Architelos & Industry News

Show me the money: gTLD consultants talk financesPublished in dot-nxt.com , on March 7, 2012 by Edward Conlon

A financial report released by Top Level Domain (TLD) Holdings has shed light on the challenges facing gTLD consultants in a fiercely competitive market.

In the fifteen months to 31 January 2012, the company that owns consultants Minds + Machines made a $2.25 million operating loss. And according to chairman Peter Dengate Thrush, the company’s $117,000 revenue in that time did not come from any gTLD consultancy work.

Dengate-Thrush told .Nxt that Minds + Machines has only begun receiving gTLD-related revenue since 12 January 2012 when ICANN opened the application stage. He said until this year, the company has relied on other independent revenue streams.

He said that Minds + Machines, whose full package costs $100,000, allows clients to operate on a pay as you go model. This means that clients requiring services related to back-end registry and sunrise periods those that won’t be needed until applications are successful will not be charged until around 2013.

Dengate Thrush said he was confident that despite his company making sizeable losses, most clients will go on to pay the full $100,000 fees. Most will take it very seriously, he said. The great majority will stay.

The costs of delay

The report might seem unsurprising given that clients were uncertain about a programme delayed several times before. But it does show that the delayed programme has haemorrhaged some consultants finances, forcing them to find alternative revenue streams.

Rival consultants Architelos reportedly made more than $1 million in revenue in its first year. According to chief executive Alexa Raad, half of this revenue came from consultancy. But she said not all of this consultancy revenue derived from gTLD work, because Architelos provides strategic support on wider domain industry issues.

She added:

“Since the first of the year, we’ve had a tremendous jump in business as companies and organizations decided to investigate TLDs.”

We can see that gTLD consultants are operating in a competitive market where uncertainty prevails. But while Architelos did not limit its work to new gTLD applications, Minds + Machines did ñ and may have suffered as a consequence.

However, a recent development suggests that not only is there a competitive and challenging market, consultants have employed contrasting strategies based on their strengths.

Slot money

Last month,TLD Holdings raised $14.2 million on the AIM market of the London Stock Exchange, wiping out its losses, with chief executive Anthony Van Couvering saying there was now a $25 million cash balance. According to a statement:

“The company intends to use the placing proceeds to provide additional working capital and in particular, to fund the application slots and subsequent fees for new gTLDs on behalf of itself and clients of Minds + Machines.”

Was this TLD Holdingsí trump card? Did it wait and wait, knowing that once the gTLD application stage finally opened it could raise substantial funds from investors? It seems so.

Dengate Thrush confirmed that no clients signed before January 12, saying that they would be foolhardy to do so. But knowing that it could use the stock market to its advantage, Minds + Machines was not under the same pressure as private firms, and may have believed it unnecessary to provide wider consultancy services.

It is also notable that while Architelos takes no financial interest in any applications, Minds + Machines does. A spokesman said:

“In many instances TLDH is effectively partnering with the client which means in theory application fee costs can be shared.”

Minds + Machines will also be applying for its own gTLDs. So far it has registered 40 application slots and according to Dengate-Thrush, more is likely. We don’t know what proportion of these slots are for clients and we don’t know how many strings have been applied for: each slot allows 50 strings.

But, it raises interesting questions about Minds + Machines strategy. It has a lot of money, is willing to spend it on its own applications, and seems to be covering some portion of some clients fees.

Where will it put its money? Will these be joint or independent projects? And will it be able to bully other applicants at auction?

We will only know for certain on 1 May 1 2012, when ICANN publishes the full list of gTLD applications.



Architelos Marks First Anniversary as New Top-Level Domains Set to Re-Shape WebPublished in marketwatch.com, on February 23, 2012 by Architelos

Company Founded by Domain Name Veterans Tops $1 Million in Revenue

As Architelos, Inc. celebrates its first year of business, CEO Alexa Raad said the deregulation she predicted a year ago has begun to re-shape how online business is conducted, with more to come when new top-level domains (TLDs) begin implementing innovative business models that will change online marketing, advertising and search, and will enable both for-profit and non-profit entities to organize more powerful online communities.

“With our vision of how these changes will unfold, Architelos is in a great position to grow in 2012,” Raad said. “New registries will need reliable, cost-effective TLD services at the outset to ensure a successful launch. Existing registries will need to understand how they can compete effectively in the deregulated environment. Our experience launching and running registries and our innovative software solutions will serve them both well.”

In its first year, Architelos earned more than $1 million in consulting and software services fees.

