The .gift that keeps on .giving

Contended new gTLD strings - Could this be a summer of domain heavyweight boxing like we have never seen before?

For those of you wondering how the issue of multiple applications for the same new gTLD string will be resolved, then now is the time to keep an eye on the domain name press.  Each applicant for a contended string (and remember there are approximately 230 such applications) can opt to try and negotiate a solution, or simply go to an auction where the winning bidder wins the right to run the TLD.

Last week six of the strings that are in contention went to an auction. Whilst the winning bid per string has not been revealed (yet), we do know that over $9 million was raised through the total winning bids.  The strings in question, .club, .college, .luxury, .photography, .red and .vote were relatively small auctions with only two parties involved (three in the case of .club).  However, with the potential for some bigger action coming soon involving Google, Microsoft and Amazon, the chairs are being drawn up around the ring for potentially a battle of the wallets.

Of course, mediation and negotiation might be the favoured option for many applicants in contention, but with five, six or even more applicants for strings such as .app or .play, the prospect of months of negotiations is not a prospect anyone really wants to see, that is of course apart from the IP lawyers who represent the brands.  So it is inevitable that some of these applications will end under the gavel.

So who are the winners in this process? Certainly not the losing applicants. Whilst they will get a fair chunk of their initial applicant fee of $186,000 back, they will still have paid for administration costs in making their application as well as potential investment into the readiness to run a gTLD.  On the flip-side, some of the winning bidders will have now paid significantly more for their new internet real estate than originally thought.

If both parties decided to use a private auction then at least the losing party will get some return (the winner only pays the second highest bid, with that amount, less an administration fee, being returned equally to all other parties), although if they decide to go direct to ICANN to run the process, the lords of the internet keeps the winning bid, adding to the millions still in the bank from the initial applicant fees.

With the launch date of the new gTLD program drawing ever closer, the onus is on all applicants to sort out those contended strings as quickly as possible so that all other technical and legal aspects of their applications can be approved.  For those of us on the outside looking in, this could be a summer of heavyweight boxing like we have never seen before.


Written by Stuart Fuller, Director of Commercial Operations and Communications, NetNames

21 June 2013