The DotCom Era is Finally Over

.Com was like the BBC, or Canal 1 or the three American networks: in its day, it encapsulated much of what could be imagined.

It was never comprehensive enough or representative enough, but for a mass market, it was fine.

We are way beyond that now, or think we are. TVs? Pul-leeze. One day desk tops will be viewed behind glass in museums and our descendents will observe them with wonder, trying to understand how a people so limited could have accomplished anything beyond getting up in the morning.

The era of new TLD's - Top Level Domains - has arrived. .Whatever is upon us (not sure if that one has been taken - but you can have it if it hasnt).

The imperative for all this diversity seems to be some sort of advantage whose exact dimensions we can not yet discern. Will it really be such a differentiator? Not clear that anyone knows - or cares. We are consumed with separating ourselves from the so that the pack will then embrace us as one of its own. There appears to be an element of obsessive self-centeredness in all this, a fear that if we dont insist on highlighting our own cleverness, we will forfeit our 15 minutes of fame and all the ancillary rights to...whatever comes with it.

The economics suggest this will soon blow over because we are unable to quantify the value proposition. Time may change that - especially if accompanied by some new technological enhancement that enables the causal connection to cash equivalents.

Until then, this is just another land rush on the frontier. It might pay off, but to extend the real estate metaphor, dont, just yet, sell the family farm and all of its accumulated content. JL

Bill Alpert reports in Barron's:

A new epoch begins this year on the Internet, ushered in by .MOVIE, .BEER, and perhaps, .FAIL. That tired old address suffix—.COM—will finally get some interesting company, as the directory overseers of the 'net let loose with some 1,900 new word-strings to the right of the dot, a prestigious slice of cyber-real-estate known as the "Top Level Domain." Joining the land rush for potentially valuable TLDs—like .BOOK, .MUSIC, or .SHOP—are giants like Amazon (ticker: AMZN) and Google (GOOG), as well as some decently funded start-ups whose sole mission is to build a portfolio of the new domains.

The procedure that will assign the new address suffixes, starting on March 23, was five years in the making at ICANN, the cyberspace directory agency secretly known as the Internet Corporation for Assigned Names and Numbers. "This is a once in a lifetime event," says ICANN's general manager for the new TLD program, Christine Willett.

At the head of the queue will be about 100 of the Internet's first-ever addresses offered in non-Roman alphabets like Mandarin and Cyrillic. Then the agency will start rolling out a marketer's fever dream of TLDs that will make you wonder how you survived with only the 22 existing generic TLDs; you know, .ORG, .GOV, and the bedrock .COM that ends about half of the world's 250 million existing domain addresses.

The possibility of creating a business like the .COM registry of VeriSign (VRSN), which boasts a $6 billion stock-market capitalization, animates guys like Jon Nevett, a co-founder of Bellevue, Wash.-based Donuts. Backed by over $100 million in venture capital, privately held Donuts has applied for 307 of the new TLDs, including .BABY, .CASINO and .PIZZA.

"You can think of .COM like a big downtown department store," says Nevett. "We want to compete by building a shopping mall with a bunch of boutiques and a few anchor stores." Donuts and a handful of others chasing portfolios will mostly emulate VeriSign, which runs the .COM directory but lets outfits like SuperBowl advertiser Go Daddy do the retailing of Internet addresses to end-users.

Applying for a new top level domain isn't a casual thing. For instance, a contender must pay $185,000 to ICANN for each TLD application. The deadline for the current class of applicants was May 2012. Since then, the agency has been putting applications through an arduous evaluation process that's in public view at www.icann.org.

There's a background screening of an applicant's officers, to guard against anyone with a history of financial malfeasance or cybersquatting (a kind of extortion in which a rascal registers a domain in the name of someone else's trademark, then demands to be paid). An applicant must show the financial and technical wherewithal to operate a directory, says ICANN's Willett, because a top level domain is actually a part of the Internet's infrastructure. After this initial evaluation, if no other applicant is seeking a particular TLD, then ICANN will go through some technical testing, some legal contracting and then delegate to the applicant a domain like .FISHING or .VIP. New TLDs should start going live in the second half of this year.

It's not that simple. Governments can object to proposed TLDs they consider harmful or against the public interest. Last month, about 242 applications got flagged with "early warnings" of some government's concern. Over half the warnings came from Australia, which frowned on the .TENNIS application of its own national tennis governing body, for example, as being unqualified to represent the interests of all the world's tennis players.

In April, ICANN's committee of government advisors has promised it will present its final views on the crop of TLD applications. Perhaps by that time, South Africa will have lifted its opposition to the registration of .ZULU by the folks at Top Level Domain Holdings . That TLD is one of more than 70 applied for by the little company, a pure play on the new domain frontier whose shares trade on London's AIM market (TLDH.UK). The BVI-incorporated business has also applied for a bunch of names on behalf of clients; for example, the .LONDON address as the representative of that city.

Top Level Domain Holdings is but a flyspeck, with a 6 pence share price and a market-cap equivalent to about $50 million. It's got no revenues but has raised over $25 million from hedge funds and has no rivals for 16 of the TLDs it seeks, including .BEER, .VODKA, and .HORSE.

Co-founder Fred Krueger concedes that it's hard to value the publicly-held start-up. "There's no precedent," he says. "It's the wild West. But I think we will make a multiple of the invested capital."

The little TLD player does have rivals for some of the domains it seeks, including .WEDDING and .DOG. For names with more than one applicant, ICANN plans to put all who survive the initial background check into what it calls a "contention set." The contested domain name will then be put to auction, although ICANN's Willett hopes such an auction will be a last resort. Rivals will be encouraged to resolve their competition among themselves though negotiation, or even a private auction.

Top Level Domain's Krueger says that the contest's game theory has probably kept rivals from negotiating so far, as they wait to see who gets eliminated through background screening or government objections. Giants like Google or Amazon will probably get any names they really want. One concern about Amazon's applications, however, is that the company has applied for "closed registries," meaning that it wouldn't allow other companies to use domains like .BOOK or .CLOUD, if it wins them.

There's a trump card for some applicants, however, who apply as a "community" for TLDs like .ECO. Top Level Domain's folks originally teamed up with Al Gore in pursuit of that name, but the former Veep parted ways before the application was filed.

Top Level Domain can still boast the endorsement of the Sierra Club for its .ECO application, but a Vancouver, BC,-based rival called Big Room, Inc. has applied as representative of the environmental "community" and has a crowd of endorsers like GreenPeace and the World Wildlife Federation. Under ICANN rules, if the agency agrees that Big Room represents a community, then it automatically wins.

In deciding who gets .ECO, it probably won't matter that the hedge funds that financed Top Level Holdings had extensive histories of investing in mining companies. Chief Executive Antony Van Couvering says ICANN doesn't care whether Top Level's officers ride a bike to work or drive a car. ICANN's Willett confirms that you can win .VEGAN, even if you eat bacon.