First, Some History

Originally, domain name structure was put in place to aid navigation.  In reality, a domain name is simply a more memorable and attractive address that is associated with an IP address.  For instance, without a domain name, to get to Dotster’s website you’d type in 66.150.120.141 instead of www.dotster.com.  The www stands for world wide web, the “dotster” is the specific domain, and .COM is the TLD originally intended for commercial purposes that has since become the most common.

Then came the search engine.  People began to move away from direct address-bar navigation to searching for websites.  Suddenly, a good domain name was slightly less important, while ranking high at the top of search results was key.  Consequently, some people rationalize that even though many of the good .COM domains are taken, having a good domain isn’t as important as it used to be.  Ironically, this argument often fails because a big part of ranking high in search engines is having a good, relevant domain name that people link to.

Next, cybersquatters enter the equation.  When a company (we’ll call them company.com) registers its domain name, it’s generally also a good practice to register the .NET, .ORG, and other variations of that name so that someone else cannot purchase them.  Then they’d also be wise to snatch up similar domains and misspellings, such as thecompany.com and copmany.com.  And while they’re at it, they had better grab companysucks.com as well to make sure someone else doesn’t put up a website bashing the company.  If a company doesn’t do this, they’re exposed to other people buying those domains, potentially with the goal of making money from ads or even from trying to sell that domain to the company at a marked up cost.  There are processes companies can go through to take over a domain name that includes a trademark or notable name, but that can be costly in its own right from legal fees and company resources.

So What Now?

ICANN has stated that at some point in the near future they will open up a nearly infinite number of new TLDs.  But wait – don’t think that you’ll be able to go and buy .yourname and have an infinite number of personalized domains available.  Currently, people who purchase domain names buy from a domain registrar (such as Dotster).  The registrar in turn secures that domain name with a registry.  For example, Verisign is the registry for .COM and .NET.  Verisign deals directly with ICANN and pays fees to maintain itself as a registry.  Becoming a registry is anything but cheap.  It can cost tens of thousands, if not hundreds of thousands of dollars in start-up costs to become a registry.  This is something that a large company might not blink an eye at if it means securing their own exclusive TLD, but to the average domain buyer a TLD is completely out of the realm of possibility.

What happens if there are too many TLDs?  This is another question coming up regularly in the discussion around ICANN’s plans.  Does having too many dilute the actual domain name?  The ability to create subdomains (such as blog.company.com or about.company.com) already exists, so is there a point in being able to create www.blog.company or www.about.company?

As you can probably see, this entire situation is complex and has many different aspects to consider.  There’s not necessarily a right or wrong answer, so here are the basics of each side of the debate:

The Anti-New TLD Argument

• New TLDs will simply dilute the power of a domain name further.
• ICANN just sees new TLDs as a way to make more money by creating more registries.
• Subdomains already exist, and new TLDs makes them pointless.

The Pro-New TLD Argument

• Companies will be able to truly own their entire brand online by becoming a registry (i.e. Dotster could buy the .dotster TLD and have its exclusive use).
• Companies will be able to better instill trust in their websites and brand by having their own TLD.
• New TLDs will deter cybersquatters.
• Having a variety of TLDs will help organize the web better.

Dotster’s View

We’re fairly neutral in the whole issue.  Just recently we’ve happily embraced new TLDs such as .ME and .TEL.  From our perspective, ICANN allowing scores of new TLDs isn’t an “if” as much as it is a “when”.  We look to meet the needs of our customers, so if there is a demand for a new TLD we’ll be ready to work with a registry to provide it.  If you’re looking to score that great .underwaterbasketweaving domain, you’ll be in luck – assuming someone creates a registry for that TLD and wants to sell domains.  However, when it comes to companies buying their own TLD, we wouldn’t be affected because they most likely wouldn’t be looking to sell domains using their TLD to the public.

This topic will continue to evolve as ICANN moves closer to making new TLDs a reality, so stay tuned!

Read some other opinions on the new TLDs:

ICANN’t Believe It’s .butter – Marketing Pilgrim

Who Needs More TLDs? and follow-up What are TLDs Good For? – CircleID

New Flood of Top-Level Domains Could Spell Chaos – PC World