For those not in the know, the Internet Corporation for Assigned Names and Numbers (ICANN) has recently announced a new domain naming convention for domain name endings, also known as generic top-level domains (gTLDs). In the past, there were 22 gTLD endings including .com, .net, .gov and .org. But the new domain naming convention brings the .brand in the spotlight, and you soon may see gTLDs like .apple, .coke, .shoes, .justaboutanything – for a price, that is.
ICANN suggests the cost of registering these domains will exceed $185,000. Add to this a yearly fee of $25,000 to keep the branded domain active. So if that’s the case, who will pay the price, and what justifies the costs?
As ICANN will only launch about 500 new gTLDs in the first wave next year, with subsequent batched at a maximum of 400 each, the first applicants to be approved would probably be those with the biggest interest in dominating search for their brands: Coca Cola, Ford, General Electric, BP, Apple, Microsoft, Hilton and so on. Other potential applicants may include corporate marketers, investors, local municipalities, non-profits and NGOs, and their domains can be anything from .luxury to .private, .travel and more.
For now, let’s look at exclusive .brands. For business owners, the main advantage is branding, of course. But for search users, it’s a matter of reliability, credibility and source trustworthiness. You can bet that Google will place higher on its search results a domain like www.deals.hilton than something like www.obscure.com/hilton-deals/ – because no one else but Hilton can be the owner of a Hilton dot brand. A more generic new gTLD, like .travel may not be as strong, even if it does feature something like www.hilton-deals.travel. Even here, not many businesses, other than Hilton, may be able to register without some serious legal issues. But while the domain may, or may not belong to Hilton, a .hilton gTLD can only belong to the copyright and trademark owner. The .travel gTLD could belong to anyone with enough dough to register it and keep it up. The owner may then decide to sell domains, like www.france.travel and so on, at whatever price. There are countless business ops, as you can imagine.
Some SEO experts argue that the new gTLDs will not be as strong as traditional gTLDs, as these are older, stronger, and linked from so many pages. But for brands, new gTLDs will be stronger – it only makes sense. Google’s best interest is to serve reliable information in search, and the most relevant pages. So when a user searches for Hilton Worldwide hotel deals, it would only make sense to find the deals.hilton page first instead of a more obscure travel agent site. If this doesn’t happen the new ICANN naming initiative fails one of its purposes.
Those who cannot afford to pay $185,000 to register a new gTLD, then $25,000 annually to keep it up, cannot really compete with the stronger, richer companies. There are some solutions to recoup the initial costs, like that suggested by a Luxembourg-based intellectual property company, VAYTON Brand Capital. Net revenues generated by IP assets such as trademarks, domain names, patents, registered designs as well as copyright on software are granted up to an 80% tax exemption in the Grand Duchy of Luxembourg. But this solution is not available in other countries. So what would business owners do? Some might move to Luxembourg, or have a Luxembourg based business register their domain. Maybe other governments will take similar initiatives to help businesses in their countries protect their online real estate? Things get complicated, and only time will tell how many businesses will be ready to pay $185,000 for SEO advantage.