Why Are Brands Abandoning Their gTLD Applications?

There have been a number of brands withdrawing their applications for new generic Top Level Domains in recent weeks and months, and why is perplexing. To have gone to all the effort of applying, and then withdrawing, to some, makes no sense.

Some of those withdrawing, notes Jennifer Wolfe in an article on the Marketing Daily website, are Hasbro's Transformers, Hilton, GM's suite of gTLDs and Heinz.

Wolfe, who runs a gTLD digital brand strategy advisory firm, writes there are "two likely reasons -- companies are having difficulty responding to ICANN's clarifying questions that were designed more for an open registry than for brands, or they are balking at the costs associated with applying for and migrating to a gTLD environment."

"In the grand scheme of business, both of these reasons are shortsighted, as companies with gTLDs will have significant brand differentiation and innovation opportunities as compared to those who have not applied."

Wolfe then goes on to write that "For most brands, their gTLD strategy simply involves a migration of their .com business model into a top-level domain environment. While this could certainly evolve as new ways of using gTLDs are revealed, the basic model is pretty straightforward. In addition, costs are projected to be the same as operating a .com, plus the specific registry functions of a gTLD, and revenue should not be expected to change at the get-go."

"The other primary reason that brands may be dropping off is that they question the value of continuing the application process and see the cost of operating the gTLD as much higher than with .com. While there is certainly a higher cost involved, I would challenge brands to consider whether the cost savings from dropping out is worth more than the value of moving forward. The answer for any large company is 'no.'"

Wolfe then breaks down the reasons down, and says these are costs, although for a large company the costs would only amount to a "rounding error."

And also that "if gTLDs do change the way everyone uses the Internet, then this is a cheap investment for owning critical Internet real estate and being one step ahead of competitors. And if gTLDs do transform the digital world and you abandon, then you are likely to go through this process again in the next round -- not to mention wasting the investment thus far."