Esther Dyson the Great Dame of Silicon Valley, at times matriarch to Bill Gates and many other lads on the innovative circuit, wrote a harsh column August 26th on GPS CNN on ICANN gTLD. I like and respect Esther especially her technical background, we have shared the podium, but as this topic deals with the centrality of global corporate nomenclature it demands an authoritative analysis and I feel it’s my responsibility to clarify and have taken the liberty to address her entire piece item by item.
What’s in a domain name? By Esther Dyson, Project Syndicate
Editor’s Note: Esther Dyson, CEO of EDventure Holdings, is an active investor in a variety of start-ups around the world. Her interests include information technology, health care, private aviation, and space travel. For more from Esther Dyson, visit Project Syndicate or follow it on Facebook and Twitter.
Esther Dyson – A name is just a sound or sequence of letters. It carries no value or meaning other than as a pointer to something in people’s minds a concept, a person, a brand, or a particular thing or individual.
NJ’s Response – A name carries all the value. Without a name identity a brand is no different than unlabelled goods stacked in warehouses and global commercial services dying and gasping without being identified. Imagine EBay, Gucci, Rolex or Google without a name; they would become penny stocks. It’s the power of the name, the perception of value that it creates belonging. Without a name identity, big or small you have nothing. Only the big branding mentality is logo-slogan centric and looks to a name as just as a pointer.
Esther Dyson – In modern economies, people distinguish between generic words, which refer to concepts or a set of individual things (a certain kind of fruit, for example), and trademarks, which refer to specific goods or services around which someone has built value. By law, actual words can’t be trademarks, but specific arrangements of words such as Evernote or Apple Computer can be protected.
NJ – The trademark law has explained a century ago that generic words cannot be trademarked. Naïve entrepreneurs so often use them, at great risk. Apple was dragged into courts over the conflict with Apple Records of the Beatles and has also made the largest settlement of the period. Despite all the problems, it survived and acquired a worldwide ‘secondary meaning’ where its common use is quickly associated with the computer and not the fruit. Orange, Banana, Apricot and many other fruity names enterprises repeatedly keep drowning and are often kept alive via rebranding life support. Despite all this so called glory it is wrong to adopt a moniker over a commonly used generic name even though it may be trademarked under a specific ‘ware’ of classification. In a case when a generic main name attached with another word to describe its service, the secondary word attached to a name is hardly used and the naked usage of the first word only becomes awkward and eventually a big trademark liability. In modern economies, Watermelon Systems and Strawberry Securities are doomed from the start and only heavy advertising can keep them alive.
Esther Dyson – The Internet’s domain-name system (DNS) was formalized in the late 1990’s by the Internet Corporation for Assigned Names and Numbers (ICANN). I was ICANN’s founding chairman, and we more or less followed the rules of trademarks, with an overlay of “first come, first served. If you could show that you owned a trademark, you could get the .com domain for that name, unless someone else with a similar claim had gotten there first. Our mission was to create competition for Network Solutions, the monopoly player at the time, but we did so only in part. Network Solutions retained control of the .com registry, whereas we created a competitive market for the reseller business whereby registrars sold names directly to users.
NJ – Reflecting back, it was a disaster. There were no trademark rules followed. It was nothing but anarchy as on a first come, first serve basis while intellectual properties were looted in broad daylight. It grew to 1 million domain registrations per day and created worldwide cyber-squatting. The confusion brought a boom to reckless advertising and branding and trademark fights.
Esther Dyson – Now ICANN is taking a different tack, allowing for a dramatic expansion of the namespace with a host of new Top-Level Domains (TLDs), the suffixes that go after the dot, such as .com, .org, and, soon, .anything. The problem is that expanding the namespace – allowing anyone to register a new TLD such as .apple – doesn’t actually create any new value. The value is in people’s heads in the meanings of the words and the brand associations not in the expanded namespace. In fact, the new approach carves up the namespace: the value formerly associated with Apple could now be divided into Apple.computers, apple.phone, ipod.apple, and so on. If this sounds confusing, that is because it is.
