Begging to Differ with Esther Dyson on gTLDs, Part 1

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ADOTAS – Esther Dyson — the Great Dame of Silicon Valley, at times matriarch to Bill Gates and many other lads on the innovative circuit — recently wrote a harsh column on ICANN’s gTLDs. I like and respect Esther, especially her technical background, and we have shared a podium, but as this topic deals with the centrality of global corporate nomenclature, it demands an authoritative analysis. I feel it’s my responsibility to clarify, and have taken the liberty to address her entire piece item by item.

Esther Dyson writes, “A name is just a sound or sequence of letters. It carries no value or meaning other than as a pointer to something in people’s minds – a concept, a person, a brand, or a particular thing or individual.”

A name carries all the value. Without a name identity a brand is no different than unlabelled goods stacked in warehouses and global commercial services dying and gasping without being identified. Imagine eBay, Gucci, Rolex or Google without a name; they would become penny stocks. It’s the power of the name, the perception of value that it creates belonging. Without a name identity, big or small you have nothing. Only the big branding mentality is logo-slogan centric and looks to a name as just as a pointer.

“In modern economies, people distinguish between generic words, which refer to concepts or a set of individual things (a certain kind of fruit, for example), and trademarks, which refer to specific goods or services around which someone has built value. By law, actual words can’t be trademarks, but specific arrangements of words – such as Evernote or Apple Computer – can be protected.”

The trademark law has explained a century ago that generic words cannot be trademarked. Naïve entrepreneurs so often use them, at great risk. Apple was dragged into courts over the conflict with the Beatles’ Apple Records and has also made the largest settlement of the period. Despite all the problems, it survived and acquired a worldwide “secondary meaning” where its common use is quickly associated with the computer and not the fruit. Orange, banana, apricot and many other fruity names enterprises repeatedly keep drowning and are often kept alive via rebranding life support.

Despite all this so called glory it is wrong to adopt a moniker over a commonly used generic name even though it may be trademarked under a specific ‘ware’ of classification. In a case when a generic main name attached with another word to describe its service, the secondary word attached to a name is hardly used and the naked usage of the first word only becomes awkward and eventually a big trademark liability. In modern economies, Watermelon Systems and Strawberry Securities are doomed from the start and only heavy advertising can keep them alive.

The Internet’s domain-name system (DNS) was formalized in the late 1990’s by the Internet Corporation for Assigned Names and Numbers (ICANN). I was ICANN’s founding chairman, and we more or less followed the rules of trademarks, with an overlay of ‘first come, first served.’ If you could show that you owned a trademark, you could get the “.com” domain for that name, unless someone else with a similar claim had gotten there first.”

Reflecting back, it was a disaster. There were no trademark rules followed. It was nothing but anarchy as on a first come, first serve basis while intellectual properties were looted in broad daylight. It grew to 1 million domain registrations per day and created worldwide cyber-squatting. The confusion brought a boom to reckless advertising and branding and trademark fights.

“The problem is that expanding the namespace [through gTLDs] – allowing anyone to register a new TLD such as .apple – doesn’t actually create any new value. The value is in people’s heads – in the meanings of the words and the brand associations – not in the expanded namespace. In fact, the new approach carves up the namespace: the value formerly associated with Apple could now be divided into Apple.computers, apple.phone, ipod.apple, and so on. If this sounds confusing, that is because it is.”

The value in the people’s head comes from access and usability of the name, which in turn adds to increased visibility. This visibility adds to increased value to the brand, as visible brands are chosen over obscure brands; gTLD creates new layers of usability.

The visibility that domain names brought to IBM and Xerox are as significant as what TV broadcasting did to name identity. Apple will have added usage with unlimited dot apple applications. It can control and allocate at wish creative digital sub-name branding services.

Back to the fruity example, which now seems to be attached to products thanks to its generic disposition. “Apple phone,” “apple ipod”, “apple computer” are common phrases because they are not distinct enough as Rolex that doesn’t need to be pointed out that it’s a watch. Pointers are signs of damaged names.

Global corporate nomenclature became complex with little room for overly creative easy access domain naming while over friendly generic use has made the branding sector enjoying $500 billion yearly the beneficiary. Weak names need constant oxygen to survive. It’s not the complexity; it’s the simplicity of the issue that’s missing.

“Handling the profusion of names and TLDs is a relatively simple problem for a computer, even though it will require extra work to redirect hundreds of new names (when someone types them in) back to the same old Web site. It will also create lots of work for lawyers, marketers of search-engine optimization, registries, and registrars. All of this will create jobs, but little extra value. To me, useless jobs are, well, useless. And, while redundant domain names are not evil, I do think that they are a waste of resources.”

Has the Internet been good to our society? Have 200 million domain names served our commerce well? With a billion plus more new online users being added, what’s useless is to think that extra work is unnecessary. “One Internet, one world thinking” demands global naming systems that will manage billions of domain names of sorts and types on a multilingual format for the global population. This is a formidable task that requires continuous expansion on all fronts. It’s not the question about useless work, it’s all about facing the future boldly and dealing with the exponential reality of 5 billion online users by 2020

“Imagine you own a patch of land and have made it valuable through careful farming practices – good seeds, irrigation, fertilizers, and bees to pollinate the crops. But now someone comes along and says, ‘We will divide your land into smaller parcels and charge you to protect each of them.’”

The agrarian style of cyber squatting originated and thrived under the cheap, no-questions-asked domain name. It provided over 10,000 UDRP cases for lawyers to sort out the disputes at many thousands of dollars each. From the standpoint of business costs, well-structured and protectable names win their cases with ease. Not loosely composed, generic names that flew out of the dictionary.

Coca-Cola is that farmer. It and other trademark holders are now implicitly being asked to register Coca-Cola in each new TLD – as well as to buy its own new TLDs. Otherwise, someone else may create and register those new TLDs. ICANN’s registrars are already offering services to do this for companies, at a cost of thousands of dollars for a portfolio of trademarks. That just strikes me as a protection racket.”

Famous brands like Coke routinely defend brand trespassing and win. The bigger question in the gTLD process (as complicated as getting a city to host the Olympics) is when brand names be trespassing if say dot Deloitte or dot Sony secured Coke.Deloitte, or Coke.Sony? Would they offer their domains general public like in current system to do what, raise enough money to cover their one hour of electricity bill? This common fear-mongering is purely based on old domain name mentality and a proof of lack of understanding among the marketers of the world.

The old system was designed easy and free access to steal others identity, this gTLD system is far too expensive and complicated for petty theft. It will not end the trademark protection problems, but for sure put a new sober face on it.

“The problem is not the shortage of space in the field of all possible names, but the subdivision of space in Coca-Cola’s cultivated namespace. The only shortage is a shortage of space in people’s heads.”

The only shortage in people’s heads come from poor recall-ability of generic and diluted names. Which United? Which National? Which First?

Weak and borderline brands are under threats for many reasons. Primarily, Western brands are facing the brands of emerging economies that are being bolstered through digital compression and portability; they clearly have the cyber branding edge.

The gTLD is not subdividing any cultivated name space; it will only provide tools to create more touch points to its customer. What exactly did the early domain name bring to our society? Fast-forward change, where unfit name identities broke down and collapsed along the way.

Javed continues his argument tomorrow — stay tuned!

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