Generic top-level domain expansion brings new opportunities, risks for business owners.

AuthorStein, Mark E.

The introduction of new generic top-level domains (gTLDs) will fundamentally change the Internet name space and the competition between brands for meaningful, appealing Web addresses. Dozens of new gTLDs have already been delegated with potentially hundreds more to come. These can include everything from .bar to .jewelry. While the expansion promises new opportunities to communicate and interact with consumers, it also creates greater risk of fraud, abuse, and potential new legal complications for businesses.

A top-level domain (TLD) name is the suffix that follows the last period in a web address, such as .com, .gov, .edu, and so forth. Several TLDs have specific distinctions, such as those that are attached to a country code (.uk) or industry (.xxx). Generic top-level domains, however, include unrestricted domain suffixes like .com, .net, .org, and .info. Anyone can purchase a lower-level domain name and register a website ending with one of these gTLD names, provided the address is available. Websites with suffixes like .biz, .pro, and .xxx are considered generic, but have certain eligibility restrictions, as do sponsored TLD names like .edu, .gov, and .mil, which are assigned solely to designated agencies or organizations.

By the end of 2011, only 22 gTLDs existed. (1) In January 2012, however, the Internet Corporation for Assigned Names and Numbers (ICANN) began accepting new gTLD applications --for a price of $185,000 each. (2) By the time ICANN stopped accepting submissions in May 2012, despite the steep price, it had received over 1,930 applications. (3) Among the applicants are established brands like Google, Amazon, and Microsoft, as well as newcomers and TLD holding companies like Donuts, Inc. On October 23, 2013, ICANN began delegating approved gTLDs on a piecemeal basis, placing them into the Internet's Root Zone--the database for the Internet. (4) Experts predict that as many as 1,400 of these applications could be approved. To date, 430 gTLDs have been delegated, including .zone, .cheap, .marketing, .democrat, .social, .dance, .farm, .glass, .email, and more. (5) However, almost 1,200 applications remain to be delegated. (6)

The introduction of new gTLDs presents a number of benefits for gTLD applicants. Applicants for new gTLDs are not merely applying to purchase a domain name, such as in the case of purchasing a lower-level domain name. Rather, applicants are actually applying to create and operate a registry for the new gTLD. (7) A registrar is the authoritative, master database of all domain names registered in each TLD. (8) A registry operator can establish its own business model and policies for its registry, creating rules and setting registration prices. Not only can this provide an ongoing revenue stream, but registry operators can vastly extend the reach of their brand and increase brand awareness. (9)

The explosion of new...

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