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New Investment Opportunity? Nations Around the World May Soon Be Offering Domain Names Written Entirely in Their Own Local Language 

As you have probably heard by now, ICANN launched a Fast Track Process this week (it began Monday, November 16th) that for the first time will open the door for nations and territories around the world to offer their citizens domain names using their native alphabets/scripts rather than the Latin characters used in the English language. 

To do this, ICANN has opened the IDN (International Domain Name) ccTLD Fast Track Process to allow for countries that use non-Latin based languages to also request top-level domains that reflect their country's name in local scripts. ICANN said the approval of internationalized domain names followed years of intense technical testing, policy development and global co-operation.

Tina Dam, ICANN's senior director for IDNs, said, "Our work on IDNs has gone through numerous drafts, dozens of tests, and an incredible amount of development by volunteers since we started this project." ICANN's president and CEO Rod Beckstrom added, "This is only the first step, but it is an incredibly big one and an historic move toward the internationalization of the Internet."

People in the IDN investment community have long believed that making it possible for people around the world to acquire domain names based on their own languages will open up some major new financial opportunities in the domain market. 

To get some insight into the possibilities we hooked up with two veteran IDN domain investors, Gary Males and Aaron Krawitz to get their take on ICANN's move. Males and Krawitz started IDNNewsletter.com, which 

Tina Dam 
ICANN Senior Director for IDNs

they say is the only platform exclusively devoted to the resale of IDNs. They also run IDNTools.com and two leading IDN industry blogs, IDNBlog.com and IDNDemystified. Males kicked off the conversation. 

Gary Males: Unless youíve been living under a rock lately, itís been hard to avoid all the noise ICANN has been making about November 16th. Peter Dengate Thrush (ICANN board Chariman) described it as follows: "This is the biggest change technically to the Internet since it was invented 40 years ago." So whatís all the hoo-hah about, and how will it effect me?  If itís such a momentous milestone in the lifetime of the internet, what should I be doing? 

Before we get into the implications of November 16th, let's cover some basics. An IDN is a domain name that contains at least one character not found on a traditional English A-Z keyboard. It could be for example an accented French character, or maybe characters that look nothing like the English alphabet, for example Japanese or Chinese characters. 

Question: Is there a demand for IDNs?

Gary Males: ICANN certainly thinks so, and all their research backs this up. Itís hard for us to imagine having to navigate through the internet with English only domains, but had the internet been invented in China , and we all had to navigate using Chinese characters only, we would probably understand the inconvenience. 

Question: What is the biggest misconception about IDNs?

Gary Males: The biggest myth I see quoted is that domainers ďdonít like or donít know IDNs, because they prefer dot com domainsĒ The thing is, we all know dot com is king, and IDN domainers know this too Ė but the thing is IDNs are dot com too! An example would be イケア.com. This is Japanese for IKEA, and Ikea uses it today. 

Question: IDNs have been around for some time, but theyíve never really taken off have they? Some think itís just hype, do they not?

Gary Males: Yes, IDNs have been around since 2000, and approximately 1 million are registered today, but there was a heavy reliance on two organizations to enable them to work; Microsoft and ICANN. These two organizations as we know can move at a snail's pace, so yes itís been a long journey, and much of what you have seen and may have interpreted as hype was simply people trying to second-guess when these organizations will deliver on their promises.

Microsoftís IE7 was the last mainstream browser to enable IDNs in 2007, and ICANN is finally entering their final leg of a 9-year marathon

Question: So how would you describe what happened on November 16th?

Gary Males: November 16th was launch day for the IDN ccTLD fast track process. There are two parallel IDN activities running in ICANN, and both of them deal with internationalizing the extension (the part to the right of the dot). Although IDNs have been around for nearly 10 years, they have only been half of an IDN (the left of the dot). To complete the job, a full IDN is what is needed. 

 

 

 

 

 

 

 

Question: What is the ccTLD fast track process?

Gary Males: The ccTLD fast track process is a stand alone initiative to release new IDN country code extensions. This will mean inserting new country codes in the root. Itís called the fast-track process, simply because itís scope is narrow in that country governments can only apply for a country code relevant to their geography and therefore the process is void of much of the politics and red-tape that are often associated with gTLDs 

Question: Has there been much interest from country governments?

Gary Males: ICANN stated that 31 national governments representing 15 different languages expressed an interest in participation of the fast-track process.

ICANN has put IDNs 
on a "fast track"

Question:  So what happens next?

Aaron Krawitz: As of November 16th, ICANN is formally accepting IDN ccTLD applications, and upon approval it will be up to the ccTLD country manager to dictate timelines. Russia for example appears to be leading the rush with a very aggressive publicity campaign (publicly backed by President Dmitry Medvedev) and their timelines are aggressive too. 

Question: What is the likely release method, will it be a landrush?

Aaron Krawitz: Each country of course will have their own process. Russia is already accepting priority applications from their government bodies up until November 25th. Whatever the government bodies decide they need, will in effect form the 1st reserved list. The 2nd reserve list will be made up of the applications that run from November 25th to March 25th 2010, and will be a priority period for trademark holders and other federal and regional government organizations.

Domains not on the reserved lists will then be auctioned through a Dutch auction starting at 10 million Rubles (‾$300,000) with all proceeds going to charity.

Question: You mentioned there is an IDN gTLD process too?

Aaron Krawitz: Yes there is, although currently it is caught up in the red-tape of the wider intellectual property concerns along with the wider English gTLD process, although I personally think this wonít be the case for much longer. 

Question: Why do you say that?

Aaron Krawitz: The IDN gTLD process is extremely important as it provides for new IDN extensions at the top level free of government and political influence and also deals with enabling current gTLDs such as dot com to have internationalized versions.

A coalition by the name of Netchoice, whose  

members include many household names such as Ebay, Skype and Verisign have been very vocal on this point as they collectively want consumers to be able to navigate to full IDN versions of current dot com websites such as Youtube dot com. 

As things stand now, there is an unfair advantage being handed to ccTLDs in the fast track process. So I would guess that any further delays will force a creation of a new fast-track process, but this time for IDN gTLDs.  

Question: As a domain investor, where do you see the biggest opportunities?

Aaron Krawitz: IDN ccTLDs are at first glance very attractive, but the restrictive nature and extensive reserved lists will no doubt work against you and limit your opportunities, and of course you have the same problem all new extensions face and that is gaining the consumers attention, which could take a very long time (as we have seen with other gTLD launches) 

I think the most exciting space is in dot com, and I say that for a few reasons. Since 2000 there have been no restrictions, no reserved list; so today single alphabet letters, geographical terms are all out there unregistered or owned by someone.

Secondly, once the inevitable happens and we see IDN translated versions of dot com enter the root, then you hit the ground running to leverage the worldwide dot com brand. Then to avoid consumer confusion, there will have to be some sort of aliasing from an English dot com to 

ďanother languageĒ dot com. This aliasing was originally proposed in a Verisign white paper back in 2005, and it means that current IDN dot com holders would be granted rights to IDNs with a translated version of dot com. 

In summary, there are a lot of moving parts, but the last chapter in the IDN saga is finally being written and it will make many rich. 

Gary Males: We fully believe that many foreign internet users feel trapped by not being able to use their own language, and that is why we partnered to start IDNNewsletter.com. Within seconds of the first newsletter we sold вода.com ("Water" in Cyrillic), which is a good sign of things to come."

Aaron Krawitz: We also run IDNTools.com, and the leading IDN industry blogs, IDNBlog.com and IDNDemystified. We have always wished we could have been there in the 1990s to buy up .com's while they were undervalued and we believe that an equivalent opportunity exists today with IDNs.

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