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What are TLDs Good For?

Yesterday I said that the original motivations for adding new TLDs were to break VeriSign’s monopoly on .COM, and to use domain names as directories [links: here and blog]. Competitive registrars broke the monopoly more effectively than any new domains, and the new domains that tried to be directories have failed. So what could a new TLD do?

Get rich quick: the new domains with the most registrations are .BIZ and .INFO, clones of .COM and .ORG for people who missed out the first time. Despite vigorous marketing and, for .INFO, price cutting, neither is more than a pale shadow of the original, and both are plagued with sleazy registrants. Nonetheless, we can expect a few more clones like .WEB, who will make their money from defensive trademark registrations, domain squatters, speculators, and a few suckers who think that SAUERKRAUT.WEB can be the gateway to a mail-order fortune.

Idealists: Another unpersuasive theory says that a TLD enables communities. The best example to date is .CAT for Catalonia, which is modestly successful but doesn’t tell us much since Barcelona is a rich sophisticated city that would be awash in Internet content with or without a domain. On the other hand .MUSEUM is a noble failure, with only about 200 registrants, a lot of dead links, and negligible visibility. Two pleasant young men have been trying to get .BERLIN through ICANN for years, and there are other candidates like .ECO, but it’s hard to see why anyone would switch from their existing domain in .DE or .ORG or whatever since they haven’t for any of the community domains we have now. I’ve heard claims that tiny language groups in danger of dying out need their own TLD, but it seems to me that if they could raise the $185K that a TLD application costs, they’d be a lot better off hiring linguists and programmers to compile dictionaries and adapt text and web tools to work in the language.

Certification: sponsored TLDs are supposed to ensure that all of their registrants meet specific requirements, so you know that a domain in, say, .COOP is an actual co-operative. The flaw in this theory so far is that none of the sponsored TLDs so far have been in areas where there’s a problem with fakes, nor do they have any process to verify that registrants remain eligible. The little poultry packer that registered CHICKEN.COOP sold out to a larger company, but nobody noticed they weren’t a co-op any more until I wrote to .COOP management and told them. They thanked me and encouraged me to report any more violations I saw, so I guess I volunteered to be the compliance department. The number of registrations in .COOP is on the order of 1% of the co-ops in the world, so it appears that the other 99% of co-ops are getting along fine without a special domain.

The .PRO domain is supposed to be just for licensed doctors, lawyers, accountants and maybe other licensed professionals (the web site is a bit vague), who have to present their licenses to register, but a combination of mismanagement and financial problems have allowed in large numbers of speculators and other registrants who clearly don’t meet the criteria, so it doesn’t tell us anything useful. I could imagine that a .BANK domain that carefully vetted its registrants to be sure they were real banks with government banking licenses might help tell real from fake bank web sites and mail, but that certification niche seems to be taken already by green bar SSL certificates.

Branding: The new rules allow single owner domains, so we can expect Apple to get .MAC and probably other companies will register their name like .IBM or brand names. Marketers are doubtless salivating, but for regular users, it’s hard to see why you’d want to be BOB.MAC and rent your identity to your computer vendor.

Non-English languages: This is the only one that has any urgency at all. China really wants .?? in addition to .CN, and a lot of other countries with non-Roman writing would also like localized domains. ICANN has a separate process for non-ASCII TLDs, so I’ll ignore them for now.

So running down this list, where’s the compelling argument? Does anyone (ignoring those with vested interests) really think that more TLDs will break the .COM monopoly? That more “community” TLDs will be any more of a success than the failures to date? That anyone will use a TLD rather than a search engine as a directory?

The only unambigous beneficiary of new TLDs is ICANN, whose cash flow will increase by $185,000 per application, and all of the consultants they’ve hired to do the evaluations because ICANN’s many highly paid staff evidently can’t do it themselves. Since a lot of the new TLDs will be run by organizations with little or no experience as a registry, we can expect them to learn slowly and painfully about all the sleazy tricks that crooked registrants pull.

In sum, neither of the two classic arguments for new domains, competition and directories, have worked in the past decade, and there’s no reason to think they will in the future. Other than support for non-English languages, all of the other rationales strike me as wishful thinking, not business models. So I look forward to .?? and its ilk, but other than that, they’re all going to fail, very expensively.

By John Levine, Author, Consultant & Speaker

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Very thoughtful analysis Paul Tattersfield  –  Jul 4, 2009 12:08 AM

Just to add

.com isn’t sold or advertised by VeriSign. It is sold and branded implicitly by virtually every major corporation using it day in day out across all their communications. It’s that simple.

The success of the internet is because it delivers efficiency to the market place. It enables anyone to reach an unfathomable number of people simply by buying a domain name. Cost - $10 + hosting per year. Mind blowing!

ICANN’s new gTLDs for corporations and brands changes this by taking advantage of the efficiencies afforded by the original design of the Internet over non internet models. And in doing so creates a super league the cost of entry to which is $185,000 and $25,000 + hosting per year.

Recent trends in brand evolution have led to many websites both on and off line using a more and more minimalist form

.brand if allowed may follow

If this happens and is reinforced worldwide in corporate communications day in day out users will quickly come to recognize that a brand to the right of the dot is a major player and therefore by implication a brand to the left of the dot will be perceived as a lesser brand.

The level playing field of the internet is destroyed and a super league created.

