Companies hoping to take advantage of the expansion of domain names by the Internet Corporation for Assigned Names and Numbers (ICANN) will have to watch out for domain squatters looking to spoil the party.
That's the warning from Melbourne IT (ASX:MLB) chief executive, Theo Hnarakis, who told Computerworld Australia that while the ICANN approval meant companies such as Canon could register a .canon site, it would also lead to "money changing hands" as cyber squatters worked to create a mirror website that looked like the real site used for phishing purposes.
Local online sports betting agency, Centrebet, found this out the hard way in 2009 when it attempted to expand into Greece ahead of the 2010 FIFA World Cup but found cyber squatting had occurred on both the centrebet.gr and centerbet.gr domains. The company, through its partner Melbourne IT, had to resort to using dispute resolution laws in Greece to get back the domain names in time for the World Cup.
"We will see a spike because of the sheer number of domain names and an organisation won't be able to register every one of its names; that's going to be really tough," Hnarakis said.
"The challenge for big companies will be to educate their customers that if it comes with a different extension that they don't know, than the only way they can trust it if it is, for example, .ford."
Companies would also need to monitor domain names and identify quickly if they had been victims of cyber squatting. He added that Melbourne IT, which offers domain name offerings to about 70 per cent of the ASX Top 100 companies, offered its customers services that could shut down this malicious activity.
However, it is not all doom and gloom on the domain front as. According to Hnarakis, there was an opportunity for not only enterprises but smaller businesses, cities and community groups to register a unique identity such as .sydney.
The ICANN application cost has been set at $US185,000 ($A175,380) while the new domains would also incur a $US25,000 annual licence fee to ICANN per domain registration.
While Hnarakis conceded that .domain would "not be for everyone" he said smaller companies could form a consortium to raise the capital.
"When you consider that some very popular names in the .com domain space sell for millions of dollars, this is a small investment for a brand holder who may well apply for as they see the Internet as a future part of their strategy," said Hnarakis
Companies that want to invest in a new domain name would need to be quick as applications open in January 2012 and close 90 days later. Once this window closes, companies would have to wait another three years to apply again.
According to Hnarakis, this was to avoid domain name overload and give consumers time to get used to typing in company names rather than .com.au.
"I think it will create enormous confusion to begin with because you are going to have potentially up to 1000 new [domain] names launched and so the average punter will wonder `what do I type in'?" he said.
"You're going to see in this first round of application round 500 to 1000 names applied for, and than when you consider there are only 300 extensions, 290 country codes and about 20 global names, that's a lot of names to get used to."
About 15 per cent of the 150 companies in Asia Pacific that are interested in registering a .domain come from Australia. Melbourne IT has about 200 expressions of interest from its customers but Hnarakis could not name who these were for.
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