NJ – The value in the people’s head comes from access and usability of the name, which in turn adds to increased visibility. This visibility adds to increased value to the brand, as visible brands are chosen over obscure brands; gTLD creates new layers of usability. The visibility that domain names brought to IBM and Xerox are as significant as what TV broadcasting did to name identity. Apple will have added usage with unlimited dot apple applications. It can control and allocate at wish creative digital sub-name branding services. Back to the fruity example, which now seems to be attached to products thanks to its generic disposition. “Apple phone, apple ipod, apple computer are common phrases because they are not distinct enough as Rolex that doesn’t need to be pointed out that it’s a watch. Pointers are signs of damaged names.
Global corporate nomenclature became complex with little room for overly creative easy access domain naming while over friendly generic use has made the branding sector enjoying $500 billion yearly the beneficiary. Weak names need constant oxygen to survive. It’s not the complexity; it’s the simplicity of the issue that’s missing.
Esther Dyson – Handling the profusion of names and TLDs is a relatively simple problem for a computer, even though it will require extra work to redirect hundreds of new names (when someone types them in) back to the same old Web site. It will also create lots of work for lawyers, marketers of search-engine optimization, registries, and registrars. All of this will create jobs, but little extra value. To me, useless jobs are, well, useless. And, while redundant domain names are not evil, I do think that they are a waste of resources.
NJ – Has the Internet been good to our society? Have 200 million domain names served our commerce well? With a billion plus more new online users being added, what’s useless is to think that extra work is unnecessary. One internet, one world thinking demands global naming systems that will manage billions of domain names of sorts and types on a multilingual format for the global population. This is a formidable task that requires continuous expansion on all fronts. It’s not the question about useless work, it’s all about facing the future boldly and dealing with the exponential reality of 5 billion online users by 2020.
Esther Dyson – Imagine you own a patch of land and have made it valuable through careful farming practices good seeds, irrigation, fertilizers, and bees to pollinate the crops. But now someone comes along and says, We will divide your land into smaller parcels and charge you to protect each of them.
NJ – The agrarian style of cyber squatting originated and thrived under the cheap, no questions asked, domain name. It provided over 10,000 UDRP cases for lawyers to sort out the disputes at many thousands of dollars each. From the standpoint of business costs, well-structured and protectable names win their cases with ease. Not loosely composed, generic names that flew out of the dictionary.
Esther Dyson – Coca-Cola is that farmer. It and other trademark holders are now implicitly being asked to register Coca-Cola in each new TLD – as well as to buy its own new TLDs. Otherwise, someone else may create and register those new TLDs. ICANN’s registrars are already offering services to do this for companies, at a cost of thousands of dollars for a portfolio of trademarks. That just strikes me as a protection racket.
NJ – Famous brands like Coke routinely defends trespassing and wins. The bigger question is in the gTLD process, as complicated as getting a city to host the Olympics and when brand names, say, dot Deloitte or dot Sony would they trespass and secure Coke.Deloitte, or Coke.Sony? Would they offer their domains general public like in current system to do what, raise enough money to cover their one hour of electricity bill? This commonly fears mongering is purely based on old domain name mentality and a proof of lack of understanding among the marketers of the world. The old system was designed easy and free access to steal others identity, this gTLD system is far too expensive and complicated for petty theft. It will not end the trademark protection problems, but for sure put a new sober face on it.
Esther Dyson – The problem is not the shortage of space in the field of all possible names, but the subdivision of space in Coca-Cola’s cultivated namespace. The only shortage is a shortage of space in people’s heads.
NJ – The only shortage in people’s heads come from poor recall-ability of generic and diluted names. Which United? Which National? Which First? Weak and borderline brands are under threats for many reasons. Primarily, Western brands are facing the brands of emerging economies that are being bolstered through digital compression and portability; they clearly have the cyber branding edge. The gTLD is not sub-dividing any cultivated name space; it will only provide tools to create more touch points to its customer. What exactly did the early domain name bring to our society? Fast forward change, where unfit name identities broke down and collapsed along the way.
Esther Dyson – The issues are slightly different when it comes to generic TLDs, such as .green. I recently had a Twitter conversation with Annalisa Roger, founder of DotGreen.org, who told me about the value her group will be adding to .green: marketing, brand identity, raising money for NGOs. But I couldn’t help wondering why she can’t just add the same value to DotGreen.org. Instead, she will have to start with a $185,000 application fee to ICANN, and spend thousands more on lawyers to study and fill in application forms.
