Ken Hittel, Vice President of the Corporate Internet Department at New York Life Insurance Company, has put together an entertaining rundown of the questions and concerns that New York Life has about the new TLD launch. Frank and funny, this piece (originally prepared for the Association of National Advertisers) brings up issues that should be top of mind for brand owners and marketers and have yet to be addressed by ICANN.

Questions/Concerns Around the Proposed New TLDs From New York Life Insurance Company

1. Do we really need new TLDs? If and when “we” means brands, it’s exceedingly unlikely that we do or ever will need new TLDs. Most brands already own hundreds, and some own thousands, of domain names in .com, .net, .info, .biz, .mobi, and other TLDs. Few if any of them will ever be put to use, because a) virtually all of them were purchased for purely defensive reasons (to prevent cybersquatting ¹); and b) it’s proven to be exceedingly difficult to get anyone to go to addresses that don’t end in .com, absent a significant additional investment in advertising them.² Rational or not, and whether businesses like it or not—we can take off our brand-owner hat here for a moment—online users have spoken: They expect businesses to be reachable via .com and they won’t go through the trouble of trying to locate a destination at .net or .org or .info.³

   New York Life has a relatively small portfolio of about 400 names and 90% of these are not and never will be in use, for the reasons mentioned above. If this is at all typical, then most brands are already spending (and wasting) several multiples of their marketing dollars on useless addresses than on ones they actually populate and deploy. Rather than enabling the creation of thousands of new and useless TLDs, ICANN could serve the Internet community much more productively by helping curb the varied abuses of cybersquatting and enabling companies to maintain a more rational and productive portfolio of domain names.⁴

2. Have we really run out of .coms? To believe that we have run out of .com names is equivalent to believing, as one person said to me, that we’ve run out of numbers ending in 5. You might think there’s indeed some stress here if you look at some of the very silly names that have been registered in recent years, but what seems silly to some may be a viable marketing strategy to others. Do we really believe that American businesses have suddenly become so bereft of creativity that they simply can’t devise any new names in the .com TLD? And that the best solution to this new creativity-deficit is the unleashing of hundreds of new TLDs each year?

3. How much are the new TLDs going to cost us? By any measure—especially compared to the $35 or so we pay for a new .com name—it’s going to be very expensive.⁵ At ~$175,000 to apply for a new TLD, just five new TLDs to cover a minimal number of trademarks will cost about a million dollars. Add $75,000 per TLD per year to renew them. Add another employee (at least) to your head count to monitor, register, police, and protect your considerable new investment in TLDs. Add another sum of Lord-knows-how-much-money to develop and maintain an ICANN-certified domain registry, which is part and parcel of receiving approval to use the new TLDs!⁶ I’m reminded of the old joke: A million here, a million there—pretty soon you’re talking real money…

   I have no idea the average number of trademarks owned by American businesses but it’s surely at least a handful for most of them—and dozens, scores, hundreds for some? How many of these will you choose to attempt to cover with a new TLD application (at $175,000 per), or rather be afraid not to attempt to cover? How many potentially typo-squatted versions of them will you be afraid not to apply for? How many of your peer, non-peer, and remote competitors will you trust not to apply for your trademarks, just on the off-chance that you’ll stand on principle and refuse to enter the fray?

   But that’s not the most of it, or the worst of it. New York Life, AMEX, Pfizer, Verizon, Microsoft, and the rest of the Fortune 500 (at least), have only so many trademarked names they’d have to consider as new TLDs. But how many lines of business are we all in? That’s crucial, because ICANN is explicitly encouraging applications for generic as well as branded TLDs.

   At New York Life, we consider ourselves the #1 life insurance company in the U.S., so if there has to be a new .lifeinsurance TLD, we’d probably want to own it. How many of our peer competitors, however—Northwestern, Pru, MetLife, MassMutual, Guardian, etc.—would concede our “right” to .lifeinsurance? Less than zero. How many of our non-peer competitors (Allstate, State Farm, Farmers, Progressive, GEICO, etc.) would concede this? Less than zero.⁷ How many of the DRGAs (Direct Response General Agencies, e.g., Accuquote, SelectQuote, Intelliquote, NetQuote, insurance.com, insureme.com, etc.) would concede this? Less than zero.⁸

   How will ICANN possibly adjudicate this and establish the “rightful” owner of .lifeinsurance? And what about the many, many other lines of business that the companies listed above compete in? Who gets .mutualfunds, .401k, .annuities, .longtermcare, .lifetimeincome, .termlife, .pensions, etc., etc., etc.

