Archives For new gTLD

Depending on the person, the word auction can bring to mind a dusty, hot structure full of livestock and a fast-talking announcer with a Western lilt to his voice or a cool, quiet room of well-dressed art patrons waiting for the next Impressionist masterpiece to be unveiled in a stately building on the Upper East Side.

Auction

Aside from applicants for new generic top-level domains (gTLDs) and those in the ICANN community, most people probably don’t think of auctions as a way to resolve what are essentially bids for words – words as they appear to the right of the dot in your address bar.

When more than one company or group applies for the same gTLD, a “contention set” is formed. A contention set can be resolved in one of four ways: community priority evaluation, direct negotiation, a private auction not affiliated with ICANN, or an ICANN auction.

The ICANN auction is considered the “auction of last resort”, even by ICANN, since it means the contention set could not be resolved through community priority evaluation or through an agreement between the parties. Additionally, it means that those applicants who “lose” the auction (i.e., those not being awarded the gTLD) will not receive anything from the winning applicant – such as monetary compensation or compensation in the form of select domain names in the TLD in contention – in return for the future Registry Operator being awarded the string.

Given that applicants only receive a 20% ($37,000) application refund after being unsuccessful in an ICANN auction, a number of applicants have been eager to resolve contention sets through other means, including private auctions, where the party (or parties) not awarded the gTLD is (or are) compensated.

While many corporate applicants have voiced hesitation about entering private auctions out of fear that applicants may drive up the bidding to increase their payout, it is likely that more applicants will find a non-ICANN means to resolve contention sets as the scheduled dates for ICANN auctions approach.

The schedule for ICANN auctions, as our own Stephanie Duschesneau explained in a blog posted earlier this year, has caused some consternation among applicants. In response to feedback from the community about the long timeline (the last contention sets were to settle in 2016, “an eternity in business terms”, Stephanie notes), ICANN adjusted the initial auction rules to allow for the resolution of 20 contention sets a month as opposed to 10, moving up the last scheduled auction to March 2015.

According to the current ICANN auction schedule, only one ICANN auction is planned for June 4 because other applicants in contention have postponed going to ICANN auction. In the meantime, 13 strings – or new gTLDs – were resolved last month through private auctions, according to industry blog Domain Incite. Does this mean that applicants are treating the ICANN auction as a last resort, as ICANN had hoped? Possibly, but it’s too soon to tell.

As FairWinds Senior Consultant Lillian Fosteris explained, “Some applicants are eager to move forward and want assurance that the string is theirs. Consequently, they elect to resolve the contention, if possible, sooner, rather than later. Others, including brands that applied for closed generics, are still trying to figure out their next steps. Still others are set on proceeding to ICANN auction, whether it is later this summer or as late as 2015.”

Fosteris also noted that, in the most recent version of the New gTLD Auction Rules, ICANN reserves the right to postpone an auction at its sole discretion and that – in the event of a tie (following the winning bidder being declared in default after the conclusion of an auction) – ICANN will use a random number generator to award the gTLDs.

Private auctions may actually resolve an entirely different question: If a picture is worth a thousand words, how much is a word worth? Judging by what applicants may have already paid for strings like .YOGA, the answer is in the millions, at least to Minds +Machines (now the proud owner of .YOGA). Whether Internet users deliver traffic to websites in .YOGA is another matter, but given that yoga is a $27 billion industry, it may not be a bad bet – or rather, bid.

The Boston Consulting Group (BCG) released the results of this year’s Most Innovative Companies survey last week.  The survey is conducted by BCG as follows:

As in past surveys, the 2013 results reveal the 50 companies that executives rank as the most innovative, weighted to incorporate relative three-year shareholder returns, revenue growth, and margin growth. The list has its share, as always, of well-known technology innovators (especially among the top ten), but automakers also show a strong surge, a trend that began last year and gathered strength in the current results. This time, we also asked respondents to identify up-and-coming companies at which innovation is driving rapid growth.

Since one of the “next big things” in technology is the introduction of hundreds of new Top Level Domains (TLDs) to the Internet, we decided to do a little research: What percentage of these successful, envelope-pushing companies applied to run their own new gTLD?

And, it turns out, over half of the most innovative companies -28 out of the 50 – invested in new TLDs. Of these,16 applied for more than one new TLD.

A whopping seven of the top 10 innovative companies applied for a total of 194 new extensions, including Apple’s .APPLE, Amazon’s .IMDB and Google’s .CHROME.

