Benefits and Risks of Operating a New gTLD

When you apply for a new gTLD you are applying to run a registry business. You will be responsible for a critical and highly visible piece of Internet infrastructure. Just as Verisign is responsible for all the domain names registered in the .com top-level domain, so you would be responsible for all the domain names registered in your .something gTLD.

While operating a top-level domain registry offers exciting opportunities and rewards, it carries great responsibilities as well. The purpose of this brief is to help prospective applicants evaluate the new gTLD program by considering the benefits as well as the risks and responsibilities.

Potential Benefits

  • Entrepreneurship. Create your own business model and establish accessibility policies for your TLD. If your customers want tighter security, make your TLD a high-security zone.
  • Increased control. You set the rules and the price for those registering your TLD.
  • Ongoing revenue stream. Your customers could renew their domain names year after year.
  • Innovative marketing opportunity. Build better brand definition, brand awareness, brand loyalty and trust by having full control over your own TLD.
  • Innovative business models. When new gTLDs combine with other emerging Internet technologies, such as IPv6, RFID chips, and cloud computing, new products and services are possible.
  • Internationalized Domain Names (IDNs). Increase market reach by making the Internet completely accessible to users whose local languages use non-Latin characters.
  • Engage your community. Create a rallying point for supporters of your cause, community or culture to unite with a community-based TLD.
  • Bring together your geographic area. Celebrate your local citizens, commerce, activities, and culture with a geographic TLD.

Risks and Responsibilities:

  • Investment. In addition to the US $185,000 evaluation fee and ongoing registry operating costs, applicants must demonstrate sufficient financial depth to keep the registry fully operational for at least three years even if the business plan does not achieve its objectives.
  • Loss of Investment. There is no guarantee you will get the string you applied for. If you do not pass the extensive evaluation process you could lose some or all of your initial investment. As with any new business, getting the operation started does not guarantee that revenues will profitably sustain it.
  • Contractual restrictions. Running a TLD means you must comply with all the obligations of your registry agreement with ICANN. Even more restrictions exist when running a community-based TLD.
  • Staffing. Running a registry requires employing highly skilled technical operators and/or negotiating a mutually beneficial agreement with a trustworthy technical partner.
  • Competition. Your applied-for TLD could compete with a same or similar string(s), and indirectly with all TLDs, both generic and country code. If approved, your new TLD could encounter competition from unexpected sectors.
  • Uncharted territory. You will be pioneering on the cutting edge of technological innovation in a relatively new sector. You may have to find your way without other applicable business models for guidance.

This is not a complete list of all the risks. Do not rely on this list alone. You should do your own independent research and consult your own technical, business, and legal experts. This list is provided only as general information to get you started.

The introduction of new gTLDs will affect most organizations. Whether or not you decide to apply for a new gTLD, you should still pay attention to the process. In May 2012, once all the applied-for strings have been posted, you will have an opportunity to object to any that you believe would infringe your legal rights. Refer to Module 3 of the Applicant Guidebook for details on the objection process.