Australian businesses could be losers in domain name changes

Australian small and medium businesses could be the losers in the new domain name gold rush, set to start early next year.

Companies are being advised to make sure their trademarks are current and defendable after a decision last week to allow the creation of thousands of new domain names by the Internet Corporation for Assigned Names and Numbers, or ICANN, the non-government body that sets the rules for domain names.

Last Friday ICANN said it would begin taking applications for new domains next April, and the first names are expected to be in operation by the end of 2009.

Every country has a country code domain name, such as .com.au and co.uk. But the new decision means new names could include company names such as .Telstra, brand names such as .vegemite or place names such as .Melbourne.

Preference will be given to the organisations with brand name IP rights. Paul Wallbank, founder of national IT company PC Rescue and SmartCompany blogger, says the decision will mostly be of value to companies such as Telstra or Optus. “It will probably benefit companies trying to establish a brand or segment in the marketplace.”

However he says the cost will effectively lock out small and medium businesses from buying domain names. “There is still not a lot of detail, but if the cost is around $US60,000 or $US100,00 it would even lock larger enterprises out of getting the name,” he says.

It is also not clear how search engines will handle the new domain name. Head of Google corporate communications in Australia, Rob Shilken, says he can’t comment as he is unsure.

Wallbank says he doesn’t think it would have implications for search, but neither would there be a search advantage.

But there will be a problem for Australian businesses trying to grab a domain name for their trademark name only to find that a company in the US or Britain also has the same trademarked name that wants the domain name too.

It is still unclear whether domain names will be sold for a set price or the name will go to the highest bidder.

“However the prices we are talking means any small and medium business won’t be able to afford the set price,” Wallbank says.

He says he is cynical about the move by ICANN. “There is no shortage of domain names. This could be seen as a revenue grab by ICANN, particularly at the prices mentioned. There is a lot of hype behind all this.”

Wallbank also points out that the announcement flips the usual rules about trademarks and protection. “It has always been cheap to get a trademark and then costs a lot to defend it. But with this it will be expensive to get the domain name. So you might be better making sure you have protection for your trademark in place, and then just send out nasty legal letters,” he says.

However Wallbank warns that the gold rush for domain names might not eventuate. “Dot-biz names haven’t taken off in any big way,” he says. He says endings such as .com.au are now very entrenched in people’s minds. “The trap will be for people to pay big money for a domain name and then a lot of money on top of that for marketing costs, and it won’t be that successful.”

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