Atlantic Cities

The New Economy of City-Based Top Level Internet Domains

The New Economy of City-Based Top Level Internet Domains
Henry Grabar/PhotographerGlen/Flickr

Craving a slice in Istanbul? Check out www.pizza.istanbul. Need a taxi in Tokyo? Try www.taxi.tokyo.

Those URLs don't lead anywhere at the moment, but in a matter of months, they will. The geography of the Internet is on the verge of a historic growth spurt, and cities will be presiding over some of its largest new territories. Dozens of municipal governments, from Durban to Taipei, have claimed corresponding top level domains (TLDs) -- even the wordy ones like .amsterdam and .helsinki -- in the hopes that a domain will soon become as important to the global city brand in 2020 as a website was in 2000. 

Essentially, each of these cities has a chance to design its own microcosm of the Internet, a miniature network perfectly tailored for city residents, businesses, and services.

For years, the world of Internet addresses has been restricted to two-dozen top level domains (the familiar .com, .org, et al.) and a couple hundred national domains (.ly for Libya, .me for Montenegro). But starting this summer, those stalwarts could be joined by over a thousand new members.

In addition to urban and regional TLDs, the Internet Corporation for Assigned Names and Numbers (ICANN) is likely to distribute hundreds of corporate names, like .aig and .bbc. Common nouns like .city and .song are also up for grabs. Brazil and Peru are currently battling Amazon (the company) for the rights to .amazon. Elsewhere, companies are playing defense, securing domain names for their own products to avoid costly battles down the road.

"There's big money on the table," says Thies Lindenthal, a researcher at MIT's Center for Real Estate who studies domain speculation. "Nobody really knows whether it's going to pay off."

All in all, ICANN received nearly 2,000 applications during a three-month registration period last winter for 1,700 new TLDs, each filed at a cost of $185,000, for a total sum of over $350,000,000. When the approved TLDs go live, likely beginning this summer, it will be the biggest expansion of the Internet's address architecture since the creation of the initial domain system decades ago. Not everyone is pleased. Some critics have accused ICANN of sponsoring a gigantic land grab that could forever tilt the future of commerce toward companies like Google, Apple, and Amazon as they increase their control over certain corners of the web, like .book, for which Amazon is competing with eight other applicants.

But in the dozens of cities that applied for their own domains, the thinking goes, custom TLDs could do the opposite: help local businesses gain a secure footing on the web, with a boost from an urban brand. "It will really help small businesses promote and identify themselves right away," says Marybeth Ihle, the press secretary for the New York City Mayor's Office of Media and Entertainment. A top level domain — .nyc  — has been part of the city's digital road map since 2009, when ICANN first announced the expansion. "We really see it as part of NYC leading the way," Ihle says.

Photo illustration by Henry Grabar, based on London Attractions Guide/Flickr.

"It’s very, very good for small businesses," says Anthony Van Couvering, the CEO of Top Level Domain Holdings, which is managing bids for Budapest, Rome, and Miami. "If you are, for instance, at plumbing.com, that’s a great name. But it doesn’t lead to people calling you up to fix your pipes. Whereas plumbing.miami, you’re pretty sure that’s the local guy."

Obviously, this will lead to a host of contested addresses, just as the .com land rush did before it. Who will get plumbing.miami? Or rayspizza.nyc? The process, like the qualification requirements, will vary from city to city.

For businesses looking to find a web address, any additional real estate would be an improvement. Even as users increasingly navigate the Internet through search engines and links, cities could inject some much-needed supply into a pricey domain market. 

Researching city-based URLs, Lindenthal found that in Boston and Memphis, businesses and organizations initially leaned toward websites that featured the city's name + one keyword. But in both cities, that trend was later surpassed by registrants taking names with the city + two keywords, indicating a growing shortage of concise domain names. The largest U.S. cities, he says, already have their names appear in tens of thousands of URLs.

But Lindenthal is not quite bullish on the prospects for new city domains. "It's still a big gamble," he says. "People are very used to dotcoms." Many businesses aren't even aware of new TLDs coming their way, city-sponsored or otherwise [PDF]. And despite both real demand for Internet real estate and cybersquatters occupying potential addresses, previous efforts at expanding TLDs have been hit-or-miss. Few businesses jumped on board with .biz or .pro, for example. Unfamiliar domain names can make visitors suspicious.

Even so, investors believe the 60 or so new geographic domains could succeed where .coop, .mobi and others have failed, their authority reinforced by physical proximity and a common interest. If cities are serious about promoting their own domains -- and they ought to be, since many of them stand to make a profit from address sales -- these URLs could become familiar, trustworthy, and eventually, a quintessential part of a local business brand. Cities could lead by example, transferring government agencies onto new domains, giving .madrid or .hamburg an aura of legitimacy that companies and organizations would be eager to tap into.

By that same token, if geographic TLDs figure prominently into search rankings, it will spur more businesses to join, and thereby further improve a TLD's search engine power. Anytime you search for something with a geographic qualifier -- Tokyo newspaper, for example -- the Tokyo domain would move higher in the ranks. "It's a virtuous cycle," says Van Couvering.

Most importantly, there's potential for real innovation. Control over a top level domain will give city governments a chance to reserve easily accessible addresses for key departments and civic organizations, rather than relegating them to obscurity with successions of backslashes and links. Community boards and business improvement districts could find themselves in places of renewed importance. And cities could go further still: pages like news.dubai or traffic.sydney could be designated for particular uses, and then auctioned off. With some imagination, it's a chance for cities to start fresh and dictate the design of a new Internet.

How likely is it that all this will catch on? At United Domains, a third-party registration site that tracks informal interest in new domains, NYC, Berlin and London are in the top 15 for all new TLDs, alongside .shop, .music and other generic options. And yet, most Americans may wind up being unfamiliar with the phenomenon: only four of the five-dozen cities that have applied for TLDs are in the United States: New York, Boston, Las Vegas and Miami. (One that might have participated -- Los Angeles -- may have been thwarted by the existence of the national domain .la, which belongs to Laos.)

Photo illustration by Henry Grabar, based on Gregory Moine/Flickr.

Reluctance in the U.S. is not for lack of awareness. "We knocked on every door," says Van Couvering. "We talked to everyone. States as well." The concept, he says, often fell on deaf ears. Many cities don't have departments designed for this sort of undertaking, and Americans tend to be less familiar with multiple domains than their European counterparts.

In European capitals, where national Internet domains like .es, .fr, and .de cross paths on a regular basis, mingling with the ubiquitous .com, officials have been more interested. London, Paris, Barcelona, Madrid, Brussels, Amsterdam, Berlin, Hamburg, Helsinki, Budapest and Rome have all applied for their own TLDs.

How much each of these TLDs will have in common remains to be seen. There are dozens of different companies handling bids, and there's no precedent for how to run a municipal top level domain. City officials and domain company representatives I spoke with say the particulars of the process are still very much up in the air. 

Boston will be one to watch. Rather than an Internet real estate company like Neustarr or Top Level Domain Holding, Boston's bid is being handled by the Boston Globe, with technical help from Open Registry.

If municipal TLDs work as well as their investors believe, the Globe will have put itself at the center of a powerful and lucrative 21st-century municipal information network. It's a potentially shrewd move by the paper, but an equally interesting decision by the City of Boston to support its largest newspaper's bid to manage the municipal top level domain -- the paper may have found a new component of its business model, but the city is helping it along.

Top image: Photo illustration by Henry Grabar, based on PhotographerGlen/Flickr.

Henry Grabar is a freelance writer and a former fellow at The Atlantic Cities. He lives in New York. All posts »

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