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The imminent roll out of more than a thousand new top-level domains has created a headache for small businesses seeking to protect their existing domains, as well as sparking a bidding war among the world’s tech giants for the most attractive TLDs.

The process is being handled by the Internet Corporation for Assigned Names and Numbers (ICANN) and will ultimately see the number of TLDs increase from 23 to 1,500 over the next few years.

Examples of new top-level domains include .london, .plumbing, .sexy and trademarks such as .google and .bbc.

A few of the new domains have already gone live, others are awaiting final authorisation, while some are still the subject of disputes over which applicant should be granted ownership.

If the disputes cannot be settled amicably then it will ultimately go to a bidding process where the TLD will be handed over to whoever stumps up the most cash. That’s likely to be an expensive purchase, especially considering the fact that the initial application process cost £185,000.

So what’s the point of the new domain names, other than to boost the coiffeurs of ICANN? Well according to the head of ICANN's generic domains division Akram Atallah, it’s all about consumer choice.

Speaking to Atallah this week I asked what exactly he meant by this, considering the fact that most people are presumably happy with the current set up.

“The TLD programme was born due to the need for competition and diversity within the domain name system and to provide choice for consumers,” he said.

The variety of domain names is scarce, so they are inevitably getting longer. Originally domains were five or six characters long, now they are frequently 16 or 17 characters long. There’s a lack of availability and memorable names.

Atallah certainly has a point in this instance as in the digital age company names are becoming ever more obscure due to the need to find a short, available domain name. 

But what of the impact on existing companies? Research has shown that businesses with .co.uk TLDs are almost universally against the roll out of a new .uk domain, however these objections were ignored during the consultation period.

Results of survey into attitudes towards new .uk domain

According to Atallah the expansion is not really about existing domain holders, it’s about emerging SMEs and internet users that will soon be coming online.

It’s not fair to say that only existing companies are able to have the good domains and everyone else should be locked out.

Atallah said that the new domains open up exciting opportunities for new businesses as they can develop a marketing strategy around their new name and domain.

The example he gave is of a fictional London pizza shop, which at the moment might be restricted on the domain name that it can opt for. However the new .london TLD opens up a far wider choice of domains, which makes it easier to come up with a marketing strategy.

Initially it was always lawyers registering domains, but now we are seeing more marketing folks taking a look at it. We believe this will become a trend and that people are beginning to look at the new domains as an asset and deciding how they will take advantage of it.

The new TLDs also cater to nations that don’t use the Latin language, in theory making the web more accessible.

Again, it is difficult to argue against that point, however it’s also easy to be cynical when taking into account the costs involved with the process and the additional administrative pressure placed on existing trademark holders.

Though there are systems in place to protect copyrights and trademarks so that brands don’t fall victim to cybersquatting, the onus is on businesses to make sure they claim their trademarked domains within each relevant TLD.

As Atallah points out, in practice it’s unlikely that brands will need to claim their domains in each of the 1,500 new TLDs. For example, Apple would presumably have no reason to want to claim ‘apple.bbc’ as it’s not really relevant to its industry.

However even if Apple still felt it was necessary to claim its trademark in half of the new TLDs, that’s still more than 500 new domains that have to be registered, paid for and renewed on an on-going basis, which is no easy task.

So despite the potential benefits for emerging SMEs, the new TLDs may prove to be something of an administrative headache and potential business risk for existing ecommerce sites.

David Moth

Published 4 December, 2013 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

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Comments (2)

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Col

Amazon has spent a whopping $14,060,000 on 76 gTLDs domain applications. View them here: http://bit.ly/1bIhEAr (76 applications at $185,000 per application)

over 2 years ago

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webmoghuls

The article is amazing. It is so interesting and crisp. Really loved it.

over 2 years ago

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