Back in June ICANN began a new program for domain naming that amounts to a “game changer” for many Internet engaged companies. Previously there were only 22 gTLDs, or top level domain determiners, but ICANN’s new initiative has changed this. Very soon, gTLDs will be able to end with just about anything – and world or language you can imagine. How does this change the game? Read on.
(ICANN Singapore here – courtesy ICANN Flickr)
Game On – Changes to Internet Structures
For small to medium sized businesses, the Internet Corporation for Assigned Names (ICANN) initiative will certainly prove too expensive. The ICANN cost estimates for applying for new gTLDs will be in excess of $185,000, there’s going to be a $5,000 dollar fee up front too, according to ICANN. On top of this, other fees will likely apply, virtually prohibiting smaller players from gaining access. But, this is not the only “game changer” where online business is concerned.
Simply for SEO purposes, imagine the reliability for Google, the special priority search engines will attach to such domains. For those who can afford them, branded names will be SEO dynamite. We can even call the new gTLDs a kind of automatic SEM in themselves – think Chocolate.cadbury or Racing.chevrolet, and so on.
As you can see, larger companies are about to have a decided edge when compared to smaller entities that cannot afford forward thinking domain branding. So what’s new? All companies will have to think of ways to offset costs, and many already do. One solution for not only offsetting initial gTLD costs, but the overall costs of doing Internet business is location these days. We talked with one company in the European banking hub, Grand Duchy of Luxembuorg, about just such cost offsets.
Deciphering for Advantage
VAYTON Brand Capital, an Intellectual Property management company in Luxembourg, has been on the leading edge of brand and domain economies for some time. Aside VAYTON’s other services and expertise, the company specializes in dot brand registration and, for course, all the legislation that surrounds it. We spoke with Nicolas van Beek, head of Intellectual Property Management there, about the implications and advantages of ICANN and the new gTLD game. When asked; “How does the new ICANN initiative affect medium sized to large Internet dependent businesses?” – Van Beek responded:
“Well, for one, thanks to this law, brand owners can better protect their IP assets in several ways. One of these is obviously the exclusivity created with costs. However, for some marginally prepared businesses there are strategies for entering the game.”
Van Beek went on to explain how VAYTON, and other companies worldwide, stay abreast, and afford advantages for their dot brand clients. One of the most innovative and effective of these is what Van Beek called “Auto-Financing a DotBrand” in the case of VAYTON, helping companies register their brand domains in Luxembourg – and taking advantage of considerable tax advantages there. In effect, saving enough in tax in the short term, to more than pay for the new gTLD schema.
As one of the banking and business hubs of Europe, Luxembourg is specially positioned for certain kinds of business initiative. Intellectual properties being one, the government there has created “special” incentives for companies to do business out of the Grand Duchy of Luxembourg. We asked Van Beek to explain how his “auto finance” works for VAYTON clients.
Luxembourg has super friendly IP (intellectual property) legislation, that creates an tax 80% exemption on certain types of IP-related income. So, a company wanting to gain leverage and protect their brand via the new gTLD registration can, in effect, offset the initial costs via the savings – in the very short term. Van Beek also pointed out; “This opportunity is only available for companies registered in Luxembourg, and for companies that register their IP in Luxembourg, as well as companies whose IP assets a Luxembourg-based business uses.”
Credit – carolsg – Fotolia.com
And the photographer © carolsg – Fotolia.com
Dot com Becomes Dot Apple
Obviously smaller companies whose income is not as significant, would not receive enough tax advantage to “auto-finance” the new Dot Brand, but for companies on the “margin” – let’s just say they can better afford their new tourism.florida, or gowns .fashion as domains. On top of this advantage, the tax incentives are ongoing too. How does all this work?
According to VAYTON and the ICANN rules, applicants must file via ICANN (www.icann.org) from 2012 onwards. Following approval, addresses will be initiated and running in a few months. Where Luxembourg is concerned, Vayton, or companies like them, are specially qualified to assist “start to finish” – ensuring a smooth, and highly professional transaction.
One big reason VAYTON and others stay prominent in this business is the highly specialized niche they occupy, but this is fodder for another story. As an illustration, this CNN Money article reveals at least one huge reason businesses turn to Dot Brand companies – the sheer mountain of red tape. Beside the cost, Ben Crawford, CEO of DotBrand Solutions, suggests there can be as many as 150 pages of policy documentation alone.
Crawford uses HSBC bank to illustrate how big companies can better ensure their brands, a dot HSBC affiliate is far more credible that anyone else suggesting they are associated. So too, the “rush” to snatch up even these expensive domains may be problematic for some. And in a way, this is another reason all businesses should consult with the experts on this. Imagine you are the CEO of say, Robert Mondavi the winemakers. How many huge companies will be vying for the .wine suffix? For Web 3.0 and above, just like the dot com or current iteration, your name pretty much says it all. And of course how much you have to spend.
We leave you with video from ICANN explaining a bit more and showing some of the hurdles the organization has to cross. For more in depth information about Dot Branding and/or the new ICANN initiative, the reader may want to start with this white paper from VAYTON (PDF), visit the ICANN resources pages of their website here, or alternatively review DotBrand Solutions’ information here.