Web/E-business /

Move over, dot-com

ICANN readies new top-level domains; headaches seen for net managers.

By Carolyn Duffy Marsan
Network World, 11/06/00

Get ready for the next virtual land grab.

The nonprofit corporation that oversees the assignment of Internet names and addresses is poised to announce several new top-level domains to complement the popular .com and .net domains. The move is expected to prompt a frenzy of domain name registrations by corporations seeking to protect their company and product names from speculators.

The Internet Corporation for Assigned Names and Numbers (ICANN) plans to release on Wednesday its analysis of the 191 top-level domains that interested parties have proposed in recent weeks. The proposals range from open, general-purpose domains such as .web and .site to restricted, specialized domains such as .museum and .kids.

ICANN's board of directors is expected to choose several new top-level domains at a meeting in Los Angeles next week. If ICANN's negotiations go as planned, companies could buy names under the new top-level domains early next year.

The prospect of new top-level domains is daunting for corporate IT managers, many of whom are responsible for hundreds or thousands of names registered in .com, .net and foreign country codes. Now IT managers, along with their marketing and legal counterparts, may need to register many of the same business and brand names in the new top-level domains.

"The more domains there are, the more headaches I have," says Steven Hartman, chief trademark counsel with Nabisco, which owns 150 domain names, including oreo.com and candystand.com. Hartman spends more than $100,000 per year on an outside service to patrol the Web for misuse of Nabisco's trademarks and provide regular reports.

"With more domains, our costs are going to increase," Hartman says. "It just means greater costs to gather the reports, more time reading the reports and more litigation. It fills my day with aggravation. That's why I'd rather not see too many new domains."

Nonetheless, new domains are imminent.

Early last month, ICANN received 44 valid proposals from companies and consortia seeking to become registries of new top-level domains. Each proposal was accompanied by a $50,000 application fee.

ICANN's staff is reviewing the technical, business and financial strength of the proposals. Among the organizations submitting proposals are domain name registrars, trade associations, venture-funded start-ups and leading network companies, including Novell and Nokia.

Two high-tech heavyweights angling to get a piece of the domain name business are NeuStar and SRI International. A spinoff of Lockheed Martin, NeuStar manages telephone number assignments in North America and is involved in proposals for .biz, .web, .per, .geo, .travel and .kids. SRI International has proposed .geo and, through its Sarnoff subsidiary, .i.

VeriSign, which operates the registry for .com, .net and .org, is urging ICANN to maintain the stability of the Internet's domain name system while attracting new users with its choice of domains. VeriSign is involved in proposals for .biz, .home, .info, .site and .web.

"We think ICANN should move forward quickly with a few top-level domains," says Roger Cochetti, senior vice president and chief policy officer at VeriSign. "We don't have a specific number in mind . . . but obviously 200 new top-level domains would create instability."

ICANN observers expect somewhere between four and 12 new top-level domains to be chosen. Leading contenders for generic domains are .biz and .web. Most observers also expect ICANN to select a new top-level domain for personal Web spaces such .i or .per.

Segregating Web content for children and adults has a lot of support, with top-level domains such as .kids and .xxx being proposed by multiple companies. Many ICANN participants also favor creating some noncommercial domains such as .museum and .health.

For corporate IT managers, the biggest impact will be the creation of a new generic domain such as .biz that would compete directly against .com. If that happens, companies are expected to immediately purchase blocks of names in that domain to protect their trademarks.

"The first wave that you'll see will be people reregistering names that they have in .com, .net and .org," predicts Elliot Noss, president and CEO of Tucows, a Canadian registrar involved in proposals for .dir, .info., .site, .web, .tel and .kids. But Noss says the new top-level domains will be most beneficial for businesses whose preferred domain names are already owned by someone else in .com or .net.

"We're seeing many more businesses registering not just their companies' name but their product lines and subjects related to their products and specific promotions," Noss says. "It's those kinds of peripheral business activities that will most benefit from the expansion of the name space."

The registration activity is expected to be less frenetic for specialized domains because only the companies in those market segments will want to buy names.

"I'm less worried about .museum because if someone comes across one of our names in that domain, they're a little less likely to think that Nabisco is associated with the site," Hartman says. "But with a .web or .biz, yes, I'd be concerned."

Still, Hartman is not planning to buy all 150 of Nabisco's current names in a new generic domain like .web.

"You have to balance the cost against the benefit," Hartman says. "We'd probably buy Nabisco.web. . . . But there's no way to prevent someone that wants to abuse our name. They'll just buy Nabiscocompany.web."

Prices for names in the new top-level domains are expected to be slightly higher than current prices for .com, which wholesale for $6 and retail for $35 or less per year. Industry observers expect companies to spend from $50 to $100 per year for each name.

"For a company that wants to register all the permutations of its names . . . in a .web domain, you're maybe looking at an investment of $10,000 or $15,000 to get one hundred new names to build an umbrella around your corporate and brand names," predicts ICANN watcher Bret Fausett, a partner with Hancock, Rothert and Bundshoft in Los Angeles.

In addition to the registration fees, companies face the costs of managing a growing portfolio of domain names. That includes having IT staff keep domain name records up-to-date, handle renewals of hundreds of names coming due at different times, and propagating Domain Name System changes across all of these names.

"If I'm an IT person, I'm already overwhelmed. How do I manage this extra work? With a strategic partner," says Jeffrey Johnson, a vice president of Network Solutions who oversees the company's ID Names service, which offers domain name maintenance services for corporations that typically own 2,500 to 5,000 domain names.

Altogether, more than 30 million domain names have been registered, according to VeriSign. Of those, 24.2 million are in the .com, .net and .org domains. Another seven million to eight million names have been registered in the 356 available country code domains.