A Trusted, Independent Source

The company has positioned itself as a trusted independent industry expert, with a senior team of seasoned domain name system veterans.

“Our corporate structure and client approach contributes to our success,” Architelos co-founder and COO John Matson said. “We are not applying for any TLDs, so we won’t have any conflicts with our clients who are applying for new TLDs. We are also a solely self-funded company with no interests other than to provide independent and trusted guidance to our clients.”

Architelos provides strategic planning and TLD managed services. Its international client base includes new TLD applicants for both generic words and worldwide brands, investment and management consulting firms, and established generic and country code registries. Clients include Verisign, the British registry Nominet, the .music applicant Far Further and the Canadian Internet Registry Authority, among others.

Architelos Pioneered Innovative, Registry-Specific SaaS-based Services.

Anticipating industry needs, Architelos introduced in July of last year its Top-Level Domain Management Service (TMS(R)), distilling the experience of the Architelos senior leadership team in building registries and launching and managing TLDs. With TMS, companies can outsource the management of the critical business and front-office functions of a registry to Architelos. TMS enables registries to reduce the costs of procuring, customizing and integrating software.

TMS uses a SaaS-based service model, thus mitigating risks. The services are compliant with the Internet Corporation for Assigned Names and Numbers (ICANN) requirements and are designed to work with any back-end registry system.

TMS simplifies the selection, set-up, configuration and integration of the suite of software products and services that are needed to implement the critical business functions of a registry, such as financial and general ledgers, management reporting, work flow processing, marketing and domain protection services.

Architelos also introduced a year ago the Business Case Builder, a registry-specific financial tool that helps applicants answer financial questions in the gTLD Applicant Guidebook and assess the impact of different business models.

The BCB tool will be transitioned to the TMS services bundle in 2012. Additional services within the TMS are slated to be announced this year.

Architelos, Inc. provides consulting and managed services for clients applying for new top-level domains (gTLDs) for both brands and generic keyword applicants. Services include assistance developing gTLD strategies, new gTLD application support, launching new gTLDs and turnkey gTLD management services (TMS(R)). The company was founded by Alexa Raad, former CEO of PIR, the .ORG top-level domain registry, and John Matson, a veteran management advisor to Fortune 500 companies. Architelos’ senior management has collectively more than 30 years experience in the domain name industry. Follow Architelos on Twitter and Facebook.

SOURCE: Architelos, Inc.



Last Minute Tips for a Solid gTLD ApplicationPublished in circleid.com, on February 22, 2012 by John Matson

With the new top-level domain (gTLD) application process down to the last two months, here are three last minute tips on how to submit a successful gTLD application to ICANN:

  • 1. Show your work
  • 2. Don’t go negative
  • 3. Make your application stand alone

Show your work. Sometimes the most obvious information is also the most important. In ICANN’s supplemental notes under the “Best Practices” section, the first best practice ends with the parenthetical statement (i.e., show your work). For an applicant, these may be the three most important words in all the ICANN guidance.

Your written application and attachments are the only means to communicate with the panel evaluators reviewing your application. And any individual panel evaluator may review 10 to 50 applications. Remember back in algebra when your teacher made you write your math calculations on each side of the equation? It is the same idea here. Make it easy on the evaluator to understand your rationale.

Not sure if your Continuing Operations Instrument (COI) calculation is “correct” because you are choosing between straight-line, stepped-level or tax-table method of COI guidance table interpretation?

Are all of your calculations hidden away in a mass of spreadsheet attachments to each financial answer?

Put key tables or equations in-line with your answers so that the evaluators can easily understand your calculations. That will help simplify their review of your gTLD application. If your answer is “not applicable,” explain why or why it is zero. Show your work.

Don’t go negative. It is not only a political campaign strategy. It is also a worst-case scenario principle.

When you evaluate your worst-case scenario, make sure that your cash balances never go negative during any month of the three years of operation. That would be a bright red flag to the financial evaluators that you have not resourced your string adequately. Worst-case scenarios should include significant cash inflow reductions coupled with reasoned cash outflow reactions.

The key characteristic to be demonstrated is sustainability of the registry. If the cash balance goes negative, it’s game over. Increase your initial cash funding to cover the shortfall or take more drastic action to cut costs. Don’t go negative.

Make your application stand-alone. Let’s say that you are applying for three top- level domains and have a parent company that is allocating cost down to the three applications. Each application absorbs one-third of the parent cost and all things are good. Right? Wrong. You have now just made the cost structure of your application dependent upon the approval of another application. What if only one of your applications passes initial evaluation? Does that mean that ICANN should burden each application with 100% of the parent cost structure as a worst-case scenario?

