ICANN plots change to unlimited domain names

ICANN, an Internet regulatory body, is poised to shake up the world of branding and marketing by introducing online corporate identities.

The Internet Corporation for Assigned Names and Numbers, responsible for issuing domain names (Internet address suffixes like .com and .org) is holding discussions with stakeholders in the run up to the introduction of an unlimited domain names policy that will allow anyone to register an Internet address of their choice, provided it has not been taken up.

This will see, for example, the registration of addresses with suffixes like .cat, .food, and even personal names.

ICANN CEO Rod Beckstrom told Business Daily the plan is meant to boost Internet use and transparency, adding that the new domain names, also called gTLDS, have commercial implications just like the earlier versions like .com.

With growing Internet use around the world and especially in developing countries, businesses see it as a promising media on which new business models can be created and marketing promoted to supplement other arenas.

The e-commerce opportunities include online sales, advertising, subscription services, and brand building.

According to the latest statistics from Miniwatts Group, an Internet marketing research firm, the world has about 1.7 billion Internet users while Africa has 67 million, representing a growth rate of over 1,300 per cent since 2000 when the continent had only 4.5 million users.

Marketing analysts say the new domain names present mixed opportunities, depending on the scale of operations a company has.

“For small businesses and even individuals promoting their services, the domain names will offer a personal touch that can help in marketing,” said Maina Kirugo, a marketing consultant.

However, he said, the new addresses will at best muddy the waters for established corporations which will be better off sticking to the old domain names like .com which is usually associated with companies or government agencies.

“I would encourage companies to maintain their .com identities because venturing into the less popular and untested domain names could water down their brands,” he added.

Companies protested

When ICANN announced the move to roll out unrestricted addresses, companies around the world protested, saying it would fuel cybersquatting, forcing them to spend more to counter the vice.

Cybersquatting refers to registering a domain name with the intent to profit from the goodwill of a trade mark belonging to someone else.

The cybersquatter then offers to sell the domain to the person or company who owns a trademark at an inflated price.

Often, because the illegally registered domain names carry an important variant of the company’s name, the fraudsters end up being paid millions of dollars to reverse the “brand-jacking”.

According to the World Intellectual Property Organisation (WIPO), there were 2,156 reported cases of cybersquatting in 2006, representing an 18 per cent increase over 2006 and a 48 per cent increase over 2005.

Companies around the world have been registering one or all of their brands on the few domain names in a bid to fend off the fraudsters.

The businesses fear that a multiplicity of domain names will push them to register their brands and pay annual fees to rights holders of each of the new domains who pay ICANN a non-refundable deposit of $55,000 and $185,000 for evaluation.

But analysts say the fears are unfounded since the new domain names will lead to fragmentation that will not harm established businesses.

For instance, a company involved in sale of computer hardware is unlikely to be affected by registration of its name on a .food domain.

The fragmentation is likely to puncture the big business of re-selling domain names.

Some of the most expensive domain names have been sold from $2 upwards, riding on the back of their unique names that draw in massive traffic.

Sex.com which was sold for $14 million back in 2006 is set to be auctioned next week, with bids starting from $1 million.