ICANN’s New Domain Names and What It Means For Small Business

When the new online domain name expansion takes effect, web addresses will have major changes and small companies foresee higher costs and reduced profits.

This could likely happen as the Internet Corporation for Assigned Names and Numbers (ICANN) is set to push its plan to add up to 1,000 new top-level domains to the existing popular line-up which includes the .com, .org and .biz in the coming year. However, the business groups to which the National Retail Federation (NRF) and the Association of National Advertisers belong predict that the planned expansion may just stimulate increased bills.

This is not far from happening, particularly for firms who might see this as an opportunity to keep up with the increasing competition in the virtual marketplace or as a chance to steal the brand names and trademarks from the hands of people and original owners and sell them at a much higher price or by creating confusion among consumers.

NRF General Counsel Mallory Duncan commented that the move might not offer small business the capability to catch on if all they can afford are the generalized ones such as the .hardware or .store domains. How will they create an identity for their business and prevent confusion among consumers?

According to ICANN, they expect applications from large companies that use their brand names, otherwise known as vanity domains such as .target or .amazon. It’s also possible for businesses offering registry services to apply for all-encompassing terms such as .florist, .food, .realtor and city names such as .london and .nyc. Domain name expansion promoters are convinced that the new top-level domains offer businesses marketing advantages particularly in making it easier for businesses to guide customers to their site and at the same time, stir up competition among domain registries.

Paying for ICANN’s charge of $185,000 per application along with additional charges for legal and consulting fees, will raise the cost to $250,000 – a top-level domain could be too expensive for small businesses. However, considering how they can be too pricey, businesses might still get interested to buy domain names that carry new generic domains when they begin to hit the marketplace. Thus, “Wheelies” bike shop in New York City may want to buy wheelies.bicycles.nyc.  ICANN added that prices for these new domains will vary.

Having a broader domain name could bring you ahead of the competition. This could mean that domain name expansion may become beneficial for businesses that have the means to buy it and harmful for small businesses who can’t afford it as they may be left behind the competition.

Starting January 12, 2012 to April 12, 2012, ICANN will open online applications for domains to companies who may want to use them. Review of application will take 9 -20 months. No dates yet have been set for future applications.

Have questions on whether this would be right for your business?  Contact us to set up a free online marketing consultation.