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Masters of Their Domains?

Companies soon may be able to create their own top-level domains — like ".ibm" — but the costs of making the switch are raising some eyebrows.
Vincent Ryan, CFO Magazine
February 1, 2009

To guard its brand, Verizon Communications built a gargantuan portfolio of 10,000 domain names (such as verizoncentral.com and many other permutations). Last summer, though, company executives began "thinking like cybersquatters," says Sarah Deutsch, associate general counsel for the company. It dropped some names, sold others, and renegotiated renewal fees for the keepers. The company has saved about $1 million to date even as it has unearthed valuable unused domains (verison.com, for example) that it uses to redirect hundreds of thousands of customers to its actual Website.

But that culling and rationalization could largely be for naught if a new proposal from the Internet Corporation for Assigned Names and Numbers (ICANN) is approved in the second half of 2009.

ICANN, the governing body that assigns domain names and IP addresses, wants to open up the market for generic top-level domains (TLDs) — the letters that follow the "dot" of any domain name — beyond the 21 that now exist (which include .com, .org, .biz, and .net). In the new scheme, pending final approval, a company could create its own TLD, such as .ibm. ICANN estimates the first round of registration could produce 500 new TLDs.

Calling it "the biggest change on the Internet in over a decade," Jon Nevett, vice president of policy at domain registrar Network Solutions, says the new TLDs "will lead to new Internet offerings and applications, and cutting-edge innovation." But some businesses, Verizon among them, fear they will be forced into the pricey proposition of registering new TLDs to protect their trademarks. Costs include $190,000 for the application fee, plus the financing of all the back-end technical operations that come with being an Internet registry. (By comparison, registering a new dot-com name today, assuming you can find one that hasn't been claimed, costs less than $20 per year.) The projected costs are high enough, in fact, that the U.S. Department of Commerce has sent a letter to ICANN criticizing the proposal.

Deutsch and others are hoping to work with ICANN to create simple remedies, even as they draw comfort from the idea that new TLDs could be a bust. "At the end of the day, '.com' is still the one that global businesses aspire to," says Peter Lamson, a senior vice president with NameMedia, which buys and sells domain names. CFOs can only hope it remains that way.


What's in a Name?
A lot of cash, for Internet addresses with the venerable ".com" domain name. Below, the 10 largest domain-name sales of 2008
Fund.com$10 million
DataRecovery.com$1.66 million
Invest.com$1.02 million
SkiResorts.com$850,000
Printer.com$800,000
iReport.com$750,000
Affiliate.com$580,000
FinancialAid.com$480,000
Tell.com$400,000
Systematic.com$400,000
Source: DN Journal



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