Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
With Internet domain name registrations expected to hit 500 million in the next several years, demand for web site names will outstrip what’s available on general, top-level extensions like dot-com and dot-net. So new suffixes will be launched-recycling an old problem as cyber squatters race to register those of interest to prominent Internet players, to be sold later at inflated prices.
That raises a question for leading companies, including e-retailers, who now function in a still-largely dot-com world: If you’re Target.com, for example, how far will you go to protect your brand name by registering it with new domain extensions as they become available?
In September, the application period for new, top-level domain extensions closed at the International Corporation of Assigned Names and Numbers, the governing body that oversees the assignment of domain names. It’s expected to review applications and assign as many as 10 new general, top-level domain names by year-end. But these won’t be the only new domain names soon to appear on the web. Each country has received a domain name from ICANN. Some countries with suffixes having market potential beyond their borders have assigned distribution rights for the names to others.
Take the island nation of Samoa. Once known as Western Samoa, it got the domain name dot-ws-which suggested the easy-to-remember association of “web site” to a U.S. registry company. That company, now known as Website.ws, based in San Diego, struck a deal with the Samoan government to sell the dot-ws extension to companies. Website.ws now is the ICANN-sanctioned registrar that distributes names under the dot-ws domain. The company said in October that it would reserve the rights to all dot-ws domain names of Fortune 500 companies-as well as the top 200 Internet companies-for registry by those companies for a period of 90 days. After that, the names will be released for registry to the public.
That means anyone-say, a hypothetical family named Nordstrom in Topeka, Kan.-could register a web address identical except for a suffix of a few letters to that of a trademarked brand, a potentially confusing situation at best. Website.ws, which charges an annual $35 for each name registered, calls the 90-day period a protection window that gives companies a chance to avoid potential litigation with cyber squatters.
1800flowers.com and Yahoo have acquired the .ws versions of their names. Others, like Nordstrom, are passing on the offer. Still, top domain names continue to be big business-the most expensive so far being Business.com. Santa Monica, Calif.-based eCompanies, a venture capital firm, bought the name last year for $7.5 million, reports Greatdomains.com, Los Angeles, a dealer in secondary market domain names. The winner in that transaction? The seller, a Texas speculator who had paid $150,000 for the name.