From .coffee to .email to .xyz: The Web's crazy new reality is here

Dot-com? How quaint. A smorgasbord of new Net domains has arrived, with hundreds more on the way. There's opportunity aplenty, but lots of trademark hassles, too.

ICANN, which oversees many fundamental Internet issues, is letting organizations add hundreds of top-level domains like .nyc, .dad, .network and .navy to the Net.
ICANN, which oversees many fundamental Internet issues, is letting organizations add hundreds of top-level domains like .nyc, .dad, .network and .navy to the Net.Photo by screenshot by Stephen Shankland/CNET

Heather Parker is a technically savvy businesswoman. She has her own Heather Parker Photography Web site, she knows about social media and search-engine optimization, she publishes examples of her work on Yelp.

But she didn't know about one of the biggest changes happening right now: a massive expansion of Internet address domains beyond the well-known .com, .net, and .org. If she wanted, she could move her Web site to heatherparker.photography today.

"I didn't know .photography was something I could register for until now," Parker said. She's not going to, because clients likely wouldn't know what it meant if they saw it on a business card, she added.

That lack of awareness is one challenge facing domain-name expansion and the non-profit organization behind it, the International Corporation for Assigned Names and Numbers, or ICANN. Another is a rat's nest of global trademark complications as companies try to protect their brands on hundreds of new Internet domains.

One example: Two Merck pharmaceutical companies, one with rights to use the name in the US and Canada and the other with rights in the rest of the world, are fighting in court over the .merck domain. Another: a UK company called Yoyo.email has registered hundreds of .email subdomains with others' trademarks, including dunkindonuts.email, budlight.email, sheraton.email, lufthansa.email, eharmony.email, footlocker.email and ebaysupport.email.

But the new domain names are here to stay, and businesses and consumers must adjust to the new reality. ICANN approved hundreds of the 1,930 applications for the new domains, with 417 on the Internet already,

The .com suffix had special meaning for the first generation of Internet users. For children born this century, it'll be just one fish in the sea.

And there will be plenty more fish coming. Another round of applications likely will open up by 2018, said Akram Atallah, president of ICANN's global domains division. That next round will be one subject of discussion at an ICANN meeting this week in Los Angeles -- along with what ICANN should do with the millions of dollars it's garnered so far from the program.

More fish

What are some of the other domains? There are brand names like .ibm, .youtube, .axa and .bmw. There are geographic names like .paris, .budapest and .berlin. There are business terms like .realtor, .beer, .dentist, .pizza and .plumbing. There are broad terms like .xyz, .pink, .email, .work and .website. And there are many that take advantage of ICANN's expansion beyond the Latin character set: .삼성, which is Korean for Samsung, بازار, which is Arabic for bazaar, and .移动, which is Chinese for mobile.

As ever, when there's change on the Internet, there's someone there to profit from it. Perhaps the highest-profile is a startup called Donuts, backed by more than $100 million from investors to run a new business doling out subdomains to businesses in dozens of categories. It'll take some time to educate the market, said Dan Schindler, the company's co-founder and executive vice president of sales and marketing, but eventually businesses will see the new domains simply as a way to instantly signal to customers what they do.

"We view these as better than .com, which is meaningless. They're short, specific, and meaningful," Schindler said. The numerous brands embracing the new domains will teach people about the new era, he added. "When you see 3series.bmw and 5series.bmw appear on TV screens and billboards around the world, it'll drive awareness [a website] doesn't have to end in .com."

People have registered more than a million addresses that use Donuts' top-level domains, the company said Monday, with the millionth being heavenly.coffee. That's a small fraction of the 1.03 billion Web site in existence, according to monitoring firm Netcraft, but new domains have been available for just under 12 months.

ICANN expanded the domain-name pool "to provide more choice, competition and innovation," Atallah said. The choice and competition is visible today, but the innovation will become more visible when big brands like Apple jump aboard.

"If you're applying for .apple, the way you use it should be innovative. It's defining how you present yourself online," he said, and it comes with an "authenticity factor" that guarantees to customers that they're at the the right place.

How do domains work?

In the Internet's earliest years, addresses ended with one of seven three-letter abbreviations: .net, .gov, .edu, .mil, .int, .org and .com. These suffixes are called top-level domains. To be useful, they need to be accompanied by a subdomain before the dot: stanford.edu, redcross.org.

The initial set of top-level domains were joined by country-code domains like .jp for Japan and .za for South Africa. But often the prime virtual real estate ending in .com was taken, and ICANN tried to expand the system with what are now called generic top-level domains (GTLDs).

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According to figures from GreenSec Solutions' NTLDstats site, .xyz is the most used of the new top-level domains.Photo by NTLDstats

ICANN oversees the master list, but many others are involved. Organizations called registries oversee the supply of subdomains for each domain; for example, Verisign operates the .com registry. Next down the hierarchy are organizations called registrars that actually register the domain names on behalf of the people who want to use them.

Here's an example of how it works. If Main Street Florist wants to set up business online, they can pay a registrar like GoDaddy to register mainstreet.florist, with prices sometimes less than $20 per year but sometimes more than $100 annually. A portion of that registration fee flows back to the registry -- in this case, Donuts, which operates the .florist registry.

