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Domain Name Land Grab Poses Risks For SMBs

Small and midsize businesses may lose out as ICANN begins to create new top-level Web domains. But you can take steps to protect yourself and your brand.

Small and midsize businesses (SMBs) stand to get squeezed out in the next Internet land grab, which is coming soon to a browser near you. But the smart ones will take steps now to protect their digital real estate.

If you missed the news, you're probably not alone--it broke as the dog days of summer began filing in. The quick version: The Internet Corporation for Assigned Numbers and Names (ICANN), the non-profit group that governs the vast universe of Web domain names, is accepting applications to create custom generic top-level domains (gTLDs). Today, domain name registrants pick from one of 22 gTLDs--with ".com" as the gold standard for most websites. When ICANN reveals the list of approved applications, it's likely to include a much larger number of brand and industry-specific gTLDs, like .[companyname] or .food.

Small businesses, especially, aren't going to wield much influence in the process. The reason: ICANN's price tag on an application excludes any organization without deep pockets. You have to pony up $185,000 to apply for a new top-level domain, so the future landscape will be largely determined by larger enterprises that have big bank accounts and cash to spend.

"Certainly, companies that are well-capitalized have an advantage," said Gretchen Olive, director of policy and industry affairs for Corporation Service Company. "Small businesses are at a disadvantage for applying for one because of the cost."

Some midsize firms might find the expense worthwhile, but that's a hefty chunk of change for what amounts to a paperwork fee--particularly in a global economy that continues to stumble. That cash could fund new hires, research and development, or simply a slow stretch of business, among other things. But even if they can't afford the stakes to sit down at the table, SMBs should plan ahead for the new menu of gTLDs--which is likely to include a range of new choices accessible to the public. Doing so can help protect corporate assets and seize new opportunities. Those that don't face some significant risks. Olive highlighted three key dangers to keep in mind.

First, though it will likely take some time to play out, the new domains will impact search engine optimization (SEO) efforts. Olive noted that while none of the major search engines have indicated any changes in the works as a result of the new domains, that doesn't mean they're not coming--today's page one result could be tomorrow's page five. "There are a lot of people in the industry who think that after a year or two of these new gTLDs being out that we may start seeing search engine algorithms and results be influenced," Olive said.

Indeed, in its frequently asked questions, ICANN said: "The increase in number of gTLDs into the root is not expected to affect the way the Internet operates, but it will, for example, potentially change the way people find information on the Internet or how businesses plan and structure their online presence."

Another, related, potential pitfall is consumer confusion: If the .com stronghold eventually wanes, online brand recognition could become more of a guessing game. "When we start seeing things like .sports or .nyc, there will be a lot of confusion," Olive said. "Small businesses have a risk of getting lost in the shuffle."

The third risk particularly affects new businesses or new product lines: As options grow, what--and how many--domain name(s) should you register? "Before, the number one choice of everybody was .com, and I think that will [remain the case] for some time," Olive said. "But [SMBs] are also going to need to be looking at these new domains and figure out where it makes sense for them to grab some real estate. That could rack up some big dollars due to quantity, with a lot more choices out there and no one really knowing which ones will be successful and which won't."

Fear not: SMBs don't need to cry in their online soup. Olive offered up several bits of advice for firms that want to stay on top of the coming changes. SMBs "need to look at their company name and key product names and look at going through the trademark process," Olive said. "It may give them a leg up in some of these sunrise launches." By that, she means the fact that when new domains are issued, companies with trademark and other legal rights to particular gTLDs will get first dibs on registration before they're made available to the public.

Also, consider where you register your domain names. Olive notes that "retail" registrars that target individuals might offer bare-bones information to clients--which could correspond with lower pricing--whereas others will actively apprise customers of changes that could affect their business or brand.

Finally, keep informed: Keep tabs on ICANN's website for updates on the new gTLDs. "They will have a status of all of these applications and when they will be launching," Olive said. "That's something [SMBs] should keep their eye on."

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User Rank: Apprentice
11/1/2011 | 9:34:59 AM
re: Domain Name Land Grab Poses Risks For SMBs
Great article!!!!
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