In its second-largest acquisition, Amazon buys the company for $970 million.
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Wal-Mart's intention to keep use of .grocery for itself illustrates how e-retailing could change depending on who wins control of new top-level domains. Retailers must be ready to react, Matsukata says. The way e-retailing changes, or if it does at all, will depend on how the first companies to own the new gTLDs use them. For example, big brands like Nike (.nike), Tiffany (.tiffany) and Wal-Mart have considerable market power, he says, and if they begin advertising their .nike or .tiffany addresses consumers might start using them right away. "But they may never make that investment," he says. "If that's the case, there may never be a high adoption." Neither Nike nor Tiffany responded to a request for comment.
While companies of Wal-Mart's heft can bid for top-level domains, most retailers will be looking to buy new second-level web addresses from owners of these new domains. Today a .com address bought from a registry typically costs less than $15 annually. Even if the new addresses are in the same price range, the total bill might add up if retailers and brands decide they must buy numerous web addresses to protect their brands. For example, a major brand like Nike may want to acquire URLs seemingly unrelated to its product category, such as Nike.camera, just to keep others from misleading shoppers into thinking it's a Nike-operated site.
Buying up all those addresses could be expensive if there are scores or hundreds of new top-level domains, warns David Weslow, a partner at law firm Wiley Rein LLP who focuses on trademarks, copyrights and domain names. A retailer that decides it has hundreds of addresses to corner—perhaps ourcreamer.coffee, ourbeans.coffee, ourmugs.coffee, etc.—may have to invest thousands of dollars annually to accomplish that.
One of the first new gTLD owners, .Club Domains LLC, which as of June 6 owns .club, plans to keep the domain priced competitively with .com, says Jeffrey Sass, chief marketing officer. He says he expects retailers will be among those who want a .club address, as many of them already use the term to describe their loyalty programs. ".Club would make sense for where they target those programs [on the web]," he says. "Their customers and fans can gather there."
To help spur early adoption of the domain, the first batch of .club web address buyers will have access to .Club Domains' founders' club. Sass says those buyers will be provided with information to help them use and promote the .club domain in their businesses.
Such a new domain lends itself to social sharing, says Terry Rowinski, chief operating officer of BuySeasons Inc., which operates e-commerce sites for party-oriented brands including BirthdayExpress.com, CelebrateExpress.com and BuyCostumes.com. BuySeasons plans to buy up several domains, in particular ones with the .party address ending, and drive customers to them for specific parts of the party-planning process. For example, the retailer could create Invitations.party, DŽcor.party and Photos.party, perhaps using the last one to encourage customers to share photos of their in-progress events, Rowinski says.
The new gTLDs could also prove useful for affiliate marketing, he adds. For example, BuySeasons could give an influential party planner a dedicated .party web address to help drive traffic to its e-commerce businesses.
"We'll probably need a little bit of time to see what's happening," Rowinski says. BuySeasons won't necessarily fall behind if it doesn't jump on the new domains as soon as they're available, he says, but it might miss the chance to launch a new marketing program in a cleaner way than it could with a less-specific .com address.
One of the many open questions is how search engines will treat web sites that use the new domains. Google Inc. and Microsoft Corp., operator of the Bing search engine, have not specifically said how they might change their algorithms in response to the slew of new web address endings. "Google will attempt to rank new TLDs appropriately, but I don't expect a new TLD to get any kind of initial preference over .com, and I wouldn't bet on that happening in the long-term either," wrote Google search engineer Matt Cutts in a blog post last year. Google and Microsoft both declined to add further comments.
Niraj Shah, CEO of home goods e-retailer Wayfair LLC, is certain that no matter which new gTLDs hit the web, Wayfair's current brand web sites will continue to appear high in Google search results as Wayfair continues to enhance them in ways that draw more traffic, he says. He also contends that .com will remain the most common default address ending in the United States. "While I think the top-level domains are an important thing to watch, they will have a limited effect on online retailing," Shah says.
But experts say one key benefit of introducing the new domains is to make web addresses more relevant to consumer queries in search engines—a known factor in how search engines rank results. "While speculative, I think it's reasonable to assume that SEO value will be ascribed to the right of the dot more as it becomes more relevant to the content of the web site," says Jim Rogers, vice president of marketing for enterprise services at Neustar Inc., which is helping retailer clients, including Amazon and Netflix Inc., apply for more than 100 gTLDs. "Today with a .com, .net, etc., it doesn't necessarily reflect the web site in any way."
With specific brand, topic or product names to the right of the dot, he says search engines could assume that when a consumer types in "couch," for example, a ".furniture" web site is likely to be relevant. On top of that, if the owner of .flowers ensures that retailers that don't sell flowers can't buy a .flowers address, for instance, it provides another layer of verification for consumers that the sites they're visiting are what they purport to be, he says.