Registries pay ICANN for the privilege. Each of the 1,930 new applications to operate one of the new GTLD registries came with a $185,000 application fee, and running the registry costs $25,000 a year on top of that. Atallah said he expects fees to go down when ICANN opens the second round of GTLD applications later this decade.

In this round, costs can go and have gone higher, too: when more than one party wants to operate the same registry, ICANN holds an auction and awards rights to the highest bidder. Right now, 402 domains are under contention with multiple applicants, with the highest demand going for the .app registry. Some of this "string contention" is resolved through private auctions, too, in which case ICANN doesn't get any extra proceeds from the auction.

String contention can be expensive. Amazon outbid Google, among others, paying $4.6 million for .buy. And a company called Dot Tech acquired rights to .tech for $6.8 million.

"The purpose of .tech is to provide a dedicated online environment for the technology industry, allowing businesses to create user-friendly access to products, services and information instantaneously through accurate search engine classifications," the company said in its application. It hopes businesses using .tech will become "differentiated online as tech-savvy innovators, product suppliers or service professionals."

Trademark hurdles

Dot Tech is excited, but established brands castigated ICANN's domain-name expansion plans because of new trademark hassles. Companies are accustomed to buying rights to their name on the .com registry and maybe a handful of others like .info, .co and .biz. With hundreds and later thousands of new domains, that's simply not practical anymore, and that raises the possibility that cybersquatters will register a company's name on a new domain. They can set a Web page festooned with ads on it or redirect traffic to a different site of their choosing. And of course they can profit when the trademark holder buys the rights to the site.

The domain-name expansion is "an opportunity for brands...but it's big opportunity for cybersquatters. You're seeing it time and again," said David Taylor, a lawyer at Hogan Lovells International who specializes in domain-name issues. "Brands will be put to a higher cost."

Taylor was a member of a group of experts ICANN convened to try to ease trademark issues. ICANN adopted several of its recommendations. That includes the Uniform Rapid Suspension System (URS) that's designed to be cheaper and faster than the earlier Uniform Domain-Name Dispute-Resolution Policy (UDRP) when brand holders want to contest another party's domain-name registration; a "sunrise" period that lets trademark holders be the first to register their own trademarks on new domains; and the Trademark Clearinghouse that gives trademark holders a central place to register their marks for domain-related purposes.

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The founder of Yoyo.email says his company is no cybersquatter.Photo by Yoyo

For $150 a year, the clearinghouse will notify trademark holders of domains involving their trademarks and validate their trademarks if they're registering them during a new domain's sunrise period. As of September 16, trademark holders registered 32,993 trademarks, and the clearinghouse sent out 111,855 notices of domain-name actions involving those trademarks.

Trademark holders need to be aware of the repercussions of the new domain names, said Peter van de Wielle, the Trademark Clearinghouse's marketing manager. "That's why we're focusing resources on education," he said.

Yoyo.email case

The Yoyo.email case indicates how complicated things can get. The company has been involved with at least 34 URS and UDRP cases involving domain names it's registered that involve others' trademarks. Yoyo.email founder Giovanni Laporta said in correpondence with CNET that he's no cybersquatter -- indeed, that he didn't even know what a cybersquatter was until trademark lawyers came after his business. And he's now fighting some of those cases in court. Here's how he described his business:

Yoyo plans to launch a new email hosting platform, which amongst many other innovative features [has] a certified email service. Yoyo can only guarantee the service if it controls both ends of the email send and receive process. The brand.emails are only used to internally route emails so that all the metadata is captured on our servers. That way ... Yoyo can certify that the email was sent and, in some instances, received. Like certified mail, there has to be proof that someone sent a person to someone's door and put in in the box. The brand.email is just an easy way to route and store the data, invisible to sender and receiver.

Yoyo won't involve Web sites using the domains, and indeed Laporta refused an offer to sell the StuartWeitzman.email domain to shoe and purse seller Stuart Weitzman for $1,000. "Selling any of our <.email> domains will be detrimental to service operation. Selling domain names is not the reason why domain names were registered, so I respectfully have to decline your offer," he said in a letter to the company's attorney.

Regardless of Yoyo's intentions, brand holders have been leery of new domains for years. A presence on the Internet has been an exciting new way to interact directly with customers, but each new service -- email, the Web, Facebook, Twitter, Google+, Pinterest, ad networks, app stores and more -- means another area where they have to worry about their reputation. The value of that brand can be immense. Last week, Apple topped Interbrand's annual survey of brand value, worth an estimated $119 billion.

More fees

In addition to ICANN's official mechanisms for dealing with trademark worries, companies can pay for more protection. For about $3,000, Donuts will block registrations for five years of particular names across its own registries -- but not others' registries.

Another startup, BrandShield, scours new Net domains and other online areas for trademark problems then ranks them for clients. It costs $1,000 a year for small companies but goes up for those with a bigger online presence.

"Our algorithms automatically prioritize the level of risk to give you a rank so you can focus on the ones that really create damage," said Yoav Keren, chief executive of BrandShield.

For her part, photographer Parker isn't racing either to embrace the new domains or to mount new defenses.

"I know people will squat on these new domain names and there will be speculation. I'm not too worried about it," she said. "If it ain't, broke don't fix it."

In the long run, ICANN expects the pain and uncertainty will be worth it -- especially for companies that set up their own branded domains.

"When you are in a general space, everything goes. When you are in a specific space you can present yourself differently," Atallah said. "You have the ability to control your destiny."

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