In new Web domain system, companies must decide how much words are worth


ICANN President and CEO Rod Beckstrom speaks on expanding the number of domain name suffixes during a press conference in London on June 13. (Tim Hales/AP)
June 17, 2012

A change in the way Web sites get named is opening the door for a bidding war among corporations vying for the right to words that come after the dot in Web addresses.

Most Internet users are used to seeing URLs that end in “.com” and “.gov.” But the organization that regulates the naming of Web addresses, a California nonprofit known as the Internet Corporation for Assigned Names and Numbers (ICANN), is opening up the naming scheme to include hundreds of new endings, from “.coffee” to “.condos.” As a result, dozens of companies may have to outbid each other to win exclusive rights to the most popular ones.

In January, ICANN opened up a four-month application process during which companies and individuals could apply for new URL endings, and last week released a list of the roughly 1,900 companies and individuals that submitted applications.

ICANN has expanded domain names before, adding seven new domains (including “.biz”) in 2000 and 10 more (including “.xxx”) in 2004. But “this is the first time there was a large-scale opportunity for parties to come in and apply for whatever they wanted,” said Brian Winterfeldt, an attorney at Steptoe & Johnson in Washington who helped companies submit applications, including “.coach” for Coach handbags and “.hbo” for HBO, the cable channel. “It is a shift in the way businesses apply for brands ... We liken it to a virtual land rush.”

Most of the new applications are uncontested, meaning only one company or individual is seeking to own the word. But dozens of words are sought after by multiple parties: 13, including a Google subsidiary, want “.app.” Ten, including one of Winterfeldt’s clients, the Aremi Group, a Luxembourg company that runs an art gallery, have applied for “.art.” Nine have applied for “.blog.” Washington Kastles owner Mark Ein is one of four applying for “.tennis.”

Having exclusive control of a domain would give a company an edge over competitors by claiming a space to market products or services that their competitors cannot enter. If the parties can’t agree amongst themselves, it will go to an auction process before ICANN, and the highest bidder will win. There is no limit to how much a company can bid, said Winterfeldt, who is also a member of ICANN’s Intellectual Property Constituency, a group within the organization that advocates for brand owners.

The proceeds of the auction go to ICANN, which has already made $350 million from the applications that cost $185,000 each to submit.

“The action is really just beginning now,” said attorney John Murino of Crowell & Moring, who represents nearly 100 companies applying for domain names.

In 2010, Murino represented ICM Registry, an Internet registry services company, in its dispute with ICANN to launch the “.xxx” domain. “There are new opportunities for people to register names that may impact your business. Everyone has to review the list and decide whether they want to object. If someone else in your industry applied for something that matters to you, you have to be concerned about it.”

Catherine Ho covers law and lobbying for Capital Business, which she joined in 2011. She was previously a reporter at the Daily Journal in Los Angeles, covering LA civil courts and labor and employment law.
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