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Eugenio Marongiu / Shutterstock.com
29 July 2014

The guru of gTLD registeries

Although traditionally used to describe a religious leader or teacher, ‘guru’ has become a popular, informal way of describing someone (or a company) with deep knowledge of a particular field. In an age of self-selling and egotism, this is perhaps why Donuts Inc applied for the .guru generic top-level domain (gTLD)—to tap into what could be a lucrative market.

At the time of writing, the .guru suffix is Donuts’ most popular, with 64,000 registrations. It is one of 307 that the LA-based company applied for, although Donuts has secured just 153 gTLDs to date—131 have been launched—and expects to have around 200 in total after some have been knocked out in auctions or by objections. There are 120 still either in contention or facing objection.

Bob Samuelson, vice president of sales and marketing at Donuts, says the company expected .guru to be a popular and user-friendly domain name “although we frankly were a little surprised it took off as fast as it did”.

“We’re very pleased,” he adds. “Each of those registrations is organic, meaning none is the result of giveaways or artificial marketing efforts.”

Sweet success

Of the 307 gTLDs it applied for, Donuts does not have a particular favourite, Samuelson says, but for each suffix there is an idea of what ‘success’ looks like.

“None of our domain names will reach the level of popularity of, say, .com, but we don’t expect them to. Suffice to say that if they meet our internal metrics, we'll consider them successful.”

As the new gTLDs launch, everyone from domain investors to brand owners will be watching eagerly to see how popular each one is and which leads the rankings. Suffixes such as .guru may have made an impressive start but there is a lot of catching up to do—there are more than 270 million domains registered in the existing 22 gTLDs such as .com and .org.

According to Samuelson, there will be a steady adoption of new gTLDs as they become more familiar in the marketplace.

“Already we’ve seen a degradation in the growth of .com additions to the zone (the master file of all names managed by a registry). This could be due to the attractiveness, brevity and usefulness of specific internet identities available in the new gTLDs.

“We also expect companies to include new gTLD addresses in their advertising and marketing in a way that will underline the utility of the names, adding market credibility to their use, which should spur additional registrations,” he says.

With all the fanfare that has accompanied the new gTLDs, the lack of awareness and understanding of them outside the domain name industry is still a problem. Some argue that ICANN—the Internet Corporation for Assigned Names and Numbers—is responsible for promoting them, although the non-profit organisation itself would disagree. For Donuts, Samuelson notes, domain name registrars—the retailers—do the majority of the marketing to end users, through combinations of online marketing, advertising and other sales techniques.

“Registries, including Donuts, do a limited amount of marketing to end users, but since we're prohibited from selling directly to registrants, we rely on the registrar channel for most marketing to customers,” he adds.

"If a brand objects to the use of a trademarked term, and the company believes it is on solid ground, there are mitigation measures available."

Donuts has decided not to use the ‘vertical integration’ model of selling domain names. Traditionally, registries and registrars have been kept separate, but under the new gTLD programme companies such as Uniregistry have launched their own registrars in what is being seen as a shakeup of the market. Some have even speculated that in the next few years all registries will be operating their own registrars. Although Donuts may not back the model, Samuelson confirms that “we don’t object to vertical integration”.

The potential popularity of Donuts’ gTLDs might present a concern to brand owners. If it secures the 200 it hopes for, Donuts will have a third of the 600 ‘open’ (publicly-available) suffixes—which is where any cybersquatting is likely to take place.

Blocking mechanism

To alleviate trademark owners’ fears, Donuts allows right owners to block their trademarks across all the company’s registries in one go, through the Domains Protected Marks List (DPML). Available through ICANN registrars, the DPML accepts exact matches of trademarks as well as words containing the mark. Three-character words, however, can only be blocked as exact matches, so Yahoo could block ‘yahoo’ or ‘yahoooo’ but IBM could not block ‘ibmservices’.

The DPML is powerful, argues Samuelson, because it affords right owners more than exact-match protection.

“Apple may refer to itself simply as Apple, but it is probably interested in protecting ‘applecomputer’ or ‘appleipad’, because such terms are important to its marketing efforts or general business approach.

“Provided the exact term is in the Trademark Clearinghouse, we will accept DPML subscriptions on terms that contain that exact match term,” he says.

The price of the DPML varies by registrar, but usually costs between $2,500 and $4,000 per subscription, Samuelson explains, adding that a domain can be blocked for between five and ten years and that subscriptions can be renewed in increments of one to ten years. It costs brand owners a fraction of what it would to defensively register their trademarks, he adds.

So far, “more than 50 percent” of the world’s top brands ranked by Fortune 100 have subscribed to the DPML, he says, although he doesn’t name names. In the rankings, Shell leads the way, followed by Walmart, while BP and Toyota are also in the top ten.

There are cases where a DPML subscription can be overridden by a right holder with the same name. The override can be performed at any time, but the new party must have an exact-match trademark that would be eligible for a sunrise period.

Samuelson says: “The DPML is meant to prevent cybersquatting and not discriminate between right holders with identical marks. For example, if Delta Airlines has a trademark for the term ‘Delta’, as does Delta Faucets, the latter may override the DPML in order to register ‘delta.plumbing’.”

But would there be a problem if, say, Delta Airlines objected to Delta Faucets’ registering ‘delta.plumbing’? Or if a brand blocks its mark but wants to use that domain offensively at a later date?

“Not really,” Samuelson says. “If a brand objects to the use of a trademarked term, and the company believes it is on solid ground, there are mitigation measures available, including ICANN’s Uniform Rapid Suspension System and other methods.

“It’s unlikely, however, that a company in one business sector (eg, an airline) would object to the use of a similar term by another brand owner in the latter’s appropriate industry (eg, plumbing),” he says.

In addition, a right owner can override its own block and register it in any Donuts gTLD it wishes.

Donuts does allow people to complain about DPML blocks if, for example, the right owner did not hold an appropriate trademark registration when the term was blocked. However, there have been no such disputes to date, Samuelson says.

With more than 150 gTLDs under its belt, Donuts is a huge new gTLD player and could dictate many of the market trends that emerge in the coming years. After spending more than $100 million on application fees and auctions—and no doubt more on consultancy and other fees—a big question is whether Donuts will come back for a second bite of the cherry in the second round.

Samuelson says: “If we were to apply, that wouldn’t yet be public information. We absolutely will monitor the development of applicant guidelines for the next round, as the ICANN community will be very involved in determining the rules under which potential and existing registries may apply.”

Even before we get to a second round, however, Donuts may find itself worthy of the title ‘new gTLD guru’.

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