Goodbye .com and hello .yourbrand

The internet domain market is set to be liberalised at the beginning of next year, but new research suggests that two thirds of businesses are completely unprepared for the change.

The Internet Corporation for Assigned Names and Numbers (ICANN), the international body that oversees the structure of the internet, is liberalising the market for domain name extensions – the .com or .net part of a web address. This means that anyone, in theory, can apply to operate an extension. So alongside .com, .net, and .org, we will see .whateveryoulike.

Historically, companies have considered their domain to be a critical part of their brand identity. Some domains have been sold for millions of dollars – sex.com was reportedly sold for $14m – and multinational companies often register up to 20,000 different variations of their brand to try and stop opportunists exploiting it.

However, the vast majority of businesses are unprepared for imminent changes to the internet. At Gandi, we have been working with the Future Laboratory to assess the impact liberalisation will have – and we found that two thirds of the businesses we surveyed were not even aware it’s happening.

Once we explained what market liberalisation will mean, companies recognised the possibilities: 81 per cent said liberalisation will be innovative, three quarters said it will be advantageous, and two thirds said it will be exciting when launching a campaign online.

Ultimately, it will mean companies can readdress the way they communicate with customers, partners, or investors. We’ve already seen a shift in consumer behaviour where the high-street and virtual world have blended. The growth in blogging and social networking means people have shifted their identity online. The liberalisation of top level domain names will help to blend the two to create a personalised brand experience.

Toyota, for example, could register europe.toyota and usa.toyota, and set up sites for individual brands (highlander.toyota) and use targeted domains for different markets such as customers and suppliers (suppliers.toyota, dealers.toyota, buying.toyota). Or, Nike could create a personalised brand experience using yourname.nike, with training programmes, suggested products, networking pages which could link with sponsored athletes and so on.

Indicators suggest that consumers will embrace this change. As part of the same research, we interviewed 1,000 consumers and one in five (19 per cent) said an extension such as .nike or .microsoft would be memorable. Considering only 24 per cent think .com is memorable, this shows the future potential for branded top-level domains.

However, while liberalisation of domain names is exciting, there are concerns over regulation. Some companies, such as Microsoft, have called for a staged roll-out, rather than full liberalisation, to ensure potential problems can be dealt with.

For example, should .apple be given to Apple the company, or to an apple growing co-operative in Wisconsin? What about top level domain names which play on morality or religion? The Vatican has already registered its concern with ICANN that making .god available could lead to serious, and potentially violent, dispute.

At the moment, ICANN is still developing the processes for dealing with issues such as this. It recently created an Implementation Recommendation Team (IRT) to look at concerns expressed about trademark protection. The team’s proposals are currently out for public comment before being incorporated into the process for liberalisation.

Beyond trademark issues, there is also a real fear that cybersquatters will cash in on liberalisation by registering the best domain names to drive visitors to advertising sites. Criminals could use domain names that resemble trademarks in order to launch phishing attacks or to lure users to illicit sites.

ICANN is expected to start taking applications for new top-level domains between January and March 2010, and it anticipates between 300-500 to begin with. A number of groups have also already announced interest for city top-level domains such as .berlin, .paris, .london and .nyc.

Industry or activity-specific names are also expected to get attention, for example .music, .sport or .movie.

For us, this is an exciting change. But if liberalisation is to bring the benefits it promises, it needs to be handled carefully. The opportunities are diverse for different types of businesses, and so long as concerns are carefully managed, we think this is a major shift in the internet that companies cannot ignore.