Will new gTLDs Affect your Business or E-commerce site?

Friday, March 01, 2013

By: Weston Bonnelle

    Imagine the internet without the .com where domain names containing new gTLDs (generic top level domains) such as news.google or newyork.taxi becomes the norm … or even the standard. The online world will get a glimpse of the brand or idea without the .com sooner than they think. ICANN plans to reveal the first set of approved applications in April 2013. The corporations and businesses that are approved may be so eager to demonstrate their technological prowess that they could start unveiling their sites as early as the summer.

    Most small and midsized businesses are completed oblivious to the idea that there could be a major paradigm shift online. Just as the panda updates spun across the web with lightning speed leaving unsuspecting webmaster devastated and sites demolished, new gTLDs could flash across the web paralyzing .com businesses. You may ask “how will new gTLDs affect the internet?” Then you may wonder “how will this impact on the internet influence my business and e-commerce site?” and “Should I invest in a new gTLD?” I wish that I could provide definite answers however it’s too early to get a clear perception with the fog of the ICANN, the flurry of applications and the pressure of speculation. How I do want to offer a myriad of perspectives so that small and midsized businesses can be adequately prepared for any changes.

There’s a possibility that the internet will not be affected by new gTLDs

    The corporations applying for new gTLDs could simply be engaging in defensive brand protection. For example, General Motors pulled their applications for .chevrolet; .gmc; and .cadillac after the deadline closed for new applications. They probably wanted to prevent any trademark violations. Other brands may behave a bit more aggressively and strategically. They may use new gTLDs for a leaner advertising campaign and then redirect the new gTLDs to their main site. For example, it’s easier to advertise a succinct web address such as beauty.covergirl and then redirect that domain name to beauty.covergirl.com.

    Customers may reject the new gTLDs and corporate resistance could suppress widespread use of websites with new gTLDs. Corporations have invested billions into developing .com websites. There are corporations that have purchased generic domain names, such as salad.com, flash.com and eyecare.com, for millions. These corporations will not passively allow new gTLDs to dominate the website. They will fervently compete. Corporations already feel overwhelmed trying to develop a solid mobile strategy. Do corporations really have the stamina to pursue new gTLDs and build engaging websites or will they consider them a risky distraction? (Note: My focus is on the corporate behavior because ICANN priced the applications outside the budget of small and midsized businesses. The action that corporations take, the only possible actors in this ICANN frenzy, will determine how the general public perceives new gTLDs.)

    Most importantly customers may reject websites with new gTLDs or treat them unfavorably compared to .com domains. Customers have a tendency to be slow adapters to innovations that they can’t quite understand. They may adapt to new gTLDs so slow that the impact on the web could be marginal. If customers refuse to adopt new gTLDs then corporations who have wasted their funds will have a negative reaction to them. This will create a hostile environment for new gTLDs and ultimately cause their demise. I also believe that registrars overestimate the amount of internet users that want domain names. Registrars such as Uniregistry and Donuts.co are investing millions into new gTLD applications. However if they can’t recoup their losses, due to the popularity of social media platforms that have reduced the need small business and personal websites, then the lack of registrations could cause the collapse of the entire industry. 

    We also have the possibility that new gTLDs are accepted but .com domains are still widely used by powerful corporations and a significant portion of the business world. Dot com domains may never become a vestigial part of the internet, but instead a permanent and active member. Even though Facebook and email has usurped a majority of communication delivery for Americans, snail mail is still a relevant means of communication. Many people still prefer to pay bills through USPS.  If distinct new gTLDs web applications can quickly be imitated by .com websites then they will not be perceived as extraordinarily innovative. If registrars are able to offer keyword new gTLDs, such as .art & .app, to all users then the allure for corporations could be lost. That's probably why Google is attempting to purchase keyword almost 80 keyword new gTLDs such as .cloud; .mail & .search. Corporations are not interested in the .com on repeat; where spammers and scammers can enter the space without credibility.

