Retailers shift their ad spending from TV, radio and print ads to digital ads.
Retailers face potentially heavy costs if a proposal for changing Internet address rules goes through. What's worse, they likely would get little or nothing from their investment.
This week’s launch of the .co domain brings to mind the possibility that retailers could before long be faced with deciding how to deal with many more top-level domains in addition to the ones we all know, such as .com, .gov, .edu and .org. That’s because ICANN, the organization that oversees the Internet’s addressing system, has been considering—for a few years now—a proposal to dramatically increase the number of top-level domains. Advocates think it would be great if cities could have domains like .nyc or .london, enthusiasts could navigate to .music or loyal customers of retailers could shop at web sites that end with .amazon or .bestbuy.
ICANN has not yet approved the concept in large part because of the opposition of retailers and other large corporations. Those companies realize they would have to pay hefty fees to many domain registrars to protect their brands. Amazon may not feel the need to create an amazon.rome site, but they don’t want anyone else using that URL to market to shoppers in Italy’s capital. Given that there could be many new top-level domains if this proposal is approved, the fees could add up.
Just this week, online retailer Overstock.com announced it had paid $350,000 for the domain name O.co, making it one of the first to take advantage of the new .co domain. Overstock had its own reasons—as it moves to sell a broader range of merchandise and not just excess inventory, it’s trying to rebrand itself as O, a name that doesn’t say overstocked goods the way Overstock.com does. Chances are most URLs would not be so costly.
But why pay anything when these new domains have no reason for being? This may have been a good idea a decade ago, but now search engines make it obsolete. If someone in Rome, or anywhere else, wants to find Amazon, all they have to do is Google it. You’ll get to Amazon.com, or a local version of it, such as Amazon’s European gateway to its British, French and German sites. If your musical interests runs to jazz, hip-hop or a particular artist, all you have to do is search for your interest and you’ll get all the options you need. I don’t think a .music domain would make your life easier.
The only beneficiary would be the domain registrars that could charge fees for the new Internet addresses. Not surprisingly, they’re the ones behind the proposal to allow new top-level domains. But I’ve yet to hear a coherent argument why a retailer would support the idea. Retailers have plenty of better ways to spend their money.