How you organize your parent business is important. But how you determine the method to allocate those costs to multiple applications is more important. First, start with the unique elements of each individual registry and develop the cost rationale for independently running each string. Then find comparative cost structures in the industry and provide your evaluators a clear rationale for your estimates.

The total cost of your individual applications will likely add up to more than your planned parent company allocated, but now each application stands alone in its cost structure. This also provides a more conservative cost estimate for the application. Make your application stand-alone

These are basic tips but ones that can help make your application more reader friendly to the panel evaluators. Submitting an application by April 12 is only the first stage of a long race. But only those who pass initial or extended evaluation have the opportunity to go on to the next stage. To increase your odds of participating in the next state, the old adage still rings true: “put yourself in someone else’s shoes,” in this case of course, the shoes are those of the panel evaluators. Remember to show your work, don’t go negative and make your application stand-alone.



What’s In A (Domain) Name? Clearing Up TLD ConfusionPublished in CMO.com, on February 14, 2012 by Alexa Raad

The campaign to halt the new top-level domain program generated great heat, but little light, leaving CMOs in the dark.

First, CMOs will need to unlearn the misconceptions that were propagated prior to the launch of the program, which began accepting applications last month. Some critics confused second-level domain names with generic top-level domains (gTLDs), thereby equating domain-name attributes and issues to new gTLDs—for example, cybersquatting.

gTLDs are, of course, to the right of the dot, while domain names are to the left. The distinction is important.

Under the new gTLD program, ICANN will not award a brand name as a TLD unless the applicant is the legitimate owner of the trademark. Thus, there can be no cybersquatting of a brand name as a TLD, eliminating any reason to defensively apply and then operate your own branded part of the Internet real estate as a registry unless you have a strategic reason for doing so.

Or do you simply need to protect your brand names as domain names? Previously, if someone other than the trademark owner bought a trademarked name as a domain name, the legitimate brand would need to know about it and begin an objection process to take down the domain name. Under the new TLD program, there is protection before the domain name is sold. Brands can register their trademarks in a clearinghouse. Registries would be required to check the database for protected names. Acura, for example, can register its brand names in the clearinghouse. If someone won the right to run a .car TLD, then no one but Acura could register the domain name acura.car.

A domain name is like renting an apartment. You can live there and have your own unique address, but you are not the owner. The apartment building owner dictates who can live there and under what rules (security, parking, inside alterations, outside access, etc.). It is much the same with TLDs. As owner of a TLD, you decide who gets a domain name and what rules they must follow.

Though TLDs will not be right for every company, CMOs must understand their potential for targeted marketing and revenue opportunities, encouraging customer loyalty, and increasing security. Consider these possibilities:

>> Imagine eBay offering its power sellers their desired name with an .eBay address—for example, [email protected] Such an address helps retain power sellers by clearly distinguishing them from other sellers, but it also boosts security. Meanwhile, with the required registration information, eBay would have verified email addresses that would signal to buyers that eBay has vetted its top sellers.

There are also new cross-promotional possibilities. What if a customer goes to an eBay power seller’s site but doesn’t find what she’s looking for? Today, she’ll leave the site and look elsewhere, likely outside of eBay. But with a TLD, eBay might offer sellers the chance to post ads or coupons for products on other seller sites. If used by the buyer, the referring site gets a small commission and the second site gets a sale from a customer it didn’t attract. Meanwhile, the customer stays longer on the eBay site, giving eBay a chance to offer other incentives, i.e., “Buyers of this item also liked…” As any online retailer will tell you, keeping a customer on its site increases the probability of a sale.

>> Disney operates at least 37 Web sites in 34 countries, meaning it has multiple registries to work with: .com, .uk, .co, .cn, .jp, etc. Each has its own rules, regulations, and security measures. Under a .disney, the company could reduce costs and more efficiently manage and integrate all of its online properties with a rational hierarchy of products. As a TLD, Disney would also have something it doesn’t as a Web site: real-time inter- and intra-TLD traffic information (not just Web site traffic). So it could know which character of a new movie is getting the most traffic and merchandise appropriate products to its various Web sites in real-time.

>> Nonprofits might also benefit from their own TLD. What if the Avon Foundation for Women provided every volunteer with a free domain name—for example, JaneDoe.AvonWalk? The domain name could be bundled with easy site creation, logos, links to social media, and fundraising tools, replacing mailings and manual tracking tools. The email address [email protected] enables Jane to avoid using her personal email while joining others to build awareness for the cause. And Jane’s recipients would be assured that any solicitation coming from an .AvonWalk address would be legitimate.

