The Demise of Dot-Com

Internet World
August 1, 1999
(Cover story)

EVERYONE KNOWS ADDING “.com” makes any randomly chosen word just scream “Internet.” Everyone knows the “dot com” sector is the stock marker’s hottest. Network Solutions Inc., which through a U.S. government contract has had sole responsibility for registering .com domain names, now bills itself as “the dot com people.” And Sun Microsystems proclaims, “We put the dot in dot com,” whatever that means. It’s the most ubiquitous suffix of the 1990s.

But before you sink the first $50 million from your IPO into promoting your shiny new “.com” brand, you should be aware that “.com” is doomed. So it would be a good idea if your brand–like Amazon or eBay, CDnow or Fogdog Sports–could stand alone without its .com. You’ll be glad someday.

Granted, a lot of folks have bet the farm on .com, like the recently rechristened (nee The Mining Company), which will spend about $40 million this year on marketing its new brand, according to analysts’ estimates. Or, which is now engaged in a multimillion-dollar offline promotional campaign. “I love .com, and I think the whole industry has a lot invested here,” says CEO Marleen McDaniel, who expects that having .com in one’s corporate identity will eventually signal “Internet veteran.”

And without their .coms, neither “About” nor “Women” is a particularly stirring brand name–or even a defensible trademark, since they’re too generic and descriptive to qualify.

So why is .com doomed? Because with 5 million registered, most of the good names are taken–by legitimate users, by large corporations stockpiling them just in case, or by speculators. True, the root server system shows no signs of collapsing from .com fatigue, and mathematically there are plenty of names left, but who wants Especially if what you need is more like “” (already registered and being used for a non-commercial family site).

New ventures commonly choose their names based on whether a given .com domain name is available, which at this point is almost as constricting as trying to find a phone number that spells out a name, such as 1-800-FLOWERS. Geographica, a travel bookstore, had to rename itself Longitude Books after finding that the domain name space for its original moniker was already occupied, and even at that, it had to settle for because is in the hands of a speculator, says proprietor Daniel Kaizer.

The .com designation was never intended to absorb every single possible business in the world.  If anyone had foreseen that .com would someday dwarf all other top-level domains, it might have been subdivided to begin with, but who knew?

“Dot com was a garbage can,” because commercial entities weren’t generally allowed on the Net when TLDs were first introduced in the 1980s, says Sally Abel, a partner with the Palo Alto law firm Fenwick and West. “When Network Solutions took over registration, it was not the cash cow it later became.” Network Solutions now registers 10,000 new .com domains a day at $70 apiece.

It will take years for the legal system to catch up with the meteoric rise of the commercial Internet. One unfortunate side effect is that domain names have become inappropriately but indissolubly linked with trademarks.

“Trademark law and statutes were intended to avoid confusing the public, not to give a monopoly on the use of a word,” says trademark attorney Gerry Davis, of the Monterey, Calif., firm Davis & Schroeder, who has defended several domain name holders against suits from companies claiming trademarks in those names. “Trademark law does not guarantee you a domain name.”

One of Davis’ most high-profile cases is awaiting an appeals court decision within the next few months. Labelmaker Avery Dennison sued to force an e-mail provider to give up and, which it was planning to use as part of a service to offer people the opportunity to have e-mail addresses based on their own surnames. Avery Dennison had already registered,,, and several other permutations, but wanted them all, lest they wind up in the hands of a competitor that would use them to post unkind things about Avery Dennison. The initial decision went against the defendant, which was ordered to give the names up.

“Everyone agrees that the Domain Name System has outlived its usefulness,” says trademark attorney David Maher of Chicago’s Son-nenschein Nath & Rosenthal, who was one of the first to get sucked into domain name trademark issues. In 1994, on behalf of client McDonald’s Corp., he had to pry away from Wired Magazine prankster Joshua Quittner, who had registered it to demonstrate the ease of what’s now called cybersquatting. “It was all very gentlemanly,” Maher says.

