New top level domains won’t change things for most businesses
Last week the proposal to allow a new breed of internet domains triggered talk of another “internet gold rush”. I’m not sure this is going to happen, however it is a timely reminder of the importance of protecting your own business name.
The Global Top Level Domains (gLTDs) are the suffixes such as .com and .net at the end of internet addresses. There are 22 of these and they are controlled by the Internet Corporation for Assigned Names and Numbers (ICANN) which is chaired by an Australian, Dr Paul Twomey.
ICANN has proposed to make new gLTDs available to anyone who makes a suitable application. So somebody can apply to create a .smartcompany or .australia domain to replace the boring old .com or .com.au.
I have to admit my first reaction was “this was just a revenue grab” by ICANN but Twomey, in an interview on ABC Local Radio last Friday morning, stated the expected “low six figure sum” for registering a gTLD will only recover ICANN’s costs.
Those costs are going to be substantial as the ICANN announcement indicates there is going to be quite a rigorous evaluation before any are approved.
The cost and evaluation process means we won’t get a repeat of the mess we have seen in spaces like the .com domain where the low cost and ease of obtaining an address has meant many opportunistic registrations.
Because of this, I doubt there will be a “gold rush” as the barriers for entry are too high. The business model of registering hundreds or thousands of potentially valuable names in the hope someone will offer big dollars for a few of them doesn’t work when each registration costs over a hundred thousand dollars.
I also suspect the branding aspect is overplayed. The cost and time of buying, setting up and establishing the new top level domains will put even some of the bigger brands off unless there’s a compelling business case for doing so. Many will simply defend their brands through the disputes system.
In his interview on ABC Radio, Twomey indicated this will probably be a similar process to the existing domain dispute mechanism – which only makes the risks for cybersquatters even greater.
At the moment, it’s cheap to register a name but expensive to dispute it. This works to the cybersquatters’ advantage as most business owners will pay $10,000 to buy the domain rather than $25,000 in legal costs to dispute the ownership.
Under the ICANN proposal, the legal costs will still be high, but not as high as the cost of registration. This means speculating on global Top Level Domains becomes a very risky proposition and probably beyond the resources of most speculators.
Another aspect working against a gold rush are the popularity of the current suffixes. Of the 21 existing gTLDs most haven’t worked; when was the last time you saw a .coop, .pro or .jobs internet address?
If you did see one of these addresses, did you automatically type .com or .com.au the first time you tried to use it?
This is the big problem for any new domain; internet users are already conditioned to identify .com, .com.au and similar suffixes as internet addresses. So any new domain owner is going to have to spend a lot of money and time convincing the community to use the new address.
Long time Crikey subscribers will remember Stephen Mayne’s struggle to remind radio interviewers to include the .au at the end of the Crikey web address. All too often it was back announced as crikey.com which sent potential subscribers to the personal website of a Seattle based British expat.
To overcome this confusion I suspect brands that do grab their own gTLD will also retain the equivalent .com addresses and point those to their new domains. So for instance were Gucci to obtain the .gucci domain they would arrange that when customers type in gucci.com it automatically resolves to the .gucci address.
Where I think the new names will be successful is in large corporations where it’s relatively easy for the system administrators to setup the entire company’s computer network to use the domain.
For instance Telstra would get the .telstra domain then have internal addresses like sales.mobiles.telstra or servicecentre.ballarat.telstra. These addresses could be exposed to the wider public internet when necessary.
Most businesses though will find these domains have limited effect. It may be that buying a new address on a domain like .shop or .sunshinecoast will be worthwhile, but registering your own global Top Level Domain is overkill and beyond the means for all but the biggest corporations.
Where business may be affected by this is with trademark infringements. So this is another reminder to protect your enterprise’s most import asset; its name.
For the moment, it’s not worth worrying about the new names, especially given they won’t be around until at least the end of 2009. In the meantime, stick with your existing internet addresses and make sure you are protecting your brand names.
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