>> Host cities might have their own address—e.g., NYC.AvonWalk. Again, Avon offers templates so each city could provide consistent information and perhaps have directories of volunteers.

>> Corporate sponsors might have a branded site, such as Reebok.AvonWalk, where they would target their messages and offer promotional merchandise to volunteers.

>> Let’s imagine .pfizer. One of its challenges is to stem the sale of counterfeit Viagra, which damages Pfizer’s brand reputation and sales. Pfizer might offer a domain name under a .pfizer TLD to all of its legitimate Viagra resellers. Thus, anyone would have confidence buying from a .pfizer site that he or she is getting the real product.

Pfizer might be a case where a company distributes domain names to only authorized entities—distributors, resellers, suppliers, etc. Remember: Owning a TLD doesn’t mean you must sell domain names to anyone. You control the distribution channels and can impose any verification process you choose to ensure that the entity requesting a domain name is legit.

CMOs must begin by clearly defining their company’s online business strategy. Many will rightly conclude that a TLD is not necessary.

But with the end of the application period less than three months away, CMOs face a judgment call. Because ICANN has not committed to a specific time table for the next round of TLD introductions, CMOs who avoid that decision process may find themselves at a competitive disadvantage once the new TLDs rollout.

Read related article,Top-Level Domain Opportunity Awaits CMO Trailblazers.”



The opportunity for .Islam, .Riyadh and .ArabPublished in Arab News, on January 18, 2012 by Molouk Y. Ba-isa

After more than seven years of planning, the Internet Corporation for Assigned Names and Numbers (ICANN) initiated a process last week that could trigger a dramatic expansion of the Internet. ICANN has begun accepting applications for new generic top-level domains (gTLDs).

The world of .com, .gov, .org and 19 other gTLDs will soon be expanded to include all types of words in many different languages. For the first time generic TLDs can include words in non-Latin languages, such as Chinese, Arabic, Hindi or Hebrew. For instance possible gTLDs could be .food, .Riyadh or .Islam.

There was intense pressure from large companies and US lawmakers to delay or limit the program, but ICANN rebuffed the objections. “Many of the recent concerns expressed about the new top-level domain program are more about ‘perceived’ problems than actual deficiencies,” said Steve Crocker, chairman, ICANN. Global brands worry that they will have to spend up to two million dollars annually in order to protect trademarks across the new gTLDs. Plus, they’ve already spent millions promoting their current domains, which may be diminished by the new gTLDs — with customer confusion and online fraud cited as negative outcomes. Before imagining that any cyber squatter can take a gTLD and abuse it, know that owning one of these domains doesn’t come cheap. Alexa Raad, CEO of Architelos wrote in a CircleID blog that applying for a new gTLD is an expensive process, costing an estimated half million dollars for the application and legal and professional services — assuming there are no other applications for the same string or name, nor any objection to the filing. The minimum cost estimated is about $250,000 and that’s far from realistic.

Despite the expense, with the process launched, applications are being received. Cities including New York, Paris and Berlin have already announced that they will be applying for .nyc, .paris and .berlin, as have companies such as Canon and Deloitte. Of the approximately 160 new top-level domain applicants that have been publicly announced thus far, about 32 percent are based in the USA, 10 percent in Germany and less than one percent are from the Middle East/Africa region. “Here is yet another example of the Arab region risking missing the boat when it comes to new technical developments,” said Nabil Alyoussuf, director of Dubai-based domain consultancy DotBrand Solutions MENA. “We are currently working with some companies and governments all over the region who have grasped this opportunity to obtain better presence, security and control of the Internet through their own gTLDs. But most are still taking a ‘wait and see’ approach while the rest of world is taking action.” The most alarming missed opportunity will be for new domain names in Arabic. The Internet will be flooded with new languages, as “IDN” domain names in Chinese, Hindi and dozens of other scripts, are introduced through the new gTLD process.

“There are currently only 21 gTLDs, controlled by a small number of US companies,” said Alyoussuf. “Even if we use a conservative number, the introduction of 1,000 new gTLDs will be the biggest change ever to the domain name system, and an opportunity for non-American organizations to take control of core infrastructure of the Internet. This is the opportunity to have Arab-owned equivalents of .com, .net and .org — in Arabic. The opportunity may not arise again for five, even ten years.”