Not anymore. Squabbles are epidemic. Dozens of domain-name-related complaints are making their way through U.S. courts as companies in different businesses, using the same legitimately trademarked name, duke it out over which gets <disputedname>com. Large companies routinely strong-arm smaller ones to give up any domain with peripheral relationships to their businesses, whether they’ve trademarked a particular term or not. For example, Ameritech is battling a Milwaukee ISP over, which isn’t one of its trademarks but contains the word “bell.” While Ameritech has several trademarks that also contain the word “bell,” it isn’t currently using any of them, according to the ISP’s counter-complaint. But its pay phones and telephone directories still sport pictures of bells.

There are basically two options for opening things up: Add top-level domains so that more than one company has a shot at <disputedname>.<whatever>, or abandon domain names altogether as a human mnemonic tool and turn to some kind of universal keyword directory.  Either way, .com loses its ubiquity and eventually becomes a relic.

The trouble is that to actually dissolve the gridlock and end the disputes, both approaches require a resource that seems downright quaint these days: human intervention.

Option No. 1 may see some action soon. A proposal to add seven generic top-level domains (gTLDs) has been floating around since February 1997, a product of the now defunct Internet Ad Hoc Committee, which was charged with creating a plan to bring the Internet out of U.S. government control and completely into the private sector. As that movement is picking up steam, with the contentious creation of the Internet Corporation for Assigned Names and Numbers last year, so is possible action on the IAHC’s proposal.

The Domain Name Supporting Organization, one of the components of ICANN, has now mustered the 30-odd-member Working Group C, whose job is to produce a proposal for adding gTLDs. The first draft is due August 9, with a final recommendation in mid-October. Keep your eye on for developments and a chance to add your two cents during the public comment periods.

But any expansion of the number of TLDs will be an exercise in futility unless the following occurs:

1. The distinctions among them are clear enough to maintain the current level of “guessability.”

2. Trademark holders can be dissuaded from registering their marks across all of the new TLDs, gobbling up the new name space and creating new sources of strife.

In addition to its “Hey, we’re on the Internet!” panache, .com’s current charm stems from its inevitability. The “www” in front and the “com” behind are givens, leaving only the stuff in between the dots to burn into peoples’ memories.

The only way to preserve that quality is to create TLDs whose functions are so clear and obvious that they’re easy to remember and no one needs to wonder which one goes with what type of enterprise.

Unfortunately, the seven originally proposed by the IAHC– firm (for businesses), .web (for Web-related enterprises), .shop (commerce), .rec (recreation and entertainment), .arts (the arts), .nom (individuals), and .info (for “information services”)–just won’t do the job. Do you find the schedule for your local art cinema under “www.bijou.rec” or “www.bijou.arts”? If people don’t find your Web store under, will they think to look in kittyboutique.firm? How much time are people willing to spend figuring these things out?

And who’s going to police the new TLDs to make sure they’re properly used? Even if their definitions start out mutually exclusive, the free market won’t preserve those distinctions if there’s money to be made in muddling them.

Under the original specification created by the Internet Engineering Task Force, the TLDs .net and .org could be more or less depended upon to belong to network providers and not-for-profit organizations, respectively. Network Solutions, their former guardian, elected to stop any semblance of policing .net and .org in 1996 as the demand for domain names spiraled out of control and a charge was instituted for registrations. Nowadays, they’re completely interchangeable with .com, and Network Solutions’ registration process actively encourages domain name seekers to register the same name across all three if they’re available, potentially tripling its revenue.

“Today there is no official or quasi-official flavor to .com, .net, or .org,” says Network Solutions’ new CEO, James Rutt. “Customers are free to build their brands around any of them.” As a result, (which one might think would lead to a surgical professional organization such as the American College of Surgeons) belongs to the same outfit as, and both point to a commercial referral service. However useful it would be to have a reliable net.distinction between legitimate not-for-profits and random scam artists, it’s not going to happen.

Maintaining the distinctions among new TLDs would go far toward alleviating the trademark problem, since, for example, Avery Dennison would be hard pressed to accuse a user of avery.nom, a domain reserved for individuals, of using one of its names in any commercially confusing way.

Vetting applicants for domain name registrations is far from impossible; Network Solutions does just that for institutions requesting registrations in .edu, which is still officially reserved for four-year colleges and universities. A staff of three processes 1,500 applications a month, of which only about 150 are eventually approved.

