In its second-largest acquisition, Amazon buys the company for $970 million.
The leading e-retailer has applied for 76 new top-level domains.
The world’s largest e-retailer, Amazon.com Inc., has applied for 76 new Internet address endings, according to a list revealed today by the Internet Corporation for Assigned Names and Numbers.
The group, commonly called ICANN, says that more than 500 organizations in 60 countries collectively applied for 1,930 generic top-level domains—the terms after the final period in a web site address.
Those organizations include Google Inc., which has applied for 101 address endings, including .google, .youtube, .music, .android, .boo, .and, .dad, and .new. Amazon, which is No. 1 in the Internet Retailer Top 500 Guide, applied for such names as .amazon, .app, .author, .book, .buy, .news, .cloud, .dev and .music. Amazon declines to comment.
A top-level domain is the term that follows the final period in a web address, such as .com, .org and .gov. There are now 21 top-level domains, and 250 country code domains such as .uk, .fr and .au. ICANN’s plan is to allow companies and other entities to acquire and operate many new top-level domains with a range of potential marketing benefits. A camera company could own the .camera domain, for example. A retailer could create its own domain, such as .Macys and create web addresses such as dresses.Macys and furniture.Macys.
ICANN is the non-for-profit organization that coordinates the names and numbers that make up Internet addresses around the world.
Some 230 domain names were requested by more than one party; those names include .shop, .buy, .cars, .coupons .play, .book, .video, .wine, .art, .vip, .golf, .home, .store and .app. The last, .app, had 13 applications.
During the evaluation process, ICANN will review cases in which more than one party has applied for the same name in a special procedure and pick which, if any, will be allowed ownership of the domain. Or, as the organization says on its web site, “Applicants always have the opportunity to resolve contention by a mutually agreeable settlement amongst themselves.”
Retailers and other organization now have 60 days to comment on the applications and roughly seven months to formally oppose them before ICANN begins processing and assigning new domain names. Each application a company filed cost $185,000 for evaluation by ICANN.
“This is bound to have negative long-term implications for those small- to mid-sized Internet retailers who lacked the amount of capital needed to be in the game,” says Abe Garver, an investment banker who follows e-commerce companies. “I predict the new domains will radically change organic search results and further swing the advantage from the haves to the have nots—not just in the U.S. but around the world.”
Retailers that don’t want to risk being boxed out of a domain space—for example, .shoes (one application) or .shop (nine applications)—should look at the list and see if their competitors have applied for any extensions that could hurt their own businesses, in which case they should decide to formally oppose the application or not, says David Weslow, partner at Washington D.C.-based Wiley Rein LLP who focuses on trademarks, copyrights and domain names. Many businesses applied for the domain names defensively, trying to lock down words associated with their products, services or brands. “Your ability to engage in dialogue with that company is limited, maybe a few months,” Weslow says.
ICANN plans to announce evaluation results before the end of the opposition period, he continues. That way, businesses can wait and see if it decided to reject an application before taking on the costly legal work to fight it themselves.
However, Weslow says ICANN is notorious for delays and not sticking to timelines. The organization took six years to get from the initial proposal of introducing more domain names to opening for applicants in 2011, during which the application requirements changed numerous times. If ICANN doesn’t conclude who it plans to reject until two weeks before the opposition period closes—which Weslow warns is possible—businesses, including retailers, won’t have time to build a legal case against those decisions, he says.
Retailers will still have an opportunity to buy up Internet addresses defensively even after the new domains are assigned, but they will come at a price. The company or organization that wins ownership of a domain name will have applied for one of two types of domain name registries: either they will own outright all addresses ending in .shoes, for example, or they will be able to sell addresses using the extension on the second level to other businesses at a price they set. So, for example, Zappos might be able to buy zappos.shoes from Binky Galley LLC, which applied for .shoes, if ICANN approves Binky Galley to own the domain with such a registry.
The owners of.xxx, which was won in the last round of applications in 2004, have been selling addresses with the .xxx extension for $200 each since then, Weslow says. So a retailer who decides it has hundreds of addresses to corner—perhaps ourcreamer.coffee, ourbeans.coffee, ourmugs.coffee, etc.—may have to invest hundreds of thousands of dollars to accomplish that.
ICANN says it will process applications in batches, starting with 500, then reducing to 400 in subsequent groups, and each application will take at least nine months to evaluate; Weslow estimates it will take nearly four years to get through all 1,930 applications. Then ICANN is obligated to provide the U.S. government with an evaluation of the program that will take at least a year to complete. So altogether it could be at least six years before another round of generic top-level domain applications begins. Given this infrequency of rounds, Weslow concludes that companies that win a new domain can expect around a 10-year monopoly on it, at least.
On the plus side for retailers, adding so many new domain names could offer new opportunities for relevancy in Internet names. “The .com right now has zero significance—you could be a hospital or you could be a jeweler,” Weslow says.