Alyoussuf noted that cities as small as Melbourne, Australia and Cologne, Germany are obtaining their own gTLDs. He can’t understand why with all the millions of dollars invested in establishing Arab cities on the world stage that there isn’t more attention to the gTLD registration.

“Similarly, when the largest Western companies start using their own gTLDs, these will become a mark of truly world-class brands,” said Alyoussuf. “Right now, major Arab corporations have the opportunity to join those brands. The application window closes on April 12. Once gTLDs hit the Internet it’s certain that brands using the current .com domain will run the risk of being perceived as ‘lower’ than those brands that have their own TLDs.”

One point that the entire Muslim community will want to watch is that there is the potential for an application for .Islam or .Muslim. ICANN claims that “community” applicants will be given preference for such a registration. ICANN regulations have provisions for government vetoes as well as public objection and arbitration procedures designed to prevent any domain getting into the wrong hands. It is essential that Muslims are active in following any application for a gTLD associated with their faith.



ICANN Can – and Will – Open the Doors for New Domain Names ThursdayPosted in brandchannel January 10, 2012 by Mark J. Miller

Plenty of brands (not to mention lawmakers and regulators) are not happy that the Internet Corporation for Assigned Names and Numbers (aka ICANN) is going right ahead — despite 11th hour hearings — and opening the doors Thursday for a possible barrage of applications for new generic top-level domain names (.brandchannel, anyone?)

There are currently about 20 such domains (.mil, .edu, .gov, etc.), while so-called gTLDs will add the likes of .canon as companies can snap up their brand names as domain suffixes. It’s taken more than six years of hemming and hawing, but even on the eve of dotbranding, the move is still creating controversy among brand holders.

The fear is that those doors will turn into floodgates, and brands will find cybersquatters registering for their trademarks or similar words to their trademarks. The $185,000 registration fee should scare some off, but it also is a hefty price for corporations to pay to make defensive registrations. Reuters reports that Lawrence Strickling, administrator of the Commerce Department’s National Telecommunications and Information Administration, sent a letter to ICANN last Tuesday asking the organization to find ways to make it so such registrations aren’t needed.

“In meetings we have held with industry over the past weeks, we have learned that there is tremendous concern about the specifics of the program that may lead to a number of unintended and unforeseen consequences and could jeopardize its success,” Strickling wrote, according to Reuters.

Rod Beckstrom, ICANN’s president, told Adweek that the U.S. government has a seat on ICANN’s Government Advisory Committee and has been able to address its qualms directly. He also noted that applications won’t just be awarded on a first-come, first-serve basis.

“After we close the application window in early May, we will publish all the applicants and [TLD] names and everyone has the right to complain,” he told Adweek. “Then for seven months any party can file an objection, including on intellectual property grounds. An independent panel of three experts will make a decision to determine if a party has the right to the TLD or not.” He also points out that ICANN is creating a trademark clearinghouse to allow companies to register all of their trademarks so that ICANN can let them know when anyone tries to use one of their trademarks.

Beckstrom isn’t sure if ICANN will get several hundred applications or 4,000. “We really don’t know,” he told Adweek. “We’re moving into new territory. This is the largest opening in the history of the domain name system. It’s also the most international opening; previous rounds did not allow international domain names. It’s by far the most complex program. We think the net benefit will be a secure and stable Internet domain name system that will continue to expand and support the growth of the Internet and allow innovation.”

Alexa Rand, former CEO of the .org registry and current CEO of the consultancy Architelos, notes in Ad Age that a new registry name could cost a company $500,000 over time with registration fees and technology costs. However, it could get pricier than that. If two or more companies want the same domain name, it will go to a bid and some expect prices to go up to $1 million.

The application process closes April 12 and ICANN should release the list of applicants within two weeks after that before beginning to hear complaints throughout the month of May. Click here for more on the pros and cons of a dotbrand URL and let us know what you think in the comments below.



Web-Domain Plan Launches This Week — Are You Prepared?Published in AdAge January 09, 2012 by Jason Del Rey

Despite heavy opposition from some members of Congress and the Association of National Advertisers, among others, the Internet Corp. for Assigned Names and Numbers on Jan. 12 will begin accepting applications from businesses and other groups to create and operate pieces of internet infrastructure known as generic top-level domains, or gTLDs. These can cover everything from .facebook to .lawyers. Here’s what brands need to know about the process of buying one — or protecting their current brand assets:

Prepare to pony up

To buy a top-level domain, plan on spending at least $500,000, including the initial application fee and technology costs, according to Alexa Raad, former CEO of the .org registry and current CEO of the consultancy Architelos. That makes it even more important to consider whether you have a real business case for the new gTLD.

