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Amazon, Google, And The Prospect of Closed gTLDs - Don’t Believe the Hype

There have been a lot of complaints leveled at companies like Amazon and Google who have applied to register a number of new gTLDs. The criticism is that the public will not benefit from having Amazon own .book, .store, .you, and .grocery if they only use it for their own purposes and don’t open them up to sell domains to the broader public, and that allowing these companies to own generic registries will hurt their competitors in that space. Although these arguments are not without merit, there are also positive aspects to having established companies own gTLDs.

Of the 1,930 applications for the new TLDs 15% are for .brands and 4% are for community based applications that will (hopefully) be curated to include only registrants that are part of the registries subject matter - i.e., only psychiatrists in .psych. The rest are applications for generic terms that will be owned, most likely, by companies that will operate the registry in order to maximize their return on investment and thereby sell the most domains possible in each gTLD. This is going to create a wave of domain registrations larger than anything we have seen before, and it is certain that there will be a lot of cybersquatting, trademark infringement, phishing scams, brand abuse, and the like, in these new spaces. This type of activity is bad for everyone, trademark owners and the public alike, because it creates confusion and erodes consumer confidence. However, the new registries owned by Amazon and Google will likely have none of these problems. In fact, if Amazon and Google are able to leverage the new gTLDs in ways that are valuable to their customers, increase identification/search efficiency, and simultaneously maintain a secure ecosystem, this is a net positive outcome even if the public can’t purchase domains in their gTLDs.

But what about competition? It is true that if Amazon gets the .book registry it could use it to the exclusion of other book sellers/publishers who might have wanted to use it to brand their businesses. However, if .book is going to become popular it will be incumbent upon Amazon to create a powerful marketing and branding strategy that lets the public know about the .book tag and to look for it when searching for books online. Besides the cost of doing this, there is a risk for Amazon that its customers might not like this. For example, Overstock.com changed its domain to “www.o.co” only to switch back to Overstock.com because its customers did not want to use the different domain. This could be the situation for Amazon if it uses the .book gTLD in a way that the public does not appreciate. Amazon’s actions could also galvanize its competition to take up their own competing registry in the next few years (perhaps a community application for “.booksellers”?) or use their familiar places in the existing .com/.net space to their advantage over Amazon.

Further, whether there will even be demand for the generic registries, beyond domain name speculation, is anyone’s guess. Although ICANN has touted the 1,930 TLD applications as proof positive that there is strong demand, the number may be deceiving. When the .xxx registry was opened several months ago there was an explosion of activity including thousands of defensive registrations made by companies and institutions that simply did not want their name to be used by a third party. Having a company name resolve to a website with the .xxx ending could be damaging. The .xxx registry now has approximately 220,000 registrations, but roughly 83,000 of these are “blocked” registrations that do not resolve to active websites. Thus, even though the .xxx registry provider has touted the strong number of early registrations as an indication of its popularity, this is simply not the case. The same may be true for the new gTLD program where the initial rush to apply for a gTLD may be driven by speculation and the desire to prevent someone else from getting the registry, rather than a proactive plan to utilize the registry in the new and innovative ways ICANN is hoping for. One could argue that simply selling domains to the public is hardly innovation and that it will be established companies that will blaze the trail for innovation by using the new registries to identify themselves, related businesses, and to build communities around familiar terms that have the capacity to transform the way users search the Internet.

When Congress conducted hearings on the new gTLD program several months ago one of the speakers, Ms. Esther Dyson, the founding Chairman of ICANN from 1998-2000, testified that although she had initially approved of the program she had changed her opinion because the “ease and lack of accountability with which someone can buy a domain name has led to a profusion of spam, phishing and other nefarious sites.” According to Ms. Dyson, “by creating a whole new set of redundant names, it will lead to the introduction of more individuals and entities intent on stealing from brands on the Internet.”

Although these comments are emblematic of most of the criticism directed toward the new gTLD program, they are not applicable when talking about the .brand registries or generic registries that will be owned by companies like Amazon and Google who have a strong incentive to make sure their actions in the gTLD space do not damage their business, name, and/or reputation by facilitating brand abuse, trademark infringement or eroding consumer confidence in the Internet. Instead, their participation will likely bring stability to the gTLD program and more immediately represent the values of progress and innovation that ICANN is hoping to see from the program.

By David Mitnick, President DomainSkate LLC

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