When the Internet Corporation for Assigned Names and Numbers (“ICANN”) announced on June 19 that it would allow virtually any word or name to be registered as a top-level domain (“TLD”), many pundits predicted a digital gold rush. After all, why would a business want a www.ourproduct@xyzcorp.com Web site when it could instead have www.ourproducts.xyz? Moreover, wouldn’t it want to register “.xyz” as a TLD to prevent competitors or cyber squatters from doing so?

Many business are increasingly answering “no” to the above questions. Each applicant for a generic TLD must submit an application likely to take several hundred hours to complete, must pay a $185,000 evaluation fee, and can be required to pay a Registry Services Review Fee anticipated to cost an additional $50,000. If there are other applicants for the same or a substantially similar domain name, an applicant could become entangled in an expensive dispute resolution proceeding that could cost it both the TLD and most or all of the fees paid to ICANN. Moreover, winning the right to a new TLD has its own cost: successful applicants for the new TLDs will incur a minimum $25,000 annual fee to “operate” a registry for their TLDs, even if they do not use them. As a consequence, many well-known companies, including PepsiCo, Ikea, Wells Fargo, and Morgan Stanley, have chosen not to apply to register their names as TLDs.