More than a century after the U.S. government held a race to settle Oklahoma, the World Wide Web is hosting its own land rush to claim uncharted domains. On Sept. 26, Ireland's dotMobi launched a public sale of top-level Web addresses with a new dot-mobi extension. The company's goal is to create a whole new swath of Internet territory populated with pages that are completely compatible with cell phones and personal digital assistants.
In the first two days, dotMobi registered more than 88,000 new domains. That's not many compared with the 105 million addresses registered worldwide since 1985—more than half of which end in ".com." But the speed at which names are getting taken has made the new extension a wild success by dotMobi's estimate. "People are taking the names and they are putting them into production," says dotMobi CEO Neil Edwards. "It took dot-com years to do 100,000 names."
But it's who's rushing to register some of those names that's causing concern. Some companies are complaining that the new extension is luring criminals and cybersquatters who either want to trick Web surfers into visiting wrong sites or charge companies a premium to buy back names associated with their brands (see BusinessWeek.com, 8/28/2000, "CashingIn.com").
TRADEMARK FEARS. Verizon's (VZ) general counsel, Sarah Deutsch, says the land grab is more of a forced march, where big-name companies are warned to buy a claim or risk brand damage. "Anytime one of these top-level domains is introduced, we are forced to register these domains proactively because if you don't do that, you are going to find your trademark infringed. It might be linked with pornography or phishing or fraud," she says. "Companies are forced to come in and protect their crown jewels."
Deutsch says the new dot-mobi name doesn't offer Verizon and some other companies anything that they can't do with their dot-com or dot-net names, which can be accessed by wireless communication devices and formatted to work with smaller screens and limited bandwidth capabilities. A dot-mobi address is different in that dotMobi ensures its sites are formatted to work with cellular phones by offering free templates, instructions for developers, and a user guide with examples. The company also monitors addresses for compatibility with wireless devices and alerts users to portions of their page that don't work. It will eventually expunge Web pages that are not in line with necessary requirements.
Edwards says Deutsch and others who share her opinion are failing to grasp the benefits of having an extension where everything is accessible via a handheld mobile device. "The problem has been that trying to take the PC-based experience to the phone failed [with other Web addresses]," says Edwards. With a dot-mobi extension consumers will be able to enjoy their Web experience more from handheld communication devices and companies will have an additional way of advertising to a targeted audience, he says.
BAD PRECEDENT. Edwards has added reason to think that dot-mobi will catch on. His company is backed by some of the leaders in wireless communications and the Web, including Microsoft (MSFT), Google (GOOG), Nokia (NOK), Ericsson (ERIC), and Samsung. The companies joined together in 2004 in response to what they saw as a need for increasing compatibility between handheld wireless devices and the Internet. Over the following year, they worked out a licensing agreement with the Internet Corp. for Assigned Names and Numbers, the organization that governs domain name policies (see BusinessWeek.com, 7/28/06, "ICANN to Cut U.S. Apron Strings").
Verizon and others do have reason for concern about brand damage. When dot-eu addresses were released last year, many were registered by fraudsters and cybersquatters. EURid, manager of the dot-eu addresses, suspended 74,000 names and sued 400 independent registrars for buying names associated with brands in order to resell them to the brand owners at premium prices.
Michael Denning, VeriSign's (VRSN) vice-president and general manager of Digital Brand Management, is recommending clients register names to avoid having to buy them back or dealing with lengthy court battles before the World Intellectual Property Organization, which arbitrates disputes concerning domain names. "I think the cost for proactively doing something and buying the domain name is much lower than trying to get the brand or trademark back later, which is a much more time-consuming and costly proposition," Denning says.
LESS CYBERSQUATTING? Edwards acknowledges it's inevitable some people will register domain names in hopes of cybersquatting or creating phishing sites. He says the company tried to make illicit activity cost-prohibitive by setting the initial prices at $25, about twice the rate for dot-com sites. On Oct. 10, the price will drop to less than $12 per domain. Edwards also says that the incidence of fraud and cybersquatting is likely to be a lot lower than with dot-com, dot-eu, or dot-net names because Internet users on cellular phones are not surfing as much and thus unlikely to stumble upon as many bad sites. As a result, phishers and cybersquatters will have less traffic to their sites and find operating them not as profitable.
While computer users are less likely to visit a site by surfing, they may nevertheless be inclined to visit a fake site set up by a phisher hoping to nab sensitive personal details. To keep this from happening, dotMobi had a window of several months, from May, 2006, until Sept. 22, when only recognized brands could register sites. The company received 13,000 registrations from known brand names in that timeframe. No doubt many of them were from the likes of Verizon, intent on keeping others from squatting on their Internet territory.
Holahan is a writer for BusinessWeek.com in New York
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