As the digital age dawned, pioneers successfully snapped up broad swathes of easy to remember domain names, such as nouns, places and their combinations -- claiming valuable 'virtual real estate' under the top level domains such as dot-com and so on.
Now, the first research to try and define current demand for internet domain names suggests that the drying up of intuitive and familiar word combinations has seen domain registration drop far below the expected appetite, given the extent to which we now live online, with new entrepreneurs struggling to find their slice of virtual space.
The study estimates that the lack of available high quality domains featuring popular names, locations and things could be stifling as much as a further 25% of the total current registered domains.
With the total standing at around 294 million last year, this could mean over 73 million potential domains stymied due to an inability to register relevant word combinations likely to drive traffic for personal or professional purposes.
However, as the Internet Corporation for Assigned Names and Numbers (ICANN) has begun to roll out the option to issue brand new top-level domains for almost any word, whether it is dot-hotel or dot-books -- dubbed the 'not-coms' -- the research suggests there is substantial untapped demand that could fuel additional growth in the domain registrations.
"Cyberspace is no different from traditional cities, at least in economic terms. In a basic city model, you have a business district to which all residents commute, and property value is determined by proximity to that hub," said Thies Lindenthal from the University of Cambridge.
"A virtual commute is about the ease with which a domain name is remembered and the time it takes to type. The snappier and more recognisable a domain, the more it is going to be worth," Lindenthal said.
Since 2007, annual additions to the domain stock began to lag, while between 2006 and 2012 re-sale prices of domain names already registered rose 63% -- indicating a demand for virtual 'locations' outpacing the supply of available names, with competition driving up prices.
Looking at just dot-coms, Lindenthal compared existing registrations with census data for popular family names in US.
He found that more prevalent the family name, lower the number of domains featuring that name per head of population.
Moreover, a one per cent increase in a surname pushes up domains featuring that name by only 0.74% -- suggesting a gap between likely demand and current domain registration.
Lindenthal also explored domain registration featuring city names compared to size of the population, and found a similar gap between expected demand and current domains.
The study was published in the Journal of Real Estate Finance and Economics.
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