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ICANN's New Top-Level Domain Name Program Forces Insurers to React

Praised by ICANN as a liberator of innovation, the new gTLD program may bring new marketing opportunities to the insurance industry but also compels insurers to defensively apply for expensive domain names to protect their brands.

The board of directors of Internet Corporation for Assigned Names and Numbers (ICANN, a Marina del Rey, Calif.-based non profit) voted today to approved its generic top-level domain program, which will vastly increase the number of Internet generic top-level domain suffixes (gTLDs) over the prevailing 22 — which include .com, .net and .org — by allowing parties to apply for gTDLs, including branded domain names at a cost of $185,000 per application, which can be submitted during a 90-day window that opens up on Jan. 12, 2012. While insurers see opportunity in the program, they face costs associated with defensive application for new gTLDs.

ICANN board chairman Peter Dengate Thrush characterized the launch of the new gTDL program as ushering in a new internet age."We have provided a platform for the next generation of creativity and inspiration. Unless there is a good reason to restrain it, innovation should be allowed to run free."

Given the hefty price tag of application, observers of ICANN's activities generally assume that applicants for new "dot-brand" will be large brands, such as entertainment and financial services companies, according to Melbourne IT Digital Brand Services (DBS), a Mountain View, Calif.-based consultancy focused on brand protection that was also one of the original domain registrars. Melbourne IT DBS reports that the roughly 150 companies that have approached the company about applying for gTLDs have an average market cap of $36.7 billion. Ninety-two percent of those companies expressed interest in applying for their main brand, and a further 9 percent wanted to explore product brand gTLDs. Eleven percent were interested in applying for a generic term.

The motive of the companies cited by Melbourne IT DBS for applying for gTLDs were nearly evenly divided between protecting themselves against brand infringement, on the one hand, and creating competitive advantage, on the other. Defensive motives were in a slight majority of 48 percent over 45 percent.

State Farm has created a work group to review ICANN's activities in order to identify opportunities and risks, according to company spokesman Jeff McCollum. The Bloomington, Ill.-based carrier sees opportunity in the new gTLD program though for competitive reasons, McCollum declined to elaborate. However, he added that "there are defensive measures that will need to be addressed quickly."

Farmers Insurance (Los Angeles) Assistant VP for e-business, Nipun Sharma calls gTLDs a definite game-changer that will have a major impact on brand owners. "With the advent of gTLDs, national brand owners will have the ability to effectively promote their brand on the internet, increase control and monitoring of their internet presence, increase safety and security on the internet from a technical and operational point of view, and also improve policies that can be identified according to their own standards," Sharma comments. "However, applicants also need to realize that it's an expensive proposition and requires a minimum commitment of 10 years."

In addition to the initial application fee, the parties who successfully acquire new gTLDs will pay an annual $25,000 fee to ICANN. The body anticipates about 500 applications, according to Armando Dacal, senior VP, Melbourne IT DBS. "Those who hop on this early have a competitive, first-mover's advantage," he says.

Enthusiasm for ICANN's gTDL program is far from universal. Lauren Weinstein, co-founder of Los Angeles-based People for Internet Responsibility called the program "disgraceful" in a blog anticipating today's announcement.

"Some observers are expecting hundreds of millions of dollars to be spent quickly in the resulting environment, thanks to the associated "gold rush" and "buy protection for your brand" mentalities being explicitly promoted," Weinstein writes. "I suspect that is a lowball estimate. I believe we may see billions of dollars being wasted in ICANN's new gigantic gTLD 'domain name space' - mostly from firms falsely hoodwinked into thinking that new domain names will be their paths to Internet riches, and from firms trying to protect their names in this vastly expanded space, ripe for abuses."

Ken Hittel, VP, corporate internet department, New York Life (New York) sees threat rather than opportunity in the gTDL program.

"We'll all have to go ahead and register for new gTLDs that we'll likely hold for purely defensive purposes, that we'll never use because to use them would require spending millions of dollars to advertise the new domains in a vain attempt to change consumer behavior, which defaults to .com," he comments.

Hittel suggests that insurance companies might consider joining the Coalition Against Domain Name Abuse (CADNA), "to fight ICANN on this scheme and redirect it to real issues" — such as the creation a reliable and accurate who's-who database to assist in fighting commercial scams and fraud, or an initiative to find a logical candidate to purchase relevant gTDLs, such as .lifeinsurance, .annuities and .longterminsurance.

"At least let's not leave us in fearful competition to own these generic names," Hittel says.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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