Wed, Aug 31, 2011 - Page 9 News List

What is really behind the introduction of new domain names?

The proliferation of new Web site names is turning out to look more like a shakedown aimed at lining the pockets of those in charge of name registrations


A name is just a sound or sequence of letters. It carries no value or meaning other than as a pointer to something in people’s minds — a concept, a person, a brand or a particular thing or individual.

In modern economies, people distinguish between generic words, which refer to concepts or a set of individual things (a certain kind of fruit, for example), and trademarks, which refer to specific goods or services around which someone has built value. By law, actual words cannot be trademarks, but specific arrangements of words — such as Evernote or Apple Computer — can be protected.

The Internet’s domain-name system (DNS) was formalized in the late 1990s by the Internet Corp for Assigned Names and Numbers (ICANN). I was ICANN’s founding chairman and we more or less followed the rules of trademarks, with an overlay of “first come, first served.” If you could show that you owned a trademark, you could get the “.com” domain for that name, unless someone else with a similar claim had gotten there first. (The whole story is more complex, but too long to go into here.)

Our mission was to create competition for Network Solutions, the monopoly player at the time, but we did so only in part. Network Solutions retained control of the .com registry, whereas we created a competitive market for the reseller business whereby registrars sold names directly to users.

Now ICANN is taking a different tack, allowing for a dramatic expansion of the namespace with a host of new Top-Level Domains (TLDs), the suffixes that go after the dot, such as .com, .org and, soon, .anything.

The problem is that expanding the namespace — allowing anyone to register a new TLD such as .apple — does not actually create any new value. The value is in people’s heads — in the meanings of the words and the brand associations — not in the expanded namespace.

In fact, the new approach carves up the namespace: The value formerly associated with Apple could now be divided into Apple.computers,, and so on. If this sounds confusing, that is because it is.

Handling the profusion of names and TLDs is a relatively simple problem for a computer, even though it will require extra work to redirect hundreds of new names (when someone types them in) back to the same old Web site. It will also create lots of work for lawyers, marketers of search-engine optimization, registries and registrars.

All of this will create jobs, but little extra value. To me, useless jobs are, well, useless. And, while redundant domain names are not evil, I do think that they are a waste of resources.

Imagine you own a patch of land and have made it valuable through careful farming practices — good seeds, irrigation, fertilizers and bees to pollinate the crops.

However, now someone comes along and says: “We will divide your land into smaller parcels and charge you to protect each of them.”

Coca-Cola is that farmer. It and other trademark holders are now implicitly being asked to register Coca-Cola in each new TLD — as well as to buy its own new TLDs. Otherwise, someone else may create and register those new TLDs.

ICANN’s registrars are already offering services to do this for companies, at a cost of thousands of US dollars for a portfolio of trademarks. That just strikes me as a protection racket.

The problem is not the shortage of space in the field of all possible names, but the subdivision of space in Coca-Cola’s cultivated namespace. The only shortage is a shortage of space in people’s heads.

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