Skyrocket

In my last post I discussed about how to best work towards attaining the right mix of money sites using management consultant’s BCG concept. Well this month we are dealing with a controversial ICANN policy that’s about to introduce new costs to your business. Internet on the brink of massive address explosion The landscape for  [ Read More ]
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In my last post I discussed about how to best work towards attaining the right mix of money sites using management consultant’s BCG concept. Well this month we are dealing with a controversial ICANN policy that’s about to introduce new costs to your business.

Internet on the brink of massive address explosion
The landscape for generic Top Level Domain Names is about to change for good or worse. If all goes according to plan, ICANN’s Executive Board meeting on 20th June 2011 in Singapore will approve the new gTLD Program. Afterwards the number of available domain names is set to sky rocket. And what many legitimate business owners have been fearing is about to happen. The right of the dot will become a matter of controversy if the new ICANN gTLD Program is approved.

New gTLDs Program
The new gTLDs are broken into 3 categories namely:

• .brand TLDs: .GOOGLE, .BING, .CNN etc
• Generic TLDs: .FINANCE, .WEB etc
• Community / Special interest TLDs: .BERLIN, .LONDON, .PARIS etc.

Meanwhile ICANN has just published the new gTLD applicant guidebook for the general public to read and apply. For those who are not aware, the new gTLD application window already ended on 20th April 2011 (around 400 applications were received). The document includes:

• introduction to the new gTLD application process
• evaluation procedures (questions and criteria)
• objection procedures (Wipo etc)
• string contention procedures
• transition to delegation (trademark clearing house, suspension)
• applications terms and conditions

It is a very nice piece of document for anyone who wants to inform themselves about how the internet is about to change for good or worse.

Opposition to new gTLDs
As I have expressed my opposition here that I am not a fan of the new gTLDs because they are only going to confuse internet users and consumers. There are enough available domain names for everyone to register under existing country code Top Level Domain Names (ccTLDs) and gTLDs. Although the process of estimating the exact impact of the new gTLDs is complicated, there is consensus that the cost of doing business online for businesses will significantly go up. ICANN and other supporters of the program have touted it as a unique opportunity to promote innovation, business competition and consumer choice. I disagree with such a proposition because very few people are involved in the ICANN decision making process. ICANN meetings are free for everyone to participate but the traveling costs involved forbid the public from attending. This leaves it open for registrars and ICANN itself to pass own policies meant to line their pockets with money. As a domain investor and web entrepreneur I am opposed to the new gTLD program for a number of reasons:

• the gTLDs will only increase costs for online business owners because they will have to fight for the same names they already own at highly inflated costs
  • $ 185k fee for successful applicants
• new gTLDs do not serve the public interest but rather those of a few individuals

Why new gTLDs will fail

• Prohibitively high registration costs and switching costs for website owners
  • transferring big sites from one domain to another is not a walk down the park
• Inadequate mechanisms to prevent fraud and protect IP rights
  • can you imagine every big brand out there will need to apply for its TLD in order to defensively defend itself
• Limited scope / counterproductive commercial application of such gTLDs – e.g. nobody needs .africa whereas other ccTLDs are not even widely used on most developing countries
• lack of a global understanding and awareness of new gTLD program

On a positive note, the new gTLDs might draw significant attention to our industry, attract many newbies who will think of it as a get rich quick scheme and burn their fingers in the procecess.

Conclusion
All in all, if you take some of the factors I have mentioned above into consideration, I do not think the world needs the new gTLD program. But it seems like big money interests might win this time round. The costs of approving a gTLDs program which increases the number of available domain names far outweigh the benefits.

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