New Opportunities and New Worries in Online Branding
A huge expansion of Internet domain names presents brands with an opportunity to stake out space that had been out of reach. However, speculators and squatters are ready to pounce. Savvy brands are making plans and taking action.
The Domain Name Land Rush of 1999-2008
Look at any piece of real estate in the United States and you can be certain that someone owns it. That has not always been the case. The same can be said for Internet domain names. English has a limited alphabet – just 26 letters. Those 26 letters plus ten numbers define the available .com real estate, known as the “name space.” Of course, landlocked parcels on the side of a mountain have little value, and the best domain names are usually easy to remember and spell in English.
In the Internet’s early days, domain names were there for the taking. Some people just plain lucked into valuable domain names. In 1994 one of my clients wanted FirstInternetTechnologies.com, but it was already taken so he registered fit.com instead. A laundry company called Web Services, owned by a guy named William E. Bloomfield, registered his initials – web.com. Later I helped my client Interland buy it. I also helped my client D&B Credibility Corp., led by CSQ contributor Jeff Stibel, buy dandb.com from a Canadian speculator. CSQ is another example – though it already registered csqmag.com, I helped the magazine buy the domain name csq.com from a young guy who snatched it when the prior owner failed to pay the annual registration fee.
By 2006, every possible two and three letter .com domain name was taken, as were more than 80% of the four letter domain names. By 2010 nearly the entire .com useful “name space” was registered. Though .com was not the only place to put a website, it clearly was the most important. Today, getting a new .com registration is possible, but all the good names are already owned. Call them what you will—speculators, squatters, consolidators, resellers—these companies set pricing based upon market demand instead of the flat, low fees charged by official registrars.
“A huge expansion of Internet domain names presents brands with an opportunity to stake out space that had been out of reach. However, speculators and squatters are ready to pounce. Savvy brands are making plans and taking action.”
The New Land Rush
Businesses have struggled to find a suitable domain name. Entrepreneurs have tried to offer alternate generic top level domain names (gTLDs) to .com. But .co and .biz have had limited success. ICANN, the organization which manages the Internet name space, needed a solution. “We’ve gone from an average of four or five letters in a second-level domain to something in excess of 14 to find what you’re looking for,” said ICANN VP Cyrus Namazi. So, ICANN decided to open up a new class of gTLDs as a way of taking demand off of the .com name space. For an $185,000 application fee, plus proof of ability to run a domain name business, anybody could apply for a new gTLD.
Already ICANN has approved about 1,000 new gTLDs. Google applied for more than 100 gTLDs. Amazon applied for 76. A start-up called Donuts raised over $100 million and applied for more than 300 gTLDs. Plus, the English-centric Internet is about to become more cosmopolitan. Chinese characters? Yes. Arabic? Yes. This new name space has millions, and maybe billions, of newly available names. This is great news for companies creating new brands and those seeking to secure a decent domain name for an existing brand.
Critics see this as another land grab, with existing brands having to spend huge sums just to block squatters. Though I see the logic of expanding the name space, many of us who buy and sell domain names have seen prices fall over the last few years. There are three main downward pressures. First, people rarely type in full Internet addresses any more. Second, social networks and apps don’t use domain names (though similar name space issues arise there, too). Third, because of shorteners like bit.ly, people often don’t notice or care what web address they see.
ICANN’s Namazi describes the changes as a “time for us now to go from a two-lane highway that took us to this beautiful beachfront property to a multitude of roads that take us there. And our role at ICANN is to build those roads and give access to everyone to be able to use them.”
Action Items for This New Internet Land Rush
- The Marketing Department should review the list of new gTLDs at newgtlds.icann.org/en/program-status/delegated-strings and identify those that merit registration. Focus on the gTLDs that apply specifically to your market
- Consider also which gTLDs seem to be most popular, at namestat.org
- Register your trademark rights with the Trademark Clearinghouse to prevent squatting on your brands at trademark-clearinghouse.com
- Have your IP attorney register your important brands with the US Patent & Trademark Office, and in foreign countries where you have major markets