Marketers debate usefulness of ICANN's new domain names

Source: Tuesday, June 28th, 2011

ICANN, the Internet Corp. for Assigned Names and Numbers, announced plans to sell new domain names for about $185,000 apiece.

Why would anyone cough up that much when GoDaddy sells them for $9.99?

First, these aren't just any domain names and go well beyond .com, .net and .org. The new domain names, which are called generic top-level domains, or gTLDs, will allow a company to own what are being called .brand domains. Coca-Cola, for instance, could introduce a number of .coke domains; or a b2b marketer, such as DuPont, could claim the .dupont domain or a domain for Teflon or its other subbrands.

These new top-level domains will only be open to companies or organizations that go through a rigorous application process, which will begin Jan. 12. Those groups will also have to pay the $185,000 application fee.

"Today's decision will usher in a new Internet age," Peter Dengate Thrush, chairman of the ICANN board, said in a statement. "We have provided a platform for the next generation of creativity and inspiration."

Not everyone agrees. Esther Dyson, a digital entrepreneur and former chairwoman of ICANN, expressed doubts. She told National Public Radio: "I think it's kind of a useless market; and, if I had $185,000, I'd spend it on something else."

Forrester Research principal analyst Jeff Ernst has also encountered reluctance from b2b marketing executives regarding the new top-level domains. On his blog, Ernst wrote, "Many marketing leaders I've talked with look at this as a nuisance and are skeptical about whether Internet users will embrace [the new domain names]."

Ernst himself sees value in the domain names. "I'm very bullish on this whole thing," he said, adding: "The big brands are going to jump on it right away."

Although most marketers have declined to comment publicly about their intentions, a handful, including Canon Inc. and Hitachi have disclosed preliminary plans to use top-level domains; Canon will use .canon, and Hitatchi will use .hitachi.

Behind the scenes, other marketers are exploring their options. Melbourne IT Digital Brand Services, a domain name management company, said it has been in touch with about 200 global brands that are contemplating various strategies with .brand domain names. The company said about 35% of these companies are b2b marketers.

There are many ways that companies might use a .brand domain, including it for the company name or a subbrand. Melbourne IT Digital Brand Services said 92% of the companies it has spoken with intend to use the top-level domain for their main brand; about 9% plan to use it for a product brand.

Ernst said that a company selling through distributors might reserve the .brand domain for its channel partners. "A company like Cisco or Motorola, which have huge distribution, could lend authority and security to a reseller who uses a .cisco or .motorola brand," he said.

Industry trade groups might apply for generic domains such as .insurance. Kanchan Mhatre, exec VP-digital brand services at Melbourne, said it would provide an extra layer of security in financial services for instance, if an association owned .bank. It would imply that a financial institution went through a vetting process to get the .bank domain name.

Another reason that a company might want to employ a .brand strategy is because it didn't get the domain name it wanted in the 1990s, when those name were first assigned. Or a company simply might want to prevent a competitor from exploiting the domain name possibilities.

"One reason they would do it is as defense," Ben Crawford, CEO of CentralNIC, an Internet registry services firm.