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June 29, 2008

.yournamehere: Changing the Face of the Internet

On  June 26, 2008 decisions were made in Paris that will profoundly change how the Internet looks in the future. For marketers, it opens up a whole new world of possibilities and challenges.

ICANN, the international body that regulates domain naming, announced their unanimous vote to open up restrictions on top level domains (TLDs). Starting in Q2 2009, it will be possible to apply to have just about anything as a TLD.

So what does that mean for you?

  • You are no longer restricted to the current 21 domain extensions like .com .net .org
  • Brand names can be used as extensions. Think of .coke .nike .ebay
  • You can more narrowly target geography. Imagine .london .nyc .hongkong
  • Be more specific with what you offer. Appearing soon .sport .news .sex
  • Extensions will not be restricted to 37 Roman characters. Watch out for  .العربية   .日本語 .Русский

Although cnet and others are reporting that the applications for new TLDs will cost $50,000 to $100,000, ICANN has said it will be “in the low six figure dollar amounts,” according to Dr Paul Twomey, President and CEO of the non-profit organization. The money raised will go to recouping the $20 million in costs for the proposals. “The costs of developing and implementing this policy will be borne by the applicants,” Twomey said.

With the cost of an application fee, it is unlikely that individuals will control new TLDs. What will prove interesting in the coming year is how the generic names will come to be acquired and who will control them. ICANN says there are already consortiums forming to seek control of city-based names. Who will own names like .sport?  Well, anyone who’s got the money and resources to seek it in an application. However, according to the BBC, ICANN has said that if their arbitration process fails the extension would go the “highest bidder” in an auction, which could create unprecedented bidding wars.

Heads up if you manage a major brand. Don’t think that you have any rights to your trademarked name as a TLD. ICANN has said that trademarks are not automatically protected. However,  there will be an “objection-based mechanism” to hear trademark owners’ complaints. This will open up a whole mess of trouble for some brands if other well-funded entities are able to acquire their name as a domain extension.

Some are saying this news is a non-starter, noting that recent additions to TLDs like .info .mobi and .biz have failed to catch on in mainstream usage, leaving .com to continue to dominate domain demands. VentureBeat reports that these changes may threaten the domain speculators the most if ICANN is sucessful in educating people and persuading them to use the new extensions. Speculators rely on the “type-in” traffic generated by people searching for generic terms ending in .com. This is how some domain names can be auctioned off for millions of dollars, as ReadWriteWeb reminds us how business.com fetched $350 million in that way.

With the addition of non-English characters, ICANN predicts an explosion in TLD applications from Asia, the Middle East, Eastern Europe and Russia. For global brands, this means yet another area of domain management that could represent millions of dollars in applications, arbitration, lawyer’s fees and potential auction bidding to secure names in strategic markets like China and India.

The question to marketers is, how much is too much to spend to protect your brand name on the Internet in other markets? At what point will the variety of naming possibilities become unmanageable for companies? It is easy to think in the short-term and be convinced that .com is the only term that carries clout. But, at this pivotal point in the evolution of the Internet, will global brands be willing to gamble their future on those three little letters?

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