Posts by: Marcus Glaad | (1) posts

What opportunities and risks come with the new Top Level Domains (TLDs)?

When ICANN (Internet Corporation for Assigned Names and Numbers) launched the new TLD Program, the purpose was to stimulate innovation and competition in the domain- and Internet industry and to give the possibility to own and run a top level domain.

ICANN received over 1900 applications for 1400 new top level domains. A total of 575 of them was from trademark holders applying to register their trademark as a suffix. Out of these, 77 applications used city names or other geographical connections. Another 107 applied for new suffixes under different, non-Latin, languages. A total of 561 generic words have, or will, become new top level domains.

Up until today, 583 of these new top level domains have been activated and are now in a phase referred to as ‘General Availability’. A total of 27,593, 028 names have been registered.

In a world where digitisation is constantly accelerating, these new endings provide both opportunities and potential risks. By using a classic SWOT-analysis, we can point out the pros and cons.

Strengths
A strength is to offer accessibility and a communicatively strong name.

Today you can’t find any available two to five letter combinations under .com and we are running out of six letter combinations as well. The prices for short, one-word .com domains in the aftermarket are increasing. It makes sense to consider travel.agency instead of travelagency.com when the price tag is $3’000 as opposed to $300’000.

The fastest growing Internet markets are not in the west. Some of the new domain extensions offer people the option to use their native language. According to www.nTLDstats.com 42% of all registrations of new domain extensions are made in China. Only 10% come from the U.S. Being able to communicate and trading online using non-Latin keyboard will become increasingly common as the Internet usage is increasing around the world.

Weaknesses
The general awareness is still low, which is a weakness.

We are still in the early stages of new domain extensions and no one knows which role they will end up playing in the domain name eco system. They are late comers to a well-established market where the .com still is king and the first choice for any company looking globally. We don’t know if the new domain extensions will be able to compete on the same level with .com in the future. Next generation will not only know the answer, they will create it.

Opportunities
Shorter is better when it comes to domain names and the new domain extensions index as good as .com with Google.

A clear trend in the aftermarket is that with more opportunities and greater accessibility the market looks for shorter names under the new extensions and the value for long, i.e. three words .com domain names is decreasing. It is already proven that new TLDs are indexed just as well as the older top level domains such as .com and .net. Therefore, it is also natural that the shorter and more descriptive domain names are more attractive than long and complicated multi-word domains.

In the 90’s and early 00’s, some people still questioned whether it was economically viable to register keyword domain names under .com due to the uncertainty of usage.  Today we know better and with the knowledge of how Google index the new domain extensions, and the fact that Google themselves have applied for 101 top level domains, makes them a good complement to the current domain portfolio.

Threats
Trademark infringements and fraud/phishing attacks are considered threats.

Although trademark infringements in the domain name industry is not a new issue, domain names are to be considered and handled as very important intellectual properties due to the risk of infringements.

As with the .com, and other established domain extensions, we see typo registrations and/or direct infringements of trademarks used in attempted fraud and phishing attacks.

The problem is not under any specific extension. However, the people behind the attacks use the extensions in the same way in which they are intended to be used. This means that we see more economic related fraud and phishing attacks from finance related extensions and more security breach attempts from support/tech extensions.

ICANN has tried to be proactive around these issues by establishing Trademark Clearing House for trademark holders and complemented the UDRP (Uniform Domain Name Resolution Policy) with a ‘Fast Track’ called URS. It is still an issue which can, and should, be monetised.

In summary, the new domain extensions provide excellent opportunities to improve and develop the digital marketing and digital presence of businesses, but it also requires proactivity and action.

Marcus Glaad, Dotkeeper AB