It seems that the most innovative also invested the most: BCG’s third most innovative company – Google – applied for 101 new TLDs while the seventh most innovative company, Amazon, applied for 76.

“This isn’t a coincidence,” said Taylor Frank, VP of Strategy and Development at FairWinds Partners. “Tech, search, e-commerce and automotive companies are going to do very well with their new gTLDs, whether they applied for their .BRAND, a .GENERIC, or both.”

Frank went on to explain that these new extensions are fertile ground for new business models and innovative approaches to community engagement, brand protection, human resources, and product development.

“The more interesting question is not whether there’s a relationship between being the most innovative and having applied for a new gTLD but whether companies that didn’t apply for a new gTLD will hold their ranking come next year.”

Fashion Week, now underway in NYC, is perhaps the ultimate example of the retail industry’s proclivity for spectacle and showmanship. Even though producing just one runway show can cost over $1 million dollars, as industry expert Kate Betts explained to Marketplace’s Kai Ryssdal yesterday, the residual exposure is worth it thanks in large part to digital devices and social media.

Abigail Keats A/W 2010

Just try signing on to Facebook or Twitter over the next week without being bombarded by an Instagram photo or Vine video of a disinterested waif in a couture gown. Everyone is sharing – your contacts, fashion bloggers, gossip sites, and online versions of traditional media outlets, such as WSJ.com.

Given the natural, if not overwhelming, symbiotic relationship between digital marketing and the fashion industry, it’s not surprising that a new report by e-Marketer finds that the retail industry continues to outspend financial services, telecom and even the consumer electronic industry on digital advertising.  As was explained in eMarketer’s description of the report:

“Industry marketers report today’s brand-advertising mix is evolving fairly rapidly from standard banner units—for which investment is expected to remain flat—to richer and more dynamic units, such as video, as well as social display and hybrid formats that can integrate more tightly with traditional branding workhorses like TV and print.”

And where will these richer, more dynamic units live?

“Retailers aren’t going to be satisfied with campaigns that simply run on social media platforms and existing .com websites for long,” explains Phil Lodico of FairWinds Partners.

“Industry leaders, including some of our clients, have already moved to build entire online worlds that revolve around providing their customers with unique branded content and, in doing so, advertise in a more meaningful way.”

Lodico said companies that own and run their own .BRAND Top Level Domain (TLD) will have unbridled opportunities to engage customers creatively – building followers at a previously unknown rate. Even companies that did not apply for their .BRAND in this latest round are building out innovative campaigns on other relevant .GENERIC top-level domains – set to begin launching in the next month or so.

Investors in new TLDs appear to have seen into the future. Four applicants are vying for the .FASHION site.  I’d bet the new Chanel collection that Fashion Week will reach a new level of digital spectacle in a whole new way once this new gLTD – the meaning of which signals the ultimate retail industry – launches.

Let us know in the comments!

The United States Patent and Trademark Office (USPTO.gov) has proposed that certain new dot-brand gTLDs could be eligible for registration as trademarks - if the gTLDs meet certain criteria.  These criteria include owning a prior registration for the exact mark of the TLD, proving that the mark is famous, and showing that “legitimate services for the benefit of others” are provided under the gTLD.  As expected, dot-generic gTLDs are excluded since they don’t function as trademarks.

While this may seem novel, some of this is really just old wine in new bottles. It has always been the rule that use of a brand solely for a company’s own marketing initiatives does not function as a trademark and is not eligible for registration. Why? Because marketing and promotion are technically not “services” provided to customers. However, in the context of new gTLDs, this may mean that a closed registry – one in which only the brand owner may register domains – might be excluded under the USPTO’s rules if its only purpose is to promote the company’s products. On the other hand, if the gTLD is opened up for use by the company’s distributors, partners, customers, etc., or if the company uses the gTLD to actually make online sales or provide support services, then its use may be “for the benefit of others” and registration will be considered.

The next question is why the owner of a prior trademark registration for the identical mark would care about getting a new registration – which only adds the dot (the one that appears before the gTLD). This may be a tougher question to answer and will depend on whether the brand owner wishes to protect its mark for some new service which is being offered under the gTLD (ex. domain-name registration or registry services, vanity email addresses, etc.).  However, if the goods or services provided under the new gTLD are exactly the same as those covered by prior trademark registrations, a brand owner could choose to forego the new gTLD mark and save some money.