    Other corporations and internet users may consider new gTLDs too limiting and defining. For example, .art in theory is a descriptive, meaningful and representative domain for an artist. But does an artist really want to be defined so blatantly and generically? Does a corporation really want to invest $185,000 for a branded new gTLD for each brand that they want to develop? Also, ICANN reveals the applicants and the new gTLDs that they are applying. This is undesirable for corporations that unveil new brands after working in stealth mode. Many corporations don’t want customers to associate new brands with their other brands. Therefore a website such as android.google would not be an attractive option. For example, the .google has the potential to overshadow Android’s blossoming brand and stunt its separate identity. Businesses do not want their brands to be revealed before its time or to be restricted. 

So now you’re probably breathing a sigh of relief. But don’t relax just yet because….
There’s a high possibility that the internet will be affected by new gTLDs

Yes, new gTLDs could the next big online event just like search engines, social media platforms, blogs and startups.

Legitimacy: Right now just about anyone can violate a trademark and register a domain name with a brand. These spammers then use these domain names to masquerade as if they are affiliated with the brand in order to deceive na├»ve web users. This trickery tarnishes brands and causes people to distrust the internet…both are bad for business. Corporations could be relieved that they can now tout their branded new gTLDs as the only authority for their products and services. Their branded new gTLDs will be differentiated from the majority of all websites, increasing the legitimacy of their websites. As more and more corporations and institutions began using .brand instead of .com, the .com‘s image could be considered the less professional, spammy cesspool. The .com will be depleted of status just as soil depleted for nutrition from overuse and abuse. It’s nearly impossible for a seed to reach its full potential in depleted soil.  Over time customers could learn to perceive .brand as the only credible and trustworthy websites. This could have a major effect on budding e-commerce sites that depend on search engine rankings. If customers begin to click on .brand more often in the search engine results resulting in high click through rates for new gTLDs then this could propel these domains to the top of the results... rendering the .com websites invisible.

    In a less dramatic fashion, .com could become archaic, therefore negatively and unfairly affecting the image of businesses that are still forced to use .com. Corporations that want to appear cutting edge will start employing new gTLDs as a status symbol, deepening the online stratification. The gap between the corporations and small businesses could become more apparent and cause online users to gravitate to the sites with more resources even if they don’t have better products or services. This could be the nail in the coffins for new startups that aren’t publicized.

Exclusive Web Applications: If corporations solely use new gTLDs the architecture of their websites could change. Web applications that can’t be replicated by .com websites could arise. If new gTLDs result in better customer experiences then, other businesses that can’t afford new gTLDs will have difficulty competing. Corporations may even have the ability to seep into your web structure and built applications from your services. Small businesses should start thinking about how they can compete with innovative web applications.

Higher Barriers to Entry: When the internet first crept into the scene, the barriers to entry were high but achievable. You simply needed an opened mind to understand the value of the internet, the resources and knowledge to build a website and the business skills to develop a competitive product or service. For a small period of time, domain names were free! This could dramatically change. If corporations are granted ownership for keyword domains such as .boat & .cafe they could block off entry into that space from competitors.  Consequently, the cost for .com domains could skyrocket. The appealing domain names on sale by domainers are already priced too high for small businesses and budding startups, if they raise any higher this could restrict online innovation. If the barriers to entry are too high online, many small businesses and midsized business may remain offline or only use social networking platforms further suppressing their growth.

Flexibility:  Corporations will now have the flexibility and resources to structure their website in any way that they need while most businesses using .com ( or .net, .org, etc.) will still be restricted by their registrars. Once again the corporations will be able to offer web users significantly more which will raise the bar for businesses that don’t have the resources to meet these new standards. These corporations will have more power and representation on the web due to their self-determination and resources.

Some e-commerce websites are worried if keyword new gTLDs will have high search engine rankings than .com. Once again, only time will tell. Think about your strategy and how you can compete if they do. I hope that I was able to provide a thorough overview. I would love to hear your comments!