Be proactive about protection

Register your brand with ICANN’s trademark clearinghouse. With that registration, a brand such as .pepsi won’t have to apply for and purchase the gTLD version of its name if it doesn’t want to use it.

Anticipate competition for your name

In cases where a brand only has trademark rights in a specific industry (say, Delta Air Lines vs. Delta Faucet), both parties could make the case for the gTLD — in this case, .delta. If the two parties can’t come to a resolution on their own, the gTLD will be put up for auction. Jeff Ernst, a principal analyst at Forrester Research, expects some gTLDs to fetch more than $1 million at auction.

Watch the April 12 deadline

The application period closes April 12, and two weeks after, ICANN will publish information about every application it received. Starting in May, companies will have the opportunity to object to any new gTLDs they feel infringe on their trademarks.

Create a policing strategy for second-level domains

This is the section of a domain name before the dot. Trademark holders who have registered with the clearinghouse get first crack at purchasing second-level domains on new gTLDs (pepsi.soda, for example). The clearinghouse registration will notify trademark holders if another party buys a second-level domain that infringes on the trademark holder’s legal rights.



Architelos Launches ‘Business Case Builder 2.0’ For gTLD Applicants

Adds more gTLD financial planning features, addresses ‘Question 50’ and extends functionality to cover more types of brand and keyword generic top-level domains

RESTON, Va., Nov. 29, 2011—After the successful introduction of the first ever financial forecasting tool specifically designed for generic top-level domains—the Business Case Builder (BCB), Architelos, Inc. today announced BCB 2.0 with new features that enhance existing financial planning capabilities and reports and extend functionality to more types of gTLDs, including those used by companies for internal purposes only (closed gTLDs). The BCB 2.0, a secure online tool, enables prospective new gTLD applicants to understand and evaluate the financial consequences of new business models and generates data in the exact format required by the financial criteria section of the ICANN Applicant Guidebook. Architelos has also automatically extended the new functionalities to all current BCB customers at no charge.

“The Business Case Builder has already helped many applicants quickly and accurately develop expense and revenue forecasts, in both the cash and deferred basis as required in the domain name industry,” Architelos CFO Norbert Grey said. “Now, we’ve taken it to the next level, adding enhancements that allow applicants to spend more time developing their gTLD strategies and less time on accounting.”

Enhancements include:

  • Specialized sheets for a dotBrand business model and closed TLDs
  • New planning sheets to forecast the entire P&L (including all OPEX)
  • Specialized sheets for staff planning and capital expenditure
  • Premium names revenue forecasting
  • Monthly P&L, balance and cash flow sheets
  • “Source of funds” planning sheet to help determine required funding for forecasted business
  • Easy production of multiple scenarios such as “most likely”, “worst case” and “what if”
  • 30 standardized reports available with simple “drag and drop” driven reporting

BCB 2.0 Simplifies Addressing of ICANN’s Cash Reserve Requirement

In addition, BCB 2.0 addresses one of the most critical and complicated questions facing applicants, namely Question 50 in the gTLD application (PDF), which asks the applicant to calculate the amount of the three-year cash reserve, or “continued operations instrument,” required by ICANN. “The BCB not only proactively calculates the amount of the cash reserve,” Grey said, “but by using artificial intelligence rules, BCB 2.0 also allows for automated accounting of the reserve through either a letter of credit from a financial institution or through an escrow account.”

Verisign has supplied the BCB to a number of gTLD applicants. “Navigating the financial requirements of the new gTLD program and quantifying the real-world value of a new gTLD business plan are among the key challenges facing prospective new gTLD applicants,” said Pat Kane, Senior Vice President and GM Naming Services at Verisign. “Business Case Builder is a valuable tool that helps applicants address these critical challenges, giving them an important edge in the upcoming application process.”

BCB 2.0 is available now via the Architelos website, and will available at the same price as the original BCB until Dec. 15. A BCB tutorial and detailed descriptions of the 2.0 enhancements are available on the Architelos website.

Architelos, Inc. provides consulting and managed services for clients applying for new top-level domains (gTLDs) for both brands and generic keyword applicants. Services include assistance developing gTLD strategies, new gTLD application support, launching new gTLDs and turnkey gTLD management services (TMS®). The company was founded by Alexa Raad, former CEO of PIR, the .ORG top-level domain registry, and John Matson, a veteran management advisor to Fortune 500 companies. Architelos’ senior management has collectively more than 30 years experience in the domain name industry.



