Friday, June 22, 2012

Of Donuts and Domain Names

Readers of entreVIEW may recall that I wasn’t very enthusiastic about the expansion of generic top level domain names (gTLDs) authorized by ICANN (Internet Corporation for Assigned Names and Numbers).  So when ICANN published the first list of applications on “Reveal Day,” last Wednesday (June 13, 2012), I didn’t drop everything to pore over the list.
Some did, and advised that there were 1930 total applications, but no real surprises, nor any particularly interesting applications. (Somewhere I seem to recall a prediction that there would be maybe 500 applications in the first round, so the sheer volume intrigued me).  These early commentators also pronounced Google and Amazon as two of the top applicants with approximately 100 and 75 applications, respectively, and indicated that about one-third of the applications were filed by organizations protecting one or more significant brands, while several common terms were the subject of multiple applications. No surprises.
When I finally took a few minutes to look at the list, I admit that I didn’t find anything that “surprised” me, but I did find a number of things that were nevertheless interesting.
While there were multiple applications for such gTLDs as APP, ART, HOME, SHOP, BLOG, and INC, there was only one each for marks such as ATTORNEY, BEER, and COMPANY. (I expected single applications for famous trademarks – NIKE, AOL, GOOGLE, DUPONT – but BEER?) Amazon filed its applications through its European corporation. United TLD Holdco Ltd. filed applications for both DEMOCRAT and REPUBLICAN; there were no competing applications. Google and Uniregistry Corp were the only applicants for LOL, and Google and Microsoft the only applicants for DOCS. Travelers filed applications for TRAVELERS, TRAVELERSINSURANCE, and REDUMBRELLA. The Gap filed an application for PIPERLIME. (How had I never heard of that?)  One company filed applications for ALLFINANZBERATER and ALLFINANZBERATUNG. Really?
What the first reports missed were the 307 applications filed by Donuts, Inc.  This is understandable as each application was filed in the name of a separate holding company, but it is quickly apparent that there is some connection because of the shared contact person, Daniel Schindler.
A simple Google® search of that name and “TLD” discloses Donuts, Inc. as the source of the numerous applications, and identifies Donuts, Inc. as a start-up that raised over $100 million from venture capital firms and private equity institutional investors (reported to have access to billions) for the purpose of acquiring and operating numerous gTLDs. With over $56 million invested on the applications alone ($185,000 filing fee per application), Donuts, Inc. will be looking at further significant costs in completing the review process, which will involve at least some competition with others filing for some of the same gTLDs (e.g.,  APP, BLOG, BOOK, CARS, etc.), as well as fending off challenges under prescribed opposition procedures.
Since an applicant is evaluated on its financial and technical capability to operate a registry, and is expected to be in operation within a year after final approval, Donuts has to have spent some serious cash developing a plan for each application, and must be committed to spending further funds to pursue the registrations, negotiate conflicts, defend oppositions, and implement a registry for each application that is ultimately approved. I sure would like to see the business plan that shows when Donuts, Inc. first expects to make a profit.

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