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Walmart, Safeway, Amazon Share Same Domain Strategy: Mine, Mine, Mine

March 13th, 2013

What is clear is why there’s this explosion of TLDs. In a word: money. The Internet Corporation for Assigned Names and Numbers (ICANN), which hatched the pick-your-own-TLD scheme, thought it might get a few hundred applications. Instead, it got 1,930 and has already collected $185,000 for each one. Not bad for a “product” that costs nothing for ICANN to produce (in fact, ICANN didn’t even have to dream up any of the names it sold).

Meanwhile, money has driven the rest of the process, too. Amazon and Google each spent more than $10 million on applications. In some cases, they’re clearly targeting each other: Amazon applied for .search and .play, while Google filed for .book and .shop. Another huge applicant calling itself Donuts Inc. has spent more than $50 million applying for more than 300 TLDs. It intends to sell domain names.

Is anyone actually going to get a return on that investment? Are Internet users—and, particularly, E-Commerce customers—actually going to go looking for .books or .tires sites? (Incidentally, Goodyear [NASDAQ:GT] and Bridgestone are each trying to take .tires private, while Donuts wants to sell .tires domains.)

Out of 246 million currently registered domain names, 105 million end in .com, 14.9 million end in .net and just under 105 million end in one of the 280 different country-based TLDs (including .co, which is actually the country TLD for Colombia). Consumers have been well trained to expect .com. Previous TLD expansions haven’t made a dent in .com’s dominance—the most successful is probably .biz, with a few million registrations.

How likely is it that .book—owned by Amazon or anyone else—will have an impact? Barnes & Noble (NYSE:BKS) owns both book.com and books.com, which both redirect to the chain’s own site. That doesn’t seem to have given B&N much of a monopoly.

Until now, the big concern for retailers has been that they would have to spend triple-digit sums to buy their domain names all over again as TLDs, or chase away domain-squatters in hundreds of new TLDs. In 2011, the National Retail Federation predicted that chains would have to fork over $250,000 per TLD, plus another $50,000 to $100,000 a year afterwards, just to nail down their brands. Fighting off challenges and cybersquatters could jack up that cost into the millions.

Today, that’s a little hard to believe, especially because so many E-Commerce players have declined to go near vanity TLDs. Kroger, Walgreens (NYSE:WAG), CVS (NYSE:CVS), Rite Aid (NYSE:RAD), Lowe’s (NYSE:LOW), Costco and even eBay (NASDAQ:EBAY) couldn’t be bothered to pay again for their own names. On the other hand, JCPenney (NYSE:JCP) and Best Buy (NYSE:BBY) did. Maybe that’s the ultimate indicator of how good an idea vanity TLDs are.


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