Today sees one of the biggest changes to the internet for businesses since its inception. Anyone will now be able to look beyond the generic .com and register their own web address extension for US$185,000 (£120,000), plus an annual fee of US$25,000.
The Internet Corporation for Assigned Names and Numbers (ICANN), voted to lift the restrictions on Generic Top Level Domain Names (gTLDs) from the current limit of 22 on June 20 last year. The new system will also allow not-Latin based alphabets, such as Cyrillic and Japanese type.
ICANN begins accepting applications for these new gTLDs today, but they will not come into effect until January 1st 2013.
This limited period for applications lasts just 91 days and ends on 12 April 2012. Before submitting applications, however, businesses will need to respond to a set of 50 questions, 22 of which are highly technical, to qualify to own a dot brand extension.
Roland LaPlante CMO of Internet Infrastructure services company Afilias believes the key advantage it gives companies is a global footprint.
"Dot Brands allow companies to expand their global footprint, giving companies more control over their brand presence and enhancing customer loyalty online, something that is particularly relevant within today’s tough economic climate," he said.
It should also help make the internet more secure. Less web savvy users will no longer be tripped up by cyber squatters hoarding website names similar to the big brands – i.e. hsbc.org rather than hsbc.com. Under the new system, HSBC could now choose to be www.hsbc.bank, or even www.loans.hsbc, so customers know they’re definitely in the right place.
"It also offers enhanced security for industries plagued by counterfeiting on the Internet. Just as brands are trusted by consumers in the physical world, a dot Brand can extend this concept to a trusted space on the Internet, while delivering customers a more secure route to purchase online," La Plante said.
As a negative example, Christian groups in the US were outraged when ICANN voted to allow the .xxx extension for adult sites, which came into effect last year.Supporters claimed it kept all the dodgy sites under one safe umbrella, while critics felt it gave them more visibility.
Some big companies have come out against ICANNs move; Pepsi and IKEA in particular have announced that they will not pursue .pepsi or .ikea gTLDs. Expense is an issue; businesses may need to budget in the tens of millions of dollars over the first five years, as all marketing materials down to each single business card, all advertising, all websites, and all servers would need to be changed.
IP lawyer and Partner at Taylor Wessing Jason Rawkins agrees that the situation is a tough one.
"No one really knows how the new top-level domain name programme will pan out. Some companies may sit back and wait to see whether their competitors get their own generic top level domain (gTLD) and how the new landscape develops. But this does create a risk of being left behind since realistically the opportunity will probably not come around again for about five years," he said.
ICANN has said it has an objection mechanism in place for extension holders. For example, if Gucci applies for and ICANN approves a ".gucci" top level domain, it can then object to any other similar extensions applied for later. This does put the incentive on bigger companies reliant on branding to get in early.
"The implications of the programme are double-edged for business. On the one hand, with a myriad of new gTLDs coming into play, it will mean a lot more for companies to police in terms of cyber squatting. On the other, there is a ready-made solution for big companies: if Gucci, for example, own and control .gucci, then they can educate the public that "If it’s not .gucci, then it’s not Gucci", and over time the need to police other domain names effectively disappears," said Rawkins.
Another variable will be search engines such as Google and Bing, and how quickly they assimilate the new extensions – and where search results end up.
"There is a risk of a time lag, with websites under a new gTLD not featuring as high up the search results as they should do. This would be a major problem for companies which have spent a lot of money acquiring their own gTLD," said Rawkins.
Open gTLDs such as .london could also be very profitable for the owner. London Mayor Boris Johnston has already announced that his office will be bidding for the extension. Companies such as Starbucks or tourist entities can then pay a fee to use ‘www.starbucks.london’ for example. Rawkins says that there are already large investment funds setting up to acquire large portfolios of gTLDs.
This will also be problematic if there are multiple applications for the same gTLD, which triggers a potentially costly auction process.
Rawkins also believes that ICANN is woefully underprepared for the volume of work heading its way.
"Most people expect that the number of new gTLDs applied for will greatly exceed ICANN’s estimate of 500-1000. This is likely to lead to significant delays because ICANN is almost certainly not going to be able to process a much higher number as quickly as it has indicated," Rawkins said.
