A Las Vegas company is betting that its purchase of the industry-specific domain “.storage” will pay off in coming years, ideally with thousands of firms and people buying the effective right to use the suffix for their web addresses and general Internet purposes.

XYZ.com LLC, a domain registry operator based in Las Vegas, bought the so-called “top level domain” (TDL) suffix “.storage” earlier this year from Extra Space Storage Inc., the Salt Lake City real estate investment trust. A TDL is the code suffix at the end of Internet addresses, such as “.com” or “.net” or “.edu.”

Last week, XYZ began effectively selling the right to use “.storage” to firms with trademark names, words or initials that they want stick in front of the “.storage” domain suffix.

Shayan Rostam, director of the “.storage” domain registry business at XYZ, said 700 entities have already registered to use “.storage” and XYZ is hoping to sign up “thousands” over the next 12 months. Within a few years, the goal is to then double that registry count, he said.

“We envision a lot being sold,” said Rostam. “This (.storage) is a valuable asset.”

The .storage domain extension isn’t just for self-storage operators, as XYZ is also marketing registration to digital data storage companies as well.

Extra Space gets out of the domain name business

An official from Extra Space Storage could not be reached for comment on why it sold its effective ownership of “.storage,” which it recently purchased via ICANN, the unofficial overseer of domains on the Internet. In recent years, ICANN has moved to make more domain suffixes available, due to a shortage of available web addresses tied to the “.com” suffix.

In an interview with the SpareFoot Storage Beat last year, an Extra Space executive made clear the firm wasn’t sure what it might do with its ownership right to “.storage” – whether to sell domain addresses to other companies or keep the “.storage” domain exclusively to itself to optimize search-engine hits.

Intriguingly, Extra Space also said last year that an easy option was to simply sell “.storage” to another company – and that’s exactly what it ultimately did, says XYZ’s Rostam.

A digital land rush?

Rostam would only say that his firm purchased the “.storage” TDL for “much more” than the $185,000 fee that Extra Space originally paid to ICANN. Indeed, he said the purchase was in the “millions of dollars,” though that six-figure boast could not be verified

XYZ is a big believer that, in coming years, more and more firms and entities will opt to use TLDs, also commonly known as “domain extensions” and “domain endings.” The reason: It’s sometimes so hard, and expensive, to find and buy domain prefixes tied to “.com.”

In fact, XYZ owns a number of TLDs, including “.cars” and “.auto” and “.theater” and “.xyz,” among others, in addition to “.storage,” Rostam said.

Rostam emphasized his company is not a web hosting firm or retail seller of domain names. The company sells rights to use “.storage” through retail domain registrars such as GoDaddy.com and others, he said. “We’re the wholesalers,” said Rostam.

What does the future hold?

While Rostam said XYZ is gung-ho about the future of TLDs, Roger Kay, president of Endpoint Technologies Associates in Wayland, MA, said he remains skeptical of the trend – and whether a company like XYZ will make a lot of money off of TLDs.

The reason is that there’s theoretically an almost infinite number of new domain suffixes out there to be purchased – and he questions whether demand will ever be great enough to warrant high prices for use of many of those suffixes.

By contrast, there’s still strong demand by companies to use the “.com” suffix – with now only a limited supply of available prefix names, words and initials to go with “.com.” In other words, strong suffix demand and tight prefix supply are leading to high prices for “.com” addresses.

Kay acknowledged there was a “kind of land rush” when ICANN first started selling off new domain suffixes, such as Apple Inc. buying “.apple” or Extra Space buying “.storage.” But much of that activity was pre-emptive or speculative moves by buyers to protect trademark turf, not necessarily an indicator that TLDs would become widely and wildly popular, he said.

Kay said he would be “super surprised” if many new TLDs take off.

Jay Fitzgerald