Those devils at the Internet Corporation for Assigned Names and Numbers (ICANN) recently released further information about the new generic top level domains (gTLDs like .google or .yahoo).

The new gTLDs are likely to spark a massive change in how websites are identified and categorised. In turn, this will have an effect on search costs or how easily a customer will be able to find a website they are looking for.

One document of particular note is the report on the economic impact that the new regime could have. The report is available here and makes for interesting reading. At 67 pages the report is quite extensive so some key points of interest are extracted below.

The report highlights that the overall effect on search costs is uncertain. Whilst the registration of specific gTLDs by companies (such as .google or .yahoo) might reduce search costs due to better signposting allowing the company to be found more easily, on the other hand the increased numbers of gTLDs could lead to ‘confusion or fragmentation’ of the internet.

As the report states, the consumer may spend much more time looking for a site as it could be on a wide range of gTLDs as compared to the current choices where a website of a business based in the UK for instance, will generally use .co.uk or .com.

Businesses could also face increased costs from having to have a foothold on every gTLD of relevance and to avoid instances where the customer searches on a particular gTLD and does not find the desired website. By way of example, a builder might wish to have registrations in a wide range of categories in which he does work i.e. .plasterer, .roofer and .paver. Alternatively, a bank could be registered for .bank, .finance, .money or .credit hypothetically.

The above analysis could also be equally applicable to pay-per-click advertising and search engine optimisation (SEO) costs however, if implemented successfully, such costs could fall, especially where you are using a business area specific gTLD.

Should costs increase however, businesses may take comfort in the knowledge that SEO is likely to be of increased effectiveness where businesses take up a business specific gTLD.

An entirely different question is whether such business-specific domains will come to fruition. The answer to this question is a case of wait and see due to the high costs associated with setting up the gTLD itself (for starters, a $185,000 assessment fee has to be paid to ICANN to assess an application!).

In this way, the role of ICANN in regulating the flow of new gTLDs will be crucial in terms of maximising the benefits that gTLDs will bring whilst also ensuring that customers are not confused or have to spend more time searching for the website they want, than they did previously.

As the Department of Justice in the US has stated, ICANN should ‘craft rules for new gTLDs that are likely to enhance the external benefits and minimise the external costs of gTLDs’. Whilst certain basic rules have been produced, the full extent of ICANN guidance on the subject is awaited with bated breath.

7 July 2010
By Michael Goulbourn

Tags: gTLDs, Pay-Per-Click, PPC, SEO

Posted on: Wednesday, July 7th, 2010 at 1:17 pm - Category: General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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