The Internet Corporation for Assigned Names and Numbers (ICANN) has opened the door to the creation of new generic top-level domains (TLDs). Now, in addition to the 22 existing TLDs ranging from .com to .uk, any terms can be chosen for a TLD, although these new domains will not be available until 2013. So, in a couple of years, be on the lookout for Web sites like kim.kardashian or cool.music.

It’s still too early to say how the new ICANN ruling will turn out, but for now, I see both good and not-so-good aspects.

The good:

  • Freedom. Choose any name you want, provided it’s not trademarked, no one else beats you to it, and you can afford to pay for the domain and run it.
  • Flexibility. The ability to use characters other than ASCII text, including non-English characters such as: Chinese (Zhongwen), Japanese (Kanji, Syllabic, Hiragana, Katakana and Romaji), Arabic, Cyrillic and others.
  • Trademark protection. Stronger ICANN trademark protections, including arbitration for disputes pertaining to generic TLDs, the right of first refusal for companies that own a trademarked name or term, and a new system to rapidly dismantle domains that are abusing a trademark.

    • The not so good:

    • Price. It’s not cheap to register a domain. It costs $185,000 to register, and another $25,000 for each annual renewal. There are also potential ICANN administrative fees, the inevitable legal fees and potential arbitration fees in the case of a dispute – estimated at $2,000 to $8,000 for simple cases and in the hundreds of thousands for more complex cases.
    • Staff demands. Next are the internal costs in terms of the staff time required to develop and submit a detailed business plan, go through a long approval process, manage and operate the new domain (requiring skills in marketing, legal, finance and IT) and wait for more than a year for the domain to be operational, if approved.
    • The “deep pockets” factor. The new ruling opens the door to increased trademark infringement via the Web and, when it comes to arbitration over generic TLDs, it appears the deepest pockets will be the beneficiaries. If multiple parties are vying for the same term, arbitration will be held (for a fee), and the winner will be based on merit, as determined by ICANN. Barring a clear decision, the name will be auctioned off to the highest bidder.
    • TLD and SEO don’t mix. Search engines ignore the TLD when ranking search engine results, so don’t get your hopes up concerning search engine optimization (SEO) efforts.
    • Slow process. The process will not be fast, so no benefits will be realized until 2013.

      • The key issue is the effect that ICANN’s recent move may have on brands. In most cases, there’s no need to rush into creating generic TLDs, particularly for companies that either cannot afford the cost and effort to maintain their own domain or would struggle to do so. For large firms with strong brands, particularly those that have already had legal issues regarding their domains, leveraging the generic TLDs to protect the brand makes sense. Firms that are not in the same brand recognition category as Nike, IBM or Ford must determine if a real competitive threat or quantifiable opportunity exists. In either case, a cost/benefit analysis should be done — comparing the expense and potential ROI of a generic TLD to other marketing initiatives.