Since the USPTO proposal is currently open for public comment, the final version may change from what’s been proposed. This should be an interesting process to watch even though, in the end, it will only affect a very small number of trademark applicants.

What did I learn on my first and recent trip to France? Well, for starters, I confirmed that the wine and cheese in France really is the best (sorry, rest of the world).  Yet, oddly enough, not one of the three companies that applied to run the new top-level domain (gTLD) .WINE is based in France – and not a single company applied for .CHEESE, perhaps because only a portion of the world’s population possesses the genetic ability to digest dairy (limiting, to some degree, international market growth). Upon connecting to my hotel’s wi-fi, I also noticed that my Apple device immediately began running Google.fr and that many, though not all, of the businesses in France run advertisements for websites using the .FR country-code top-level domain (ccTLD).

Wine BottleWhen surfing the web in Paris I was also introduced to the French version of Amazon, http://www.amazon.fr. Given that its application for .AMAZON was recently recommended for rejection, Bezos’ company will have to continue to use ccTLDs like .FR. The rejection recommendation could only have come as welcome news to the French government, which is currently battling the Internet giant over taxes and also accuses the e-retailer of being “destructive to bookshops.” After visiting the famous Shakespeare & Company bookstore, I can certainly understand the appeal of tucking into a small, independent bookstore on a rainy day in Paris (then again, guess where I purchased my travel books for my trip? … Amazon.com, of course).

Eiffel TowerFrance’s attempts to protect cultural mainstays isn’t limited to independent bookstores. The Wall Street Journal recently reported that “The French government is considering a new tax on smartphones, and broadening existing taxes to apply to foreign video-streaming companies, as it looks for ways to keep financing its cinema, music and literature in the digital age.” As the article points out, France’s movie industry, home to some of the most prolific film producers in the world, is already troubled by the rise in online video consumption and the decrease in funding for French movies.

Just as the City of Lights has changed dramatically over the centuries – walls erected and torn down, canals carved, an arsenal turned into a palatial museum  – French culture will likely erect and dismantle an array of rules and laws in an attempt to both accommodate and limit the influence of technology on its traditions of grandeur and creative expression (and, of course, the principles of liberté, égalité and fraternité).

Shakespeare’s “As You Like It” famously ends with an outdoor marriage scene; the characters earn their place in these scenes only after enduring tests and conflicts.  The audience let’s out a sigh of relief and all is right with the world.  And there we have (literary) tradition.

In the modern narrative of our digital lives, however, planning the wedding can be the test and conflict that ends in a relieved bride and groom getting married.

Wedding planning tests just how traditional you and your future spouse are – or rather, how traditional you are in relation to your future spouse.

For example, I’m a big fan of Paperless Post. It’s visually pleasing, efficient, eco-friendly and cost effective. Win, win, win – right? WRONG, according to my fiancé, who – to my surprise – was adamantly against using digital invitations in favor of “real”, hard-copy, snail-mailed invitations. I gave in on the printed cards, though I did order them online from Paper Wedding Divas, but held my ground when it came to not mailing little rsvp cards and envelopes (the online rsvp was our compromise – I like to think this bodes well for our future).

Digital tools for weddings – especially websites with built-in RSVP portals, etc. – have exploded. It’s big business: there’s online version of the glossy magazine The Knot, online wedding registries like Honeyfund, apps for mobile to replace human wedding planners, and much, much more.  This online wedding universe is likely to continue expanding if or when the application for .WEDDING is approved and the gTLD, launched.  Three companies have applied for the new gTLD .WEDDING: Wedding TLD, LLC, Wild Madison, LLC and Top Level Domain Holdings, LTD. Only one will get it. Since each company has passed ICANN’s evaluation process, these companies – each of which appear, based on the public portion of their applications, to plan on selling domains for a profit if awarded the gTLD – will have to enter into some sort of auction or come to an agreement (perhaps one pays the other two to withdraw, for example).

Given the stakes – that is, the potential for profit in this space – my guess is that the applicants aren’t going to throw in the towel without a fight. As Wedding TLD, LLC pointed out in its application, “Within the United States alone, there are approximately 2.3 million weddings each year, generating over 70 billion dollars in commerce annually.” Fortunately I wasn’t thinking about my contribution to that dollar amount when I recently walked down the aisle – but smart phones and social media apps certainly made it possible for friends and family to post pictures online before I could say ‘I do’.

