ntldstats.com, to verify the 1st statement of the "law" and find out whether the stock obtained at the end of the 1st day of the public opening really represented 50% of the stock at the end of the 1st month.

The results are paradoxical

The graph below shows significant dispersion, and that the "law" only proves for a minority of the 46 TLDs studied:

Difference between achieved stock and theorical stock

  • To be precise, for 33% of the TLDs studied, the deviation between the actual stock and the target stock is in the range of [-10%; +10%], for 59%, it is in the range of [-20%; +20%], and for 93%, it is in the range of [-50%; +50%].
  • It can also be noted that the three TLDs that achieved exceptional results all exceeded their target goal by more than 50%. These are the .guru (+51%), .uno (+55%) and .holdings (+70%) TLDs. The .club TLD will probably join the top three TLDs once the first month of its public opening has been completed.
  • Conversely, seven "tail-end" TLDs appear to have seriously fallen off in relation to their target trajectory.
  • However, these marked contrasts hide another reality that proves that the "law" is not as flawed as one might believe. The mean deviation is -1.1%, and the median stands at -1.6%.
    It therefore seems that while the intuition of experts works on the whole, it can only be applied to a limited number of TLDs, as the error margin increases rapidly.

This empirical observation is probably not beneficial to marketing (and financial) executives, who need the most reliable forecasts possible. In this case, the "law" appears to be relatively pertinent up until the point when registries can follow the first daily results of their TLDs, and find out whether they are on the right or wrong side of the target trajectory...

A similar study will have to be conducted in one year's time in order to verify the second statement of the "law", claiming that the stock obtained within the first month of the public opening amounts to 50% of the stock determined at the end of the first year.

 

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