New gTLDs require a business case

Recently, I’ve been deluged with client inquiries about the new gTLDs that ICANN finally approved last month. (That’s three years after they first accepted the gTLD stakeholder recommendation, and two years after they said they expected to start taking applications… which they now say they won’t do until January 2012.)

Tonight, I decided to write a research note, in hopes of persuading clients to read the note rather than trying to talk to me. I sat down at 5 pm to write it. I figured it’d be a quick little note. I finished at 3 am, with an hour break for dinner. It’s not a short note, and I’m not convinced that it’s really as complete as it should be, so it’s not done per se, and it still needs peer review…

I’ll throw out a couple of quick thoughts on this blog, though, and invite you to challenge my thinking:

  • If you’re going to get a gTLD, you should start with the business plan, driven by your business / marketing guys, not IT security guys nattering about defensive moves. Lots of organizations won’t be able to come up with reasonable business plans, especially given the cost.

  • A gTLD is valuable to a business with many affiliates or affinity sites. That includes companies that franchise or have agents, companies with partner networks, and companies that have big fan communities. It may also include companies that have a ton of unique names that need to be associated with a domain, for some reason, or which otherwise need a namespace to themselves.

  • Most companies won’t become .brand rather than brand.com; among other things, nobody knows what second-level domains are going to be logical, in many cases. Global companies currently operating under a mess of country-specific domains may usefully consolidate under a .brand, though.

  • Government entities are facing a ton of hype, especially from consultants selling gTLD-related services. But most governments won’t significantly benefit from a gTLD for their locale, and the benefits to residents of a geographic-name gTLD are pretty limited. (That doesn’t mean that you can’t make a successful business out of a geographic name, though; at the very least you’ll get the obligatory defensive registrations.)

  • Defensive registrations of gTLDs are relatively pointless. Nobody’s going to cybersquat for the kind of money that a gTLD costs to apply for and operate, and the dispute process is so expensive that people aren’t going to go spend money applying for a gTLD that’s likely to be contested on trademark grounds.

  • There will be some contention for generic terms, both by companies associated with those terms, trade associations, and registry businesses that want to operate general-public registries for those terms.

  • The proliferation of new gTLDs is going to multiply everyone’s defensive registration headaches for domain names. Many new gTLD registries will probably make most of their money off defensive registrations, and not active primary-use domains. This is very sad and creates negative value in the world.

I’m a fan of the digital brand management guys — companies like MarkMonitor, Melbourne IT, and NameProtect (Corporation Services Company, the “other CSC”), to name a few. I think they have a lot of specialized knowledge and I tend to recommend that clients who need in-depth thinking on this stuff use them. If you really want to dive into gTLD strategy, they’re the folks to go to. (Yes, I know there are tons of other little consultancies out there that now claim to specialize in gTLDs. I don’t trust any of them yet, and what my clients have told me about their interactions with various such shops hasn’t made me feel better about their trustworthiness. Beware of consultants who either try to scare you or make your eyes light up in dollar symbols.)

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Posted on July 23, 2011, in Marketing and tagged , . Bookmark the permalink. 1 Comment.

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