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DOMAINS ARE BIG BUSINESS FOR BUSINESSES

Posted on September 11, 2001

      A typical large business owns between 200 and 500 domain names and spends close to $100,000 per year registering, maintaining and defending them, according to Gartner, Inc. (www.gartner.com).

      Seven additional domains will be put into use within the next 12 months, with the .biz and .info domains scheduled to go live in early October. According to Gartner, businesses must protect their corporate identities and product lines through strict domain name management.

      "Managing domain names is becoming absolutely critical," said Ted Chamberlin, analyst for Gartner. "Businesses that do not have a strong domain management strategy risk losing precious enterprise mind share and may ultimately pay large legal fees defending itself against sabotage to its brand and corporate identities."

      Through 2006 and beyond, it will be 1,000 to 100,000 times more costly to recover a domain name from hostile ground than simple and proactive domain name management and registration.

      Gartner analysts said enterprises must implement a strategy that assigns domain names with importance corresponding to the enterprise's overall needs. Gartner suggests that domain names be assigned three different priorities: critical, important and secondary.

      Critical names are domains that are essential to the brand identity and awareness of the company or a specific product line. Companies will devote 65 percent of their money, time and effort in registering, maintaining and defending these names.

      Important names are domains that entail some time-to-marketing efforts or brand awareness, but are not essentially critical. An example would be if Coke or Pepsi designated a name such as "www.dietcola.com." A company may consider this important since the generic term is identified with its specific product, but at the same time, if a competitor registered the name, it would not negatively impact the other company. Companies should devote 20 percent of their money, time and effort in registering, maintaining and defending these names.

      Secondary names are domains that enterprises typically should not proactively register, but should be vigilant about the abuse or misuse of such domains and their potential to damage brand awareness of public perception of the company or brand. Examples include "yahooo.com" or "www.microsoff.com." These domain name variations are typically registered by parties that intend to divert Internet traffic away from a legitimate site, confuse the Web surfer or inflict harm on the targeted Web site. Companies should spend 15 percent of their time, effort and money in defending its names against such domain name variations, and the defense should consist of monitoring, recovery and arbitration.

      "The consequences of inaction can result in the brick-and-mortar equivalent of storefront destruction, or at least graffiti. Either way it will cost companies money. They shouldn't let others ransom or destroy their storefronts," Chamberlin said.

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