NJ – The $500,000 average cost of gTLD on any reasonable project is highly affordable in comparison to the production cost of a single TV commercial, or a few full page ads in major cities, or a logo-slogan, re-branding exercises; without the launch cost of course. A gTLD is not expensive; it is highly justifiable against its components of power and sub name branding architecture. It’s a sophisticated game and demands special maneuvers.The dot-branded generic names are a high risk entrepreneurial heaven of high risks and high returns. Getting a gTLD for the purpose of Cybersquatting someone else’s brand is ridiculous. Only cheap, dime a dozen, domain names make this option look attractive and lucrative. The bigger challenges are corporate nomenclature based. Is Green really better than Eco? Why? Which would sell more? Tel, Cell or Mobile? Car, Auto or Moto? What’s the difference between Ucar, Mycar, iDrive or Udrive from a usability and marketing suitability point of view, and which combination will create more dilution in the long run? This clearly points to the fear among global advertising agencies and branding services that the centrality of the gTLD application gets extremely intricate at the core of nomenclature. To admit this would be to admit that names do matter. This is where the “names as a pointer school of thought collapses.
One internet one world demands ‘one name one owner’ thinking.
Esther Dyson – Of course, you could argue that green already has quite a bit of value as a generic term that stands for something. Indeed, it makes me slightly uncomfortable that ICANN can claim control of it in order to sell it to someone. Suppose, for example, that a cheese maker buys .cheese (as was suggested by one person at a new-TLD meeting recently) and uses it to favor only its own brands?
NJ – Contrary to general perception, generic gTLD cannot be trademarked. They are licenses to drive a master name identity on cyber highways and create unlimited sub-names to join the race. The issuance of dot cheese to Kraft or Bata simple makes their communication and customer contact point more easily, by no means does it stop others from producing cheese or brand other types of cheeses or name brands. It is an open race for serious marketers no different than Wal-Mart buying TV spots on Super Bowl to keep their dominance. It’s an open market and all are free to play, if they know the rules.
Esther Dyson – Proponents argue that more TLDs would foster innovation. But the real innovation has been in companies such as Facebook, LinkedIn, Twitter, and Foursquare, which are creating their own new namespaces rather than hijacking the DNS.
Mr. Javed’s response – The social chatter is not name-branding but rather creating noise. The Facebook, LinkedIn types did not add any new nomenclature platform, but offered free usage of registration. Building a name identity with intentions to commercialize an expandable base can only be achieved when the name management organization is fully committed to deliver such tangibles. The gTLD is a formidable exercise in this pursuit and it will be very naive to assume that filling out a customer service card at McDonald’s or eVoting is creating namespace. The gTLD by virtue of its seriousness and size will be open to a lot of innovative applications along the way. There will be spectacular successes and catastrophic failures on most major new fronts.
Esther Dyson – Indeed, when ICANN started more than ten years ago, we were accused of commercializing the Internet. In fact, we were building an orderly market, setting policies for how much registries could charge, fostering competition among registrars, and making sure that we served the public interest. Unfortunately, we failed to deliver on that promise. Most of the people active in setting ICANN’s policies are involved somehow in the domain-name business, and they would be in control of the new TLDs as well. It’s worth it to them to spend their time at ICANN meetings (or to send staffers), whereas domain names are just a small part of customers’ and user’ lives. And that means that the new TLDs are likely to create money for ICANN’s primary constituents, but only add costs and confusion for companies and the public at large.
NJ – The Internet without domain names is basically useless. If ICANN is the mother operator of the Internet, obviously apart from security and hard wiring, global naming systems are its prime responsibilities. Success and creation of domain name devices are the only key to open the hidden universe behind the website.
Esther Dyson – Of course, if I am right, the DNS will lose its value over time, and most people will get to Web sites and content via social networks and apps, or via Google (or whatever supersedes it in the competitive marketplace). The bad news is that there could well be much superfluous expense and effort in the meantime.
The views expressed in this article are solely those of Esther Dyson. Copyright: Project Syndicate, 2011.
NJ – Names have provided eternal longevity to ideas and brands. Social media is a novelty of time. Bad names kill good brands. No matter how it’s chatted, typed, whispered, called, yelled or found on search, the fact remains: without a name there is no brand. The more unique and powerful the name, the more it climbs to the top while the more diluted, it sinks. Social mediums are just another place where good names can swim. Advertising provides flotation to sinking names. How well a name identity provides the global mindshare ensures the continuum of their success.