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The "secret" reason why big brands
will buy their own new gTLD

Last week there was an interesting seminar in Stockholm about the new top level domains (gTLDs) that will be open to application early 2012. Participating were representatives from all sides: registrars, registries, ICANN, trademark lawyers, brand owners and domainers.

I got to talk to some of them and here are my thoughts on how big brand and trademark owners will and should act. (We at Markify have no financial interest in the new gtlds.)

Three categories of gTLDs

First a bit of background:

From January 2012 anyone can buy their own tld, http://newgtlds.icann.org/ The fee for just buying the tld will be $185.000 plus $25.000/year. The cost for marketing your new tld will of course be much higher.

The three main categories that will apply for a new tld seems to be:

1. Geographies/Communities: .nyc, .moscow, .gay
2. Generic words: .bank, .poker, .shop
3. Brands: .facebook, .hitachi, .canon

Number 1. Geographies and number 2. Generic words will both try to sell domain names in one way or another.  But number 3. Brands is a very different category, with a very different agenda. What will they do and why?

The one big reason to buy a tld for a trademark owner

Why should a brand owner even consider buying a new gtld? The core sales pitch you can hear focus on two aspects:

  • A short and attractive url – .SQUARE instead of SQUAREUP.COM
  • New marketing possibilities – DRIVE.BMW instead of DRIVE.BMW.COM

I think most owners of big brands will think: “Why bother? I don’t need that. I already have the url I want and I’d rather spend that money on something else.”

True, but my guess is that they will reconsider and actually try to buy the new tld. Why? For one big reason:

You don’t want anyone else using your brand as a top level domain.

Some trademark holders, with really famous, well-known trademarks, will be able to stop others from getting the tld. But most trademark owners will not be able to stop an application, because they don’t have all the trademark rights (all classes, all markets). The only certain way to stop it will be to buy the tld yourself.

What you should do: 3 cases

In short: If you can afford it - both the fee and the future marketing costs - you should buy your own tld. But for a couple of different reasons.

Case 1 - “Facebook”
You own the relevant .com and there are no other identical big brands competing for the new tld.

To-do: Buy the new tld primarily for defensive reasons. You don’t want anyone else to own it.

Case 2 - “Apple”
You own the relevant .com (like Apple Inc does) but there are other identical brands (like Apple Records) competing for the new tld.

To-do: Buy the new tld primarily for defensive reasons. You don’t want anyone else to own it and in the long term there might be advantages using it.

Case 3 - “SAS”
You don’t own the relevant .com, like Square, SAS (the airline), Next (many) etc. This group is highly motivated and they are the dream clients of the "helping-you-get-the-tld-you-deserve" industry.

To-do: Try to buy the new tld to get an attractive url. And be prepared to invest heavily in marketing your new domain.

The .com vs new gtlds

For the foreseeable future, 3-5 years, I believe the .com will continue to be the prime real-estate online. The new top level domains will form a new, second rate domain class, just below the .com domain.

Why? Because most big brands, that already have the .com, will not bother to invest huge amounts in teaching people a new url. Even if the url is shorter, it still is a change of address. And as long as the big brands stay on the .com with their main sites, it will continue to be the prime address.

Benoit Fallenius Founder and CEO

In this blog I will mostly write about two subjects:

1. Trademarks, domain names, naming and branding - Four separate areas that often are not that separate.

2. Markify news - Features, markets, pricing, challenges etc.

Feedback and questions are always welcome. Email me at benoit@markify.com.