Everyone from Nokia and Novell to the World Health Organization are lining up for the rights to establish and manage the “next .com.” While setting up new top-level domain names certainly seems like fun, it must be done in a manner that ensures the Internet will grow more like a stately tree than like kudzu.
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Let's refresh. Website domains are described in two ways: by their top-level names and their second-level names. Top-level names are the Web address suffixes such as .com and .org, which are maintained by registries in a huge database. Second-level names, such as the "fool" in fool.com, are handled by registrars. Until recently, the only registry out there was Network Solutions -- now VeriSign (Nasdaq: VRSN) Global Registry Services -- but that's going to change. (There are more than 60 accredited registrars worldwide.)
The Internet Corporation for Assigned Names and Numbers (ICANN), a nonprofit coalition of corporations, academics, Web users, and others charged with maintaining sanity in Web domain naming, wants to continue spreading the "power" in much the same way it did when it lifted Network Solutions' mandated monopoly on the registrar business. One way it could do that is by granting new groups the rights to set up new top-level domains (TLDs).
Yesterday ICANN's application period for new TLDs closed and the list of applicants, Register.com among them, went up later. It's worth a look. Organizations ranging from Novell (Nasdaq: NOVL), which wants .dir, and Rule Maker Nokia (NYSE: NOK) -- which has its eyes on a number of TLDs, including .mobile, .now, and .own -- joined no-names and even the World Health Organization in bidding to join the fun. Some TLDs, such as .tel and .nom, were proposed by more than one applicant. (Unless they know something I don't, Register.com's only purpose in sending out a press release was publicity -- it isn't guaranteed success in this venture.)
ICANN's job is a difficult one. Not only must the organization judge each individual applicant's worthiness, intentions, and ability to handle the responsibility of maintaining what will become one of the Internet's key building blocks -- perhaps the $50,000 application fee was "Step One" in that process -- but it must consider its broader mandate to ensure that Internet grows in a "stable and controlled manner." Suddenly creating a slew of TLDs with little mind for usability could create a navigational nightmare.
Perhaps luckily for ICANN, there hasn't been a loud clamor for alternatives to .com, .org, and .net (.edu and three others are for restricted use, while the aforementioned three are commercial). There are already alternatives to the "big three" currently available for folks interested in registering under other nations' country codes (e.g., the suffix for our German website, fool.de). But the island nation of Tuvalu's efforts to market its .tv suffix to the world's media corporations has, for the time being, been about as successful as a Téa Leoni sitcom.
Whether there is a long-term investment angle here remains to be seen. Network Solutions receives a nice chunk of change to maintain the registry database for the "big three," and the aforementioned list of upstarts may hope they can market their own TLDs and create a nice recurring revenue stream. (Some companies have apparently jumped the gun, offering preregistration for TLDs that don't yet exist.)
But would oversupply kill the market? That might be ICANN's eventual goal, especially given the sorts of companies it granted registrar rights to (small and nonprofit organizations as well as huge corporations). It certainly does seem as if domain names are already well down the commodity road, so there's got to be more to a business plan than simply obtaining registry rights.
Look for ICANN to post full TLD applications to the Web this weekend. Public comment will run for the rest of the month while the group considers the applications, and new TLDs are generally expected to become available sometime next year.
Your Turn:
How many TLDs are too many? Take another look at the list of applications and let us know which make sense to you -- and which don't -- on our Nico's Internet Nook discussion board.
Related Links:
VeriSign Authenticates a Double, Daily Double, 10/2/00
Network Solutions Jumps Another "Hurdle"?, Fool Plate Special, 5/8/00
Interview with Register.com CEO Richard Forman, StockTalk, 4/6/00
VeriSign Signs Up NSI, Fool Plate Special, 3/7/00
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