But doing the same thing for a domain with 100,000 applications a month would take a staff of 200–maybe more, since it’s hard to fake being a university, and those applications are relatively easy to check. It would be much harder to determine (before the fact, anyway) whether fineladies.arts was a genuine arts organization or a pornographer, so screeners would need to devote more time to each application and make many more tricky judgment calls. Registration fees would have to be astronomical to cover the cost, making the new domains less than appealing.

A profusion of very narrow TLDs–.med, .law, .cpa, .realty, .sport, ad infinitum–might make the vetting process more practical. There’s no magic in the number seven; many say the Domain Name System, which already handles upwards of 200 different TLDs because each country has its own, could absorb many more.

“If I had my druthers, I’d add 400 new TLDs and let people register what they want,” says Andrew McLaughlin, senior advisor to ICANN and a fellow at the Berkman Center for Internet and Society at Harvard Law School. “The thing no one has figured out is how to allocate them, and how to keep speculators from coming in and snapping up names.”

And not only speculators, but trademark holders themselves. Sonnenschein Nath’s Maher notes that about 100 of the country-specific domains have opened their registries to foreigners, and many companies are registering their trademarks in all of them.

Cathy Frankel, a trademark attorney with the New York firm Moses & Singer, says more TLDs will only increase confusion. “As a practical matter, the trademark owner will try to grab them all up.”

The World Intellectual Property Organization, which creates international treaties for such things as copyrights and trademarks, has suggested that any expansion of gTLDs be accompanied by a clear dispute resolution process and measures to prevent cybersquatting. But those would kick in only after deep-pocketed trademark holders have nailed down every name in sight.

“The corporate bar advises companies that if they don’t do this, they’ll lose their trademarks,” says Davis of Davis & Schroeder. He claims one simple addition to the trademark statute, specifying that failure to register a domain name doesn’t constitute failure to police a trademark, would cut away much of the litigation and dramatically reduce the temptation to stockpile names.

While the Net community fiddles with domain name expansion, the second option–a domain-name-free method of finding things–is gaining ground in the private sector through such mechanisms as Netscape’s Smart Browsing feature and Centraal Corp.’s RealNames. But both require much human intervention to be effective, and could potentially make the Net overly dependent on one company’s system.

Smart Browsing deduces what surfers are looking for when they type a word or group of words into the “location” bar of Netscape, and sends them to the relevant .com address, to the .org address if that’s a more commonly sought site, or to a list of sites that might fill the bill. Product manager Ken Hickman says the Smart Browsing directory has been built by hand, and is filled with the staff’s best guesses and judgment calls. “We often annoy trademark holders and people squatting on generic terms,” he says. A search on “baby clothes,” for example, will yield a list of sites that sell or give information about baby clothing, rather than sending the searcher directly to

RealNames, which works in conjunction with several major search engines to produce the first results on any search that includes one of its names, has a staff of 30 screening applications and awarding RealNames, at $100 a year each, based on existing trademarks.

When you register a name through Centraal, it will turn up first whenever someone does a search on AltaVista that includes that name. The same thing will happen within a few months on Go Network, Looksmart, Hotbot, and MSN; and Centraal signed an agreement in late June to be incorporated into Microsoft’s Internet Explorer browser.

The company doesn’t allow the registration of generic terms, and is putting together an outside board to arbitrate any disputes it can’t settle internally. Members include former FTC Commissioner Christine Varney and Lori Fena, current chairman of the Electronic Frontier Foundation’s board of directors.

Centraal CEO Keith Teare says RealNames can’t replace domain names, but they can remove much of the pressure to reserve domains for each individual brand. The company would still be identified by a corporate domain name; RealNames would lead the searcher to specific products.

A third alternative, Netword, is more of an ad hoc solution. It lets anyone create a word or phrase to describe any Web page, and through a plug-in allows the Networds to be used with any Web browser. Netword CEO Shep Bostin co-authored a recent Internet Draft on “Human-Friendly Naming” that is being reviewed by the IETF. Bostin believes the current disarray in .com, and the proposed expansion, will be a boon to Netword. “The more confusing Internet addresses are, the better for us.”