A Framework for
Selecting New TLDs
Alex
Tajirian
July 17, 2009
Your corporate domain names send implicit messages
(signals) through their Top-Level Domains (TLDs) and their second-level
words. Shape your domain names so to send the right messages and
to avoid sending unintentionally confusing messages. The post focuses
on a framework to help bidders determine which TLDs send messages
that are potentially profit generating.
As many readers are aware, the Internet Corporation
for Assigned Names and Numbers (ICANN) has recently
approved relaxing the rules for the introduction of new top-level
domains (TLDs). Soon TLDs such as ".car," ".cars," ".green," and
".eco" will be available to any qualified body whose request is
favored by the allocation system. The system being discussed is
a combination of beauty contests and auctions.
Once new generic TLDs are established, companies
and the public decide which second-level domain names to register
under the approved extensions. The value of the signal depends on
its desirability, which is driven by the demand for the associated
second-level domains. The value of branded TLDs depends on the final
registration restrictions adopted by ICANN.
Designations and Branding
The value of ".com" is determined by the branding
message it transmits, which has evolved from the TLD's original
designation for commercial use. Two of the original TLDs, ".net"
and ".org," were intended to signal an Internet company and a nonprofit
organization, respectively. In practice, bodies that wanted a ".com"
but couldn't get one have settled on ".net" and ".org" as second
best. True, the TLDs' original signals have not faded from the minds
of Internet users: consider the indirect marketing by Microsoft's
".Net" project and the use by the recently created BushClintonKatrinaFund
of ".org" for advertising and branding even though the group also
owns the ".com" extension. But ".net" is often used for name-servers
(".net" represents 58% of worldwide hosts and 30% of the world's
nameservers according to VeriSign's article "There's
More to .Net Than Meets the Eye”) or as the TLD for employee
email addresses; Forbes, for example, uses ".com" as its main TLD
branding and ".net" for email.
There are two widely held theories as to why
additional extensions such as ".biz" and ".info" are being introduced.
One is that they are intended to relieve the strain placed on the
original TLDs by the tremendous growth of the Internet, with ".biz"
signaling an online business and ".info" an online information site.
The other view is that they were intended to break the monopoly
of ".com."
The ".us," although technically a country-code
top-level domain (ccTLD) for the United States, has been used by
U.S. companies as an alternative TLD and as a way of signaling an
American business presence.
Message Types
Below I outline three kinds of primary message
and one kind of secondary message. As noted earlier, a message can
be sent through either the TLD and/or the second-level domain name.
To decide at which level to signal, you need to be clear on what
you want to signal and how your message can get across.
The three primary message types are:
- Location. A company can send a message about
the presence of its office in a specific location. For example,
".SF" can signal San Francisco. Thus, the Italian carmaker Fiat
can signal its presence in San Francisco by using "Fiat.SF".
- Brand positioning. Suppose that Honda wants
to expand from cars into the aerospace market—it registers
"Honda.aero." Or Exxon signals expansion into green energy, or
merely the birth of an environmental conscience, by using "Exxon.green."
- Branding. For trademark owners, the decision
to register defensive TLDs depends on the final version of the
ICANN-approved trademark registration regime. If registering a
brand TLD adds value, i.e., an offensive registration, then it
should be registered irrespective of whatever regime ICANN finally
adopts for domain-name intellectual property.
A text-based URL can never look as snazzy as
an elaborate graphic image or animation, but a domain name must
still have a visual personality. For example, ".BMW" has less visual
personality than "BMW" or "BMW.com." Also "BMW.cars," if ".cars"
were approved, has no branding personality; thus, if the eventually
adopted trademark regime restricts brand-based extension ownership
to brand owners, BMW should not register the ".BMW" TLD. At the
second level, capitalizing key words, as in a headline, can make
a name into a memorable statement instead of a jumble of letters.
Compare thisisourwebsite.com and ThisIsOurWebsite.com.
New proposed TLDs that use geographical designations
can provide personality as well as information. For example, compare
"SFBMW.com" and "BMW.SF." In online games, for example, the use
of the ".SF" TLD would signal the presence of a BMW dealership/store
in San Francisco. Of course, and this is especially the case with
superlatives and geography, a personality needs to be authentic
if it's going to be effective.
Demand for a new TLD can be estimated using prediction markets and statistical modeling. The demand for second-level domains
has to be estimated over a period beyond the initial speculative
period. Perceived failures, such as the underwhelming number of
registrations for the recently released TLDs (".info," ".biz," ".cat,"
and others), do not imply failure for future TLDs. Nevertheless,
there can be valuable lessons to learn from the failures. For example
GM's decision to scrap the production of electric cars gave Toyota
Prius a lifeline. Also, Apple's failure with Newton did not mean
the death of PDAs or keep Apple from pursuing what turned out to
be the phenomenal success of the iPhone. One potential reason for
the limited success of certain TLDs is the lack of a roadmap such
as a signaling framework. A second is the lack of rigor in estimating
demand for individual TLDs.
Concluding Remarks
When considering registering a TLD, you need
to analyze the implied message and personality.
Failure of previous TLDs does not imply the failure
of new ones. Nevertheless, demand should be estimated using scientific
methods such as prediction markets and statistical techniques.
Related References
Topic tags: corporate
domain management, defensive
registrations, new
ICANN TLDs
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