Today we’ll begin discussing some of the risks associated with applying for and owning a branded gTLD. We’ll wrap up this discussion tomorrow.
RISKS OF OWNING A BRANDED GTLD
The return on investment is not clear.
Because brand owners have never had the chance to own their own gTLDs before, there is really nothing similar to which they can compare them in order to determine whether they will yield a sufficient return on investment (ROI) to make them worth pursuing. The ROI could be particularly difficult to determine for business-to-business or other brands that are not consumer-facing. The reality is, it could be years before brand owners start to see any ROI from their gTLDs. And as with any other new business venture, there is a possibility of failure.
Investing in a new gTLD requires a brand to operate a domain name registry.
Applying for and operating a new gTLD is not as simple as registering a domain name, but it may not be as complex as managing a domain name portfolio when you take into account the huge number of unique processes across hundreds of third-party gTLD and ccTLD registries. It will require that brand owners set up a completely new and separate business function – running a new gTLD registry. This entails maintaining a relationship with ICANN and meeting a litany of technical requirements. Fortunately, brand owners will be able to outsource this function; of course, outsourcing comes with additional cost, but if done properly should have little impact on daily life at headquarters.
For companies with multiple brands, it may be difficult to decide which brands should have a corresponding gTLD.
When a company has multiple brands, they often register separate domain names for each of them. Gap Inc, for example, owns the domains Gap.com, OldNavy.com, BananaRepublic.com, Piperlime.com and Athleta.com for its various brands. But which of these brands will get its own new gTLD? Should they all have their own gTLDs? .GAP seems obvious, but would .ATHLETA be worth the investment? This conundrum becomes compounded when there is not as strong of a connection between the parent brand and its affiliates.
These are only some the risks brand owners can face when pursuing branded gTLDs. Click here to read “Part 4: More Risks”.
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