Would You Buy a Domain on a New TLD

If you purchase a new TLD (top-level domain) from ICANN, you have the potential to make a lot of money. You also have the potential to lose a lot of money.

Speaking of fees, if you want one of the new domain suffixes and are not a wealthy individual or company, get ready to put a major dent in your bank balance. The Icann application alone will be $185,000, with an annual fee of $25,000. Who sets this fee? Why, Icann, of course. Is it reasonable? Icann says it is. Why is it reasonable? Because Icann says, based on evidence that is less than persuasive, that it needs the money for things like legal costs.

So if you're not able to buy example.com, would you buy example.example? Domain owners have on occasion experienced difficulties when existing registrars have gone out of business, but they've largely been able to get past the problem by virtue of the fact that the TLD's are not owned by the registrar. If you pay somebody $6 for your example.example domain, though, and they decide they're not making enough money to justify the continued registration of the TLD, your domain name vanishes - and even if it's worth it to you to try to acquire the TLD I'm expecting that ICANN wouldn't only want you to increase your annual registration cost by $25,000 to keep your domain going, it would want a new application fee - and would reserve the right to reject your application.

Particularly during the early years of the Internet there were a number of efforts to create alternatives to domain names, usually by allowing people to buy keywords and key phrases that would cause people using the sponsor's service, or perhaps a browser plugin, to navigate to the registrant's (ostensibly relevant) website. None ever acquired the volume of users necessary to succeed.

A partial bypass already exists for end users. It's called Google – though this also applies to Bing and other search engines. Internet users are learning that it's easier, almost always with better results, to type the name of the enterprise they're searching for into the browser's search bar than to guess at a domain name and type that guess into the address bar. Google isn't the DNS, but its method suggests new approaches. To that end, some technologists have suggested creating a DNS overlay, operated in a peer-to-peer way that incorporates modern search techniques and other tools. Making this workable and secure would be far from trivial, but it's worth the effort

If you can come up with a viable, superior alternative to the URL and get a sufficient volume of users to adopt to your system, you will become very rich.

Using ICANN's New Domains to Take on Facebook

Commenting on the new ICANN rules, Nina Gregory comments,¹

What that means is that big brands see big opportunities. He gives an example of what a company like Canon could do. It could acquire dot-Canon, and even the generic dot-camera, and could create photo-sharing Web sites grouped within those domains.

"So not only is Canon now going to be dot-Canon," he says, "but Canon can now issue secondary domains to every one of its camera owners, and what they might very well do is embed a chip in their cameras that link that camera owner to their ID so that as they're taking photos they could just be automatically uploading photos to a photo-sharing site. I mean, that's just one possibility."

I'm inspired. I'm going to obtain a top level domain and create a competitor for Facebook. What do you think - does .pod work, or does the concept of "pod people" need too much explaining. Perhaps .borg?
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1. The article highlights a great quote:

"If I had $185,000, I'd spend it on something else."

- Esther Dyson, former chair, ICANN

A Domain Name Free-For-All

With ICANN announcing that, with the cost of application starting at a mere $185,000.00, you can purchase your own top-level domain (TLD), we will soon experience a dizzying array of alternatives to the traditional TLD's (principally .com, .net, .org, .gov, .edu, .mil, and country domain names). I heard an ICANN representative declaring that soon we'll have .pizza and .movie TLD's, and I suspect he's correct, but... to what end? For example, will a single pizza company acquire the .pizza TLD, or will a third party acquire it and try to convince all of the world's pizza shops that listing their store as .pizza is a business necessity? Companies that presently attempt to manage trademark and reputation issues by purchasing domain names on the most common TLD's will... realistically speaking, have to throw up their hands in despair.

ICANN is promising to police new TLD's for name confusion, and promises also to try to keep past domain squatters and typosquatters from obtaining TLD's. Beyond obvious typos, good luck with that. If I want a TLD for nefarious purposes and fear that ICANN is going to deny my application due to my identity, I'll obtain it through a proxy. Some TLD's will be worth millions from day one - abuse is inevitable.

I do suspect that the new rules will have an impact on domainers who sit on single or double keyword domain names, as I expect that the changes will accelerate the use of "OneBox"-style navigation on browsers. Unless you type in an exact domain name the text you enter will be treated as a search instead of defaulting to (keywords . com) as was once the case. But beyond that, I expect that it will improve the value of established sites on .com domain names - because with few exceptions I think that a proliferation of TLD's will serve primarily to confuse consumers and that, just as they did when .com, .net, .org, .info and the like became competitors to .com, they'll either default toward .com or defer to a search engine. (When was the last time you intentionally browsed to, or even notices that you were using, a ".info" domain? How about ".aero"? Did you even know those TLD's exist?)

Why, you ask, wouldn't it make sense for people to type in a new TLD associated with a particular business or profession? Let's say a new ".law" TLD is created - why wouldn't people looking for lawyers or legal information gravitate to that TLD? Well, what if there's also ".legal", ".lawyer", ".attorney", ".lex", ".atty", ".lawhelp", ".lawinfo", etc.? What if the owner of .law charges an exorbitant rate for registrations, to recover the six to seven figures invested in acquiring that TLD? (Similarly, I'm not sure if ICANN's rules would deem ".car" and ".cars" too similar, but what about ".auto", ".vehicle," ".suv", ".truck", ".automobile", ".wheels", ".motorcar", etc. - the "non-confusing" variations quickly become overwhelming.)

The biggest winners here, I suspect, will be ICANN and the search engines. ICANN will take in millions in fees to review applications, and each approval will make ordinary people more dependent upon search engines to guide them to valuable online information. Second, unless the OneBox solutions are implemented across the major browsers, typosquatters will likely fare well. Third, people who have not been able to get memorable domain names should be able to obtain better names, but subject to TLD confusion - they will get better domains, but may lose some traffic to the ".com" variation. (Sites that used TLD's in a clever way, such as del.icio.us, still typically found it beneficial to acquire the .com variant once funds were available to do so.)

The biggest losers, I expect, will be people who have been sitting on "high value" domain names without developing them, in anticipation that their value will only rise with time. People who rely upon generic keyword traffic based upon their domain name as opposed to their site content will likely see that traffic siphoned away by an increased number of low-content sites competing for the same keywords. And the average person hoping to make some sense of the web behind, "if the business I'm looking for is truly important it probably owns the .com".