   Who gets to own .cancer? Who gets .cholesterol? .erectiledysfunction? .alzheimers? .hypertension? .diabetes? .headache? dot-the-hundred-thousand-other-diseases-syndromes-symptoms-conditions that pharmas (and other organizational entities) service and profit from?

   Who deserves to get .hotel? .travel? .computer? .bank? .toys? .sports? .games? .health? .homes, .shopping, .music, .groceries, .pets, .books, .advertising?

   Presumably ICANN doesn’t adjudicate these at all, at least not directly. Presumably these are adjudicated via auctions. So how likely is it that any of the possible TLDs mentioned above are really going to cost only the $175,000 application fee (and annual renewal)? Realistically, aren’t they all going to end up costing several multiples of that—and perhaps a multiple of that to create or outsource your new registry?

   And even if you choose not to participate in the auctions—or are simply outbid by a competitor—can you also chance not “buying” your trademark names in the new (relevant) TLDs? How much, then, is Pfizer going to pay Merck for Pfizer.cancer? How much is Merck going to pay Pfizer for merck.cholesterol? How much is Prudential going to pay New York Life for prudential.lifeinsurance? How much is New York Life going to pay Prudential for newyorklife.annuities? You get the idea.⁹

4. How do the new TLDs benefit the consumer? It’s hard to see how consumers will benefit from new branded or generic TLDs. I can certainly see how all kinds of consumers, from porn aficionados, to children, to parents and guardians of children, to legislators, would benefit from .xxx, but that particular generic TLD seems to be permanently off the ICANN table.¹⁰ As noted above, there’s been little to no real public acceptance of any other TLD than .com—no matter how logically and accurately these may in fact be applied to varied types of organizations. People just do not naturally go to .net, .org, .mil, .biz, etc. sites; they do quite naturally go to .com, however, even when the sites in question are logically and accurately .net, .org, .mil, .biz, etc. sites.¹¹

   So why would anyone think that people will go to chase.bank or whatever.chase rather than, as they’ve always done, going to chase.com? To viagra.pfizer or pfizer.viagra or viagra.erectiledysfunction or pfizer.erectiledysfunction, rather than to viagra.com or (much more rarely, pfizer.com)? From a consumer perspective, I think it can only be said of the new branded and generic TLDs: This dog don’t hunt. There is simply no reason for online users to so radically change their navigational behavior on the Internet—which is now, basically, either direct navigation or Google—without significant new investment by American businesses in marketing and promoting the new TLDs, the likelihood of which seems quite remote.¹²

   But what if, by chance—by very remote chance!—businesses do decide to bear all the new expenses associated with the new TLDs and aggressively promote them? What if we really do manage to dislodge .com as the default navigation destination and introduce thousands of new TLD possibilities in addition to or in its stead? Then we have in fact introduced whole new levels of navigational complexity onto the Internet and onto the shoulders of consumers. How, really, does the consumer benefit in a move from an online world of .com plus a handful of other more or less arcane, more or less relevant extensions, to a world where destinations must be sought amongst thousands of new “dots.whatever”?

5. Who, then, benefits from the new TLDs? It seems that there are only two parties that could benefit from new TLDs. The first is, obviously, ICANN itself. ICANN could potentially make a lot of new money if businesses find themselves, against their instincts and best interests, forced to participate in TLD applications and auctions. (And presumably so would the parasitic registries that could in-source maintenance of the new TLDs and the VCs and others willing to finance them.)

   The other party that could benefit would be cybersquatters and online criminals. As noted earlier, it’s already difficult, if not impossible, for legitimate businesses to keep up with those elements on the Internet that trade on consumer confusion and naïveté around brand names and trademarks. The larger the navigational namespace, to (perhaps) coin a phrase, the greater the opportunity for online fraudsters to prey on consumer confusion and naïveté with Web sites that look like and sound like, trusted brands and businesses. What a great new opportunity to rejuvenate the phishing business!

   As for brands and businesses, however, the only respect in which they stand to profit from the new TLDs is the assurance that no one else is going to be able to use the few or many names they paid through the nose to acquire from ICANN. Of course, given that brands and businesses seemed doomed to remain always a few steps behind the cybersquatters and fraudsters mentioned above, that’s cold comfort.

Ken Hittel has served in a variety of capacities with New York Life over the last 20 years and is currently responsible for Internet strategy within the Company and, operationally, for the development and maintenance of the public site, www.newyorklife.com, and the Employee Intranet Portal.