New IDN TLDs may pose problems for second level IDN holders.
For years, domain names were only available in roman characters. Domain names in these characters don’t make a lot of sense to web users who’s primary languages don’t use these characters.
But then so-called International Domain Names (IDNs) using non-roman characters became available. Domainers jumped on board and invested heavily. Many of these domains get solid type-in traffic or have been turned into search engine friendly destination sites.
There’s just one problem: regardless of the language and characters left of the dot, these domains still end in traditional roman TLDs such as .com.
That will soon change. As part of the new gTLD process, we’ll see lots of applications for IDN TLDs. This could render existing IDNs less valuable, but many questions remain. In many ways it’s like the mid-90s: there were risks as rules and regulations changed, but there were also big rewards.
If you registered IDN second level domains (non-roman characters left of the dot), you will not necessarily get the “.com equivalent” if it is ever released in a different language. There are a couple reasons for this. First, “.com” doesn’t necessarily translate into other languages and character sets. Second, the .com registry Verisign (NASDAQ: VRSN) may not be awarded the registry contract for .com equivalents.
Even if Verisign is awarded the equivalent, it will be up to the company to decide how to distribute them. It could decide to automatically forward these domains to the .com equivalent, offer them on a first-come, first-served basis, or offer existing .com holders the right to register them for a fee.
But there’s no guarantee Verisign will be awarded these IDN TLDs even if it applies. However, in the new gTLD process allows companies to challenge applications on the basis of likelihood of confusion.
ICANN’s Director, IDN Program Tina Dam notes, “Keep in mind that the fact that VeriSign does not automatically get to be registry operator to some translated or transliterated version of .com is a policy requirement.” In other words, she says, it was a community decision that ICANN will abide by.
There’s another risk for existing IDN domain owners. The next revision of the IDN technical standards may essentially void some of the characters currently used in already registered IDNs — even those that were officially approved for use before.
One concern many people bring up about IDNs is the potential to trick internet users in phishing schemes. For example, an IDN may look like “Paypal.com”, but the second ‘a’ is actually a different letter that looks similar to the roman ‘a’. This is not likely anymore, since domains can no longer combine two different scripts. Domains that were previously registered in two scripts will not be renewed.
Will risk takers who registered second level IDNs make out like bandits or fall on the “wrong side of the dot”? It’s unclear at this point. A couple IDN investors I talked to said they aren’t too concerned. They believe Verisign will go after any similar TLDs, and that “new .com” translations will be similar to .info and .biz: people who currently type in .com will keep doing it even if it’s in a different script.
Everything has some risk in it, the key is to assess the risk and invest accordingly.
Your comments and assumptions are a common viewpoint from those not intimately familiar with IDN’s. You also have to do a lot of research in the language.
I’ll use Japan as an example.
A good example is the adoptance of .com in Japan, see the following URL: http://search.yahoo.co.jp/search?p=%22.com%22&search.x=1&fr=top_ga1&tid=top_ga1&ei=UTF-8
You will see that for many years Japan webmasters have been putting up websites on an English domain, but branding with “Japanese Characters”.com – unknown to them their brand is an IDN.
here’s a great example:
One of Japan’s largest shopping sites http://www.kakaku.com, check out their banner, it is the Japanese characters meaning “price”. By the way, they don’t even own the IDN that’s showing in their banner! So for years, unknowingly Japanese business have been branding on an “IDN” before they even existed. I imagine most of these webmasters don’t even know what an IDN is today.
This just demonstrates how strong/fashionable .com is in Japan. And how an IDN.com is very marketable.
If you speak to native Japanese domainers, a lot of them will say there is no need for any IDN GTLD’s, typing .com is second nature, and also when written in a paragraph of text, a full IDN.IDN would get “lost” to the naked eye.
So in short, there is no reason to think that an IDN version of a new GTLD will be any serious risk to the .com. It’s the same argument for new English GTLDs, nobody sees those as a serious risk to unseat .com
To your point about the IDN version of “.com” and who gets it. You are correct, Verisign haven’t yet stood up and requested translated versions, but if they don’t, then who else will? .com is a brand, and it would be interesting to see the outcome of an organization other then Verisign applying for a translated version of .com
Of course IDN isn’t just about .com, recently JPRS the registry responsible for .JP cctld starting the process of applying for .Nippon (Japanese characters for Japan), and also posted on their website about a technical process to alias existing IDN .JP to the new IDN .Nippon
So is IDNing a risk – yes. And on the face of it, these risks have kept many people from diving in head first – good job I say, otherwise the Old Guard would have swept everything up years ago – but if you dig deeper, what you see is enormous potential, certainly one to big to just keep on walking by. I personally have some nice Japanese IDN .com and some nice IDN .jp – I don’t believe I can lose with this portfolio.
What we need is publicity (and ICANN will do that next year when the first IDN cctlds launch)
And browser pentration.. once these 2 things are in place and advertising agencies run with it, I think the landscape will change quickly.
Thanks for taking the time to write about IDN investing, if only to scratch the surface.
Mike, thanks for taking the time to give your detailed thoughts. You may be right about the .com branding — a couple people mentioned that to me which is why I mentioned it in the article. Isn’t it also true that many non-roman/latin browsers automatically append .com at the end of a string of characters?
I noticed during the Olympics the Chinese government was promoting the Olympics via a .cn domain. As well they have stated their preference to the .cn extension. Why type in two languages? ChinesedotChinese is what we are betting on. When you buy a idn.cn you get the English .cn extension and well as the dot.Chinese characters for .cn as well as for .China in Chinese! I think this is the sleeper at the moment. Big potential upside once new standards kick in in a few months and Chinese are able to type in their native language/symbols.
As for other languages same idea. Spanish.Spanish,
Russian.Russian
Italian.Italian
seems like a natural progression.
Cheers!
I think .com is a dead meat outside US.
I think in comparison to all the articles filled with inacuraccies I’ve read about IDNs this article is pretty good.
You can’t require everyone to have an intimate knowledge about IDNs.
And no .com is not a “dead meat” outside US. Not everywhere! In some countries – maybe, but a lot of local registries are way too greedy and have prices like 30-40 euros for domain or and the governments use the registries to censor uncomfortable people.
So a lot of foreign webmasters prefer to use .com but that’s not the case everywhere.
If you’re going to invest somewhere you better research before spending a ton.
IDN.com will quit the scene
I believe most if not all of these concerns have now been addressed in the year plus since this article was first written. For example:
http://idnblog.com/2009/12/03/exclusive-qa-chuck-gomes-verisign/