In June of this year, the Internet Corporation for Assigned Names and Numbers (ICANN) voted to allow a new program for the creation of new generic top-level domains (gTLDs), the end section of a web address, like .com, .org, and .net. These new gTLDs will offer new opportunities for brand owners and other parties who register them, but at this point should not be too much of a concern for brand owners who choose not to apply for them.
Prior to this new program, the amount of TLDs was limited to just 22 in the US and country codes like .uk and .ca (and yes – .ly was intended for Lybia, although it has taken on a life of its own in the link shortening sphere via bit.ly). However starting in January of 2012, ICANN will begin accepting applications to apply for new gTLDs. During the first year of registration, ICANN plans to allow for the creation of 300 to 1,000 new gTLDs in 2012. The application fee comes in at the very serious figure of $185,000 with additional fees likely further along in the process.
Perhaps the most important aspect of being granted a new gTLD is that once a gTLD is created, the party who was granted it will own it and be responsible for administering domain names with that gTLD extension. For businesses, there are two important types of gTLDs that applicants might consider applying for. First are branded TLDs such as .apple or .hp and second are more general gTLDs like .bank or .car. Because of the high cost of registration and possible ways to use them, each type of new gTLD offers very different incentives and potential value for applicants.
The allure of a branded TLD should be fairly obvious. It would streamline web addresses and a branded TLD would lend a strong sense of gravitas to a brand, as only elite brands would have either the need or money to have their own TLD. Companies with strong consumer identification as forward-thinking, elite, or even luxurious, such as Apple or DKNY might be well-served with a branded TLD. For instance web addresses like as http://ipad.apple or http://menswear.dkny would make for nicely streamlined and brand-centric web addresses – much better than having the cumbersome .com attached to the address. However, consumers are undoubtedly comfortable with extensions like .com and with the high cost attached to obtaining a branded TLD, there is a real question of whether obtaining the TLD would be economically worth it. Likely, it will take one large company to obtain their branded TLD and pioneer the proper utilization of it.
Trademark and brand owners have expressed concerns about cybersquatters or other parties obtaining their marks, especially since there is no reservation process available for the new gTLDs. However, these mark owners will likely have little to actually worry about. First, unlike the very easy process for obtaining domain names, application process for the new gTLDs will be complex, take from 9-20 months, and take into account many variables including worldwide trademark statuses. Second, mark owners can object to filings, although it is likely that the objection process itself will have high costs associated with it. Third, while the high cost of registration will keep most brand owners from registering, that same high cost will likely deter most cybersquatters as the high cost and intense scrutiny will make it unlikely that cybersquatter will be able to obtain the branded TLD in the first place.
The other types of applications will be for non-branded TLDs like .bank or .law. The appeal of owning a TLD like this is that a party that owns the TLD then has full control of all domains within that TLD and can do whatever it chooses with them. A TLD owner could choose to sell domains at a high cost or block any other party from obtaining them. For instance, if Chase Bank obtained the .bank TLD, it could sell domains under it for a million dollars or be the only bank using the TLD. However, it remains to be seen how consumers will react to these TLDs and whether such approach will be worth the high cost of registration. Like the branded TLDs, the popularity and value of non-branded TLDs will likely depend on a visionary owner to show how to properly use and profit from these new types of TLDs.
For those interested in knowing what gTLDs are likely to be applied for in the coming year, dot-nxt.com is keeping a list of all the likely candidates and their corresponding sponsor. Just a few of interesting upcoming generic applicants include .bank, .app, .bike, and .dental. According to the same site, some of the upcoming branded applicants include .canon, .deloitte, .motorola, and .unicef.
Even for brand owners that do not plan on registering for their own gTLDs, it is advisable to keep a watchful eye for registrations that may infringe on domain or trademark rights. New gTLD applicants can be monitored by using services like dot-nxt.com, newtlds.tv, Valideus, or registries.tel. Additionally, brand owners should be prepared to submit comments, objections, and questions to ICANN should they become aware of possible infringing registrations. The possibilities of usage and optimization are wide-open and a prudent website or brand-owner should keep an eye on developments in this area as they occur as the best practice of wait-and-see may change.