The Creation of a Super league

There has to be serious concerns not least because a single layer model to the right of the dot can never replicate the complexities of businesses around the world.
Whilst initially appearing to offer more freedom for new domains it actually offers less freedom.

For example if there is .dell .ibm what about brands like .hp? HP is seriously disadvantaged simply because its brand is 2 letters and 2 letters are reserved for country codes.

Or the fact that it offers a system where there can only be one organization to the right of the dot - ever! This is a step backwards from the existing system which by careful management of competing open generic gTLDs allows multiple totally separate entities to each enjoy a similar level of branding in the second level to the left of the dot.

What about organizations whose names conflict with geographic areas? .amazon? What about organizations or brands that share a name with places that may in the future have a need for an internet presence? .moon or .saturn etc. What about companies whose brands are already taken like .cat?

But most importantly a Super league destroys the ability to compete on a level playing field. At the moment to launch some software designed compete to with Microsoft or Sun its $10 + hosting a year then it’s down to skill and innovation.

A super league changes this and medium sized players will have to consider whether it worth spending $185,000 + $25,000 per year with ICANN to enjoy the same level of branding and enter the Super league. For startups and smaller players cost of admission to this implicit branding advantage is likely to prove prohibitive.

The Creation of Private Monopolies

If day to day usage and advertising of corporate bands to the right of the dot means they enjoy competitive advantage then generic names to the right of the dot will become to enjoy a similar branding advantage.

Generic names such as .news .shop .store .music .radio and .movie will become to be perceived as superior. Their simple existence will create a series of worldwide monopolies.

What happens if Microsoft applies for .search? If they are granted rights to .search how is google.search handled? May be Microsoft would be happy to allocate it to Google especially if they can then use shopping.seach, images.search & video.search. themselves.

What happens if Rupert Murdoch purchases a controlling interest in a company which is awarded .news?

btw I always wondered who first thought of the splitting Registries and Registrars - pure brilliance! An irony is some of the people calling for relaxation of the boundaries actually have the most to loose if the protection the current model affords them is taken away.

TLD for certification is bad DB design Alessandro Vesely  –  Jul 5, 2009 5:40 PM

Certification: sponsored TLDs are supposed to ensure that all of their registrants meet specific requirements, so you know that a domain in, say, .COOP is an actual co-operative. [...]

That reminds of John K.‘s argument about whois records, that commerce sites (ideally .COM) should not conceal their identities. I can understand .COM, because it was very common until the 80s to design databases where critical attributes played the role of search keys.  Afterward, that habit has been stigmatized and considered a design error. Thus, it seems more difficult to understand .COOP, which has has been launched in 2002. However, the feature that triggered that change, secondary indexes, is still missing from the DNS.

Specialty TLDs Daniel R. Tobias  –  Jul 8, 2009 12:03 AM

If their targeted communities had actually used them, such domains as .museum, .aero, and .coop might have had some success.  As it is, I very rarely encounter any of them, even when visiting museums, airports, and co-op stores.  (However, when surfing the WiFi options at the Washington National Airport recently, I found that one of the networks redirected my browser to a .aero page when selected; that’s the first time I recall running into one of those other than when actually looking through the registry’s own site.)

Specialty TLDs -- too little, too late John Klensin  –  Jul 8, 2009 11:29 PM

The problem with the specialty (“sponsored”) TLDs you cite is that they were too late in the grand scheme of things.  Once an organization has established a presence in an existing domain, advertised it heavily, and gotten its customers to think about it that way, its incentives to move its primary presence to a specialty domain are very limited.  Having established a presence for FavoriteAirline.com or BigArtGallery.org, it is hard to see what benefits would accrue directly to those organizations if they moved to FavoriteAirline.aero or BigArtGallery.museum.  Worse, those organizations would have to maintain the original domains for a long time, perhaps forever, or invite phishing and other hostile attacks.

Had the specialty domains been established before most of their logical registrants and customers had well-promoted name identities somewhere else, the story might have been different.

The problems of those established organizations and their domain names is then compounded by search engines that rely on popularity of references.  While they retained their original domains, all references to them used the same links and hence got them priority.  If they transition some of their activities to the new TLD, they split the counts.  Search engine algorithms might be smart enough to compensate for that, or might not, but why take the risk?

That logic means that only one type of registrant goes primarily into the newly-added domains: those who haven’t had much of an Internet presence before and who hope that the new TLD will become sufficiently established to reinforce their presence.  The establishment of the TLD “brand” itself depends on the major actors, and those are already established elsewhere: if they have any incentive to migrate, it is out of support for a community of which they perceive themselves to be a part—the very opposite of giving themselves competitive advantage.

The net result of this is that I agree (this time) with John’s conclusion, only I would go a bit further: the only significant beneficiaries of adding a lot of new TLDs are going to be ICANN’s revenue stream, TLD operators who get paid whether there are significant numbers of useful (not redundant) registrations or not, those who are in the business of writing applications and marketing material, and the bad guys.

There is one other aspect of the situation that seems to be under-appreciated. Single-component domain names are problematic in many applications.  To a web browser, “foo” is much more likely to be a request to call a search engine or an abbreviation for “foo.com” (or “foo.current-ccTLD”) rather than part of a URL.  To many mail clients, “user@foo” is more likely to be a local name that cannot be transmitted over the Internet rather than a TLD with mail address records.  And so on.  Those problems can be “fixed”, but the fixes, whether with special syntax or “try one thing, then another” searches, will have problems of their own including creating new vunerabilities for attack.

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