In its second-largest acquisition, Amazon buys the company for $970 million.
The plan calls for new domains that reflect brands, but which will be costly.
U.S. lawmakers and bureaucrats this week called on an international Internet oversight group to move slowly on a controversial plan to change the web’s addressing system—a plan that already has attracted criticism from digital marketing groups, and which could bring new expenses to online retailers.
Internet Corporation for Assigned Names and Numbers, or ICANN, manages the addressing system. In June, ICANN approved a plan to allow companies and organizations to apply for new top-level domains in addition to the 22 domains already in existence, such as .com, .gov, .org and .net. Under the new plan, retailers and manufacturers could create or buy domains that reflect their activities. For instance, a camera company might want to use the .camera domain, or a subdomain that includes .camera. A company could use its own name as a domain, as in books.Amazon or clothing.Macys.
Application fees for the domains run $185,000 each; retailers interested in registering subdomains, such as Nikon.camera, would be much lower, perhaps a few hundred dollars, experts say. However, if the number of top-level domains expands dramatically, those sub-domain fees could quickly add up for companies that want to control a wide range of web addresses.
“If ICANN is determined to move forward, it should do so slowly and cautiously,” said Sen. Jay Rockefeller the Democrat from West Virginia who chairs the Senate Commerce, Science and Transportation Committee, which held a hearing this week on the matter. “The potential for fraud, consumer confusion, and cyber-squatting is massive and argues for a phased-in implementation.”
Jon Leibowitz, chairman of the Federal Trade Commission, also criticized the plan, under which ICANN will accept applications for the new domains between Jan. 12, 2012, and April 12, 2012. “We are very, very concerned that the rollout of the new domain names has the potential to be a disaster for consumers and businesses,” he said. “We see enormous costs here to consumers and businesses and not a lot of benefit.”
What lawmakers can do to slow the ICANN plan is unclear; no lawmakers gave any solid idea about how Congress could stop the plan. As well, groups that oppose the new system have only been able to lodge complaints, which have yet to force any major changes to ICANN’s plans. ICANN expects at least 1,000 applications for the new domain names, said Kurt Pritz, ICANN senior vice president, today during the hearing.
The plan has found support among some groups, including NetChoice, a collection of trade groups, e-commerce operators including eBay Inc. and Overstock.com Inc., No. 27 in the Internet Retailer Top 500 Guide, and other organizations, including Facebook.
“While not perfect, ICANN's plan to expand the domain space is a critical step forward for the Internet," said Steve DelBianco, the group’s executive director. "Managed properly, the new program should increase competition, expand user choice, and make the Internet far more useful to hundreds of millions of users worldwide who read and write in alphabets other than Latin."
He says the domain name effort will encourage more domain names in such scripts as Hindi, Arabic, Chinese, Japanese and Hebrew, allowing more consumers to access the web using their native languages.