On a daily basis we’re bombarded with information about ways in which technology can be “bad”: from cyberattacks on critical infrastructure to social media digilantism in the wake of the Boston Marathon bombings, to Craigslist scams and cyberbullying.

Fortunately, for almost every negative example, we are also presented with a truly revolutionary solution or opportunity that’s entirely dependent on the existence of the Internet (which just celebrated its 20th birthday).

A recent article by the Raleigh News & Observer, republished on Pass/Fail, described one of the latter situations:

“In a windowless conference room in a Las Vegas casino, about three dozen people are swishing their fingers across iPads, trying out test versions of new apps and screening for glitches. But these are no Silicon Valley techies in town for one of the city’s massive electronics shows. Many are from far-flung American Indian reservations, and their high-tech devices are serving a decidedly old-school purpose: trying to save their languages from the brink of extinction.”

Google jumped in on the language revitalization movement in a big way about a year ago when it launched the Endangered Languages Project, “an online collaborative effort to protect global linguistic diversity.” What better place than a website to house videos, audio and text of endangered languages from far-flung corners of the globe?

What about a whole top-level domain full of websites dedicated to the community that speaks the endangered language? As noted by tech company owner Don Thornton in the News & Observer article, “Language revitalization advocates say they applaud the new technology, but note it’s just one part of broader efforts that could include mentorship, classes and a community commitment to using tribal languages in daily life.”

But technology could integrate an endangered or tribal language into modern, daily life by creating an online world in which email addresses, social media platforms, blogs, reference sites and e-commerce are in the language as well. A new generic top-level domain (gTLD) – like the “sponsored” top-level domain
created for Catalonia (.CAT) – allows for a community to mirror the physical community and serve the nation, people, region, or culture of its members in a way that individual websites cannot.

The landing page for the PBS series “We Shall Remain” makes an excellent case for a community-run gTLD. The three sections – Language, Sovereignty, Enterprise – would easily translate into the body of a community based-application for .HOPI or .CHEROKEE.  The tribal communities are excellent candidates for closed new gTLDs because a) the United States recognizes domestic tribes as sovereign nations and b) tribes already have a set of codified criteria to determine who is considered a member of the tribe –  “Tribal enrollment criteria are set forth in tribal constitutions, articles of incorporation or ordinances.” When applying for the gTLD the tribes could choose their guidelines or requirements for registering a domain name within the gTLD entirely upon the existing enrollment criteria. Once awarded, the governance and operation of the gTLD would align with the physical tribe’s governance and operation.

As a result, .HOPI would be run by the existing and single Hopi nation, avoiding the challenges faced by an application for a religion practiced in multiple countries by millions of individuals who may have very different ideas about who has the right to own the gTLD.

As an example, the Potawatomi tribe and various bands of the tribe, from the upper Mississippi River region, are already very active online: there are multiple websites with current and relevant content. (For a list of websites currently associated with Native American tribes and/or tribal communities, click here.) Earl Meshigaud, Hannahville, PA
Potawatomi Indian Community,  explained the significance of the Internet to the tribe and the Hannaville Community on its website,

This may not be exactly what our Elders had in mind when they said that it is our responsibility to orally hand down to the next generation the things that we learn so that those coming behind us would have what we have and more…we hope that the ‘memory’ of the computer (wzhobontakchegan) world will hold for future generations what we may have otherwise forgotten. Live a good, healthy life because your actions serve as the best teacher – and let the computer assist you in your learning.

FairWinds CEO Nao Matsukata is advocating for ICANN to offer an alternative draft Registry Agreement (RA) for Internal Registries, whose needs are uniquely different from those of new gTLD Registries who plan to sell second-level domain names to the public.

Matsukata’s recommendation – made in a letter to ICANN CEO Fadi Chehadé dated March 27 – is based on extensive experience. FairWinds associates prepared 150 applications for over 50 corporations, have held numerous client discussions about the new gTLD process, and carefully reviewed the Public Comments.

A separate, specific contract could shorten the negotiation process for Internal Registry applicants, thereby freeing up ICANN’s resources to process applications for public gTLDs. Matsukata believes that this type of substantive change will result in real process improvements for all applicants.

He is also confident that ICANN can modify its current process before gTLD delegations begin.

As Bloomberg BNA reported last week,“Though the turnaround time on new contracts at ICANN is typically not quick, it might be possible for ICANN to publish a new contract in keeping with its current timelines, Matsukata remarked.”