Critics stage last-ditch effort to derail domain name expansion planPublished in Computerworld December 20, 2011 by Carolyn Duffy Marsan

Debate around a controversial plan to add hundreds of new domain name extensions to the Internet infrastructure has reached a fever pitch in the nation’s capital, as critics engage in a last-ditch effort to scrap or delay the plan, which is scheduled to launch Jan. 12.

Both the Senate and House of Representatives have held hearings in the past two weeks on the plan by the Internet Corporation for Assigned Names and Numbers (ICANN) to greatly expand the number of generic top-level domains (gTLDs) such as .hotel and .paris.

While U.S. Commerce Department officials have been supportive of ICANN’s multi-stakeholder process for creating new gTLDs at these hearings, representatives of U.S. corporations and nonprofits say it will be a significant financial burden for them to protect their brand names and trademarks in so many new Internet names.

BACKGROUND: Senators, critics question ICANN generic TLD program

The loudest critic of ICANN’s new gTLD program is the Association of National Advertisers (ANA), which is conducting a full-court press to persuade the Commerce Department to force ICANN to stop or postpone the program’s January launch. ANA’s primary complaint is about the cost for U.S. corporations to purchase defensive registrations for their trademarks in the new name extensions.

“This cost alone could be in the hundreds of thousands of dollars per brand name, creating a multimillion dollar liability for major corporations and a multibillion dollar cost to the industry,” Daniel Jaffe, executive vice president of government affairs at the ANA, told the Senate during its recent hearing on new gTLDs. Jaffe also cited concerns about consumer confusion resulting from the new Internet names as well as the risk of increased cybersquatting.

Angela Williams, senior vice president and general counsel of the YMCA, told senators that U.S. nonprofits are worried that “the enormous cost and financial burdens of the proposed structure of the new Generic Top-Level Domain Name Program will pose severe hardship and burdens on each of us. We also share concern about the increased risk of public confusion … resulting from unauthorized use of organizational trademarks.”

Another outspoken opponent of the new gTLD program is Federal Trade Commission Chairman Jon Leibowitz, who on Dec. 16 sent a letter to ICANN stating that the new gTLD program as currently organized “could pose a significant threat to consumers and undermine consumer confidence in the Internet.”

The FTC has asked ICANN for a number of changes to the program, such as reducing the number of new gTLDs that will be approved in the first round, monitoring consumer issues that arise during this round, and assessing each proposed gTLD from the perspective of consumer harm that it could cause.

Despite the loud criticism of the new gTLD program from many quarters, it appears that there is little that the FTC or U.S. Congress can do to stop or delay the ICANN plan. At a Dec. 8 hearing of the Senate Committee on Commerce, Science and Transportation, Sen. Amy Klobuchar (D-Minn.) admitted such and merely requested that ICANN “listen to our concerns as you go forward.”

The House Energy and Commerce Committee Subcommittee on Communications and Technology held a similar hearing Dec. 14, where members urged ICANN to run a pilot project first before opening up the Internet to hundreds — perhaps thousands — of new domain name extensions. But the House also lacks authority to require this change.

Meanwhile, ICANN continues to defend its new gTLD program as the result of five years of debate that was open to all Internet stakeholders. ICANN says the hundreds — perhaps thousands — of new gTLDs will increase competition, choice and innovation for organizations that do business online. ICANN also says the new gTLDs will offer better protection for intellectual property and better defense against malicious conduct than the original gTLDs, such as .com, .net and .org.

Kurt Pritz, senior vice president of stakeholder relations at ICANN, told the Senate committee that the new gTLD program “is consistent with ICANN’s mission to increase consumer choice, competition and innovation. Organizations will now have the opportunity to apply for gTLDs in the scripts of the world’s languages, to open the world’s marketplace further and to welcome the next billion non-English speaking users to the Internet.”

Experts predict the new gTLD program will kick off in January as planned.

“I’m cautiously optimistic” that ICANN will launch the new gTLD program on Jan. 12, said Alexa Raad, former CEO of the .org registry and now CEO of Architelos, which offers consulting services to domain name registries. Delaying the program is “a political risk not only to ICANN but to the Internet in general. The economic interests who have been planning and wanting new gTLDs are going to go forward and they are going to give up on the consensus-building approach taken by ICANN. … It’s going to fracture the DNS root and that’s irrevocable harm.”

ICANN has been debating its new gTLD program for five years and finally gave it the go-ahead in June.

