One of the hottest topics associated with online branding is how ICANN’s decision to allow for the registration of any new TLD could affect a brand’s online strategy. After all, in these difficult economic times, companies need to be more prudent than ever when allocating their resources. If you ask me, any speculation and hype about dot-brand being the wave of the future sounds an awful lot like the speculation and hype that surrounded the IPOs that cropped up in the late 90s…and look at how that ended up.
Over 300 stocks became listed in 1999 — more IPOs than ever before. Brokers recklessly pumped up most of these stocks because they earned huge fees by selling them. Investors bought them and more sank than sailed after the bubble burst. Now, as the domain market heats up, will there be another bubble?
There are 300 new TLDs expected in 2009. If past TLD expansions are any indication, sunrise periods tend to be hyped and driven by registry operators who hope to create enough momentum to garner instant profitability for their new extension and registrars that make millions in year one and earn renewal fees for as long as companies retain domains to protect their interests.
Let’s take a look at the numbers. If a brand owner defensively registers just one name in each of the expected 300 new TLDs at $500 per domain, the costs could add up to around $150,000. Brand owners who have more than one “crown jewel” and register defensively in all extensions could face much greater expenses. Even if a company participated in just 20 percent of the new TLDs (assuming the estimated costs are similar to past TLD sunrise periods) and registered their “top 10” list in each, they’d face $300,000 in new costs for “defensive” domains.
It is important to consider the pros, cons and other implications of the advent of these new TLDs now, since many in the domain name industry have already begun to set things in motion. For example, one company recently hosted a webinar on a potential new TLD for Deloitte, a company that is the main agent hired by new registries to validate domain applications filed in most of the recent TLDs.
Brand owners should be ready to critically examine decisions that are made in the space with regards to new TLDs; this way, when the time comes for a brand to decide what their role is, they’ll be able to discern what is best for their company and the Internet community from what will simply serve parties contracted by ICANN and other domain-industry players.
Is it time for brands to adapt their strategies to the onslaught of new TLDs, or can the Internet community band together to prevent too many new TLDs from being launched?
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