MORE: ICANN finally approves expansion plan for top-level domains

Currently, the Internet has 22 gTLDs, including .com, .net and .org. More than 215 million domain names were registered as of August 2011 (PDF), with .com names accounting for more than 90 million of them, according to Verisign.

Read more about lan and wan in Network World’s LAN & WAN section.



ANA ramps up protests of ICANN domain name planPublished in BtoBonline.com December 20, 2011 by Sean Callahan

The Association of National Advertiser’s drumbeat against the Internet Corporation for Assigned Names and Numbers plan for launching a new program of generic top level domains continued even as the Christmas holiday approached this week.

ICANN’s gTLD program will give marketers the option of reserving so-called brand gTLD’s, such as .cocacola or .cisco, or gTLD’s such as .laptop or .insurance. It’s an option the ANA and other marketing groups, which have banded to together to create the Coalition for Responsible Internet Domain Name Oversight, apparently do not want—at least not in the form currently proposed.

And most marketers sure don’t want to pay $185,000 to go through the application process for a gTLD. “(CMOs) see the pricing as predatory,” said Donovan Neale-May, executive director of the CMO Council, which has not taken a position on the new gTLDs but has been urging its members to plan for the program’s launch.

On Monday, the ANA issued a press release applauding the Federal Trade Commission’s letter to ICANN Chairman Stephen Crocker and CEO Rod Beckstrom lambasting the gTLD program, which is slated to launch an application period beginning on Jan. 12. “A rapid, exponential expansion of gTLDs has the potential to magnify both the abuse of the domain name system and the corresponding challenges we encounter in tracking down Internet fraudsters,” read one complaint in the FTC letter.

This month, the ANA has also looked to get other parts of the U.S. government on its side as the organization’s exec VP-government relations, Dan Jaffe, testified in hearings before U.S. Senate and House committees. Jaffe’s testimony focused on the application expense, the difficulties involved in trademark protection and the lack of “consensus” supporting the launch of the program.

In testimony before the Senate Committee on Commerce, Science & Transportation, ICANN’s Kurt Pritz, senior VP-stakeholder relations, focused on how the gTLD program was subjected to more than 45 comment periods since 2005. “This program did not evolve in a vacuum,” Pritz said in an interview with ITM.

“Everybody gets a chance to talk, but only a few people get listened to,” Jaffe said in an interview with ITM, adding: “We should use this money for job creation. There are a lot better investments we could be making.”

Esther Dyson, who was the founding chair of ICANN between 1998 and 2000, also testified before the Senate Committee on Commerce, Science & Transportation. She views the new gTLD program as unnecessary. “If it ain’t broke, don’t fix it,” she said at the conclusion of her remarks.

But unfortunately for the ANA, neither the Senate nor any other government entity has jurisidiction over ICANN, an independent body. The program appears poised to move forward as ICANN’s leaders are touring the world, most recently with stops in Russia and China, to take last-minute questions about the new gTLDs.

It may be time for marketers to stop protesting and start planning.

“The fact is that this program is happening, and marketing leaders need to drive their companies to a decision,” said Jeff Ernst, principal analyst at Forrester Research.

Some marketers have announced plans to pursue new gTLDs. For instance, Hitachi Ltd. and Canon Inc. have said they would apply for .hitachi and .canon, respectively, although they have revealed little else about their plans.

“A lot of marketers are looking at this as a strategic decision and saying little about it publicly,” said Liz Miller, the CMO Council’s VP-marketing programs and operations.

Many observers believe marketers are looking at the new gTLD program as a threat rather than an opportunity. “The innovation is happening in companies that are looking at it strategically, not tactically or defensively,” said Ernst, who said many consumer and “high-tech b2b” marketers are contemplating gTLD applications.

Alexa Raad, CEO of Architelos, a TLD consulting and managed registry services company, said marketing executives have three choices when grappling with the new gTLD program: “Do nothing, apply or defend against somebody else applying. Each of those choices has its own disadvantages and costs. What hasn’t been talked about is the benefits of gTLDs.”

Raad said that among the opportunities for marketers are the ability to bring far-flung websites under a single gTLD. For instance, she pointed out that Disney had at least 37 different websites that might be more easily found by consumers and managed by the company under .disney.

She also said companies such as General Motors or any b2b company that sells through distribution could benefit by having a gTLD for its dealer or distributor base. A .chevy, for instance, could help Chevrolet dealers with security.

In the end, Raad was dismissive of the ANA’s protestations against ICANN’s program: “They’ve spent quite a bit of time opposing it without providing guidance to their members and agencies,” she said.