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Your Client Wants One of These Fancy New Domain Extensions. Here’s What to Tell Them.

Your Client Wants One of These Fancy New Domain Extensions. Here’s What to Tell Them.

New domain names like ".equipment" open up new, easier website URLs. Unfortunately, these new markets mean new liabilities for consultant and web marketing firms.

Tuesday, March 04, 2014/Categories: consultant-liability

In a recent post on Intuit.com, bloggers highlighted some of the benefits of new domain name classes created by ICANN (Internet Corporation for Assigned Names and Numbers).

A domain name class is what you see on the right side of a URL. In TechInsurance.com, the ".com" is the domain name class. Because there are so many websites using .com, that class is practically full. It's hard to get a good, simple .com domain name. Very few three-, four-, or five-letter options are available.

But ICANN has launched over a thousand new domain name class extensions called gTLDs. Rather than using the usual .com or .net, companies will suddenly have access to hundreds of options, including everything from .agency to .zone. And yes, .coffee.

If you're an IT consultant or web developer, your clients may want to take advantage of one of these new gTLDS. So let's look at this new market and examine any potential risks you could face.

Who Owns .Coffee?

Appropriately enough, .coffee is owned by a business called Donuts. We're not making that up. But to understand how .coffee and Donuts work together, you need to understand how these new domain name classes are created.

ICANN regulates domain names on the Internet. In 2011, it decided to accept applications for new domain name classes. Any business can apply to run a domain class. Google applied for over a hundred domain classes. Amazon applied for 76.

The application process takes about two years (which is why you are just now seeing the first new domains) and costs over $200,000 in application fees. Once a business owns the domain class, it can sell the rights to any other company that wants a webpage with its ending (e.g., .agency, .bike, etc.).

This brings us to .coffee. One of the biggest players in these new domain names is the company Donuts.co. It invested millions of dollars in applying for over 300 new gTLD endings. You can see its list of new domain names here.

If your client wants to launch a new website, they would have to buy a new, more specific domain name from a company like Donut.co. Indeed, your client could start a business with the website “hot.coffee.”

New Domain Names: Are They Worth It?

IT business consultants and web marketing firms might be wondering: if a new domain name really worthwhile? Well, maybe. Some marketing experts point out that having a simple, direct domain name will drive traffic to your website. But it's not that straightforward.

In the Verisign Domain Report, by Verisign, a company that bills itself as “the global leader in domain names,” researchers found that Internet users were skeptical of non-standard domain name endings. Users were more likely to trust a website with a .com or .net domain name rather than a gTLD domain name like .business or .equipment.

Of course, gTLDs only started in the last month. Undoubtedly, as they become more common, consumers will warm up to them.

gTLDs: a Marketing, Consulting, and Professional Liability Case Study

Making marketing or consulting decisions is difficult work. Let's say you recommend a client doesn't sign up for "www.computer.equipment" because you think the cost isn't worth it.

Five years down the road, if a startup company has hit it rich using the computer.equipment domain name, your client could sue you claiming your advice made them miss out on a huge opportunity.

Consultants and web marketing companies are liable for the advice they give. But they are also liable for missed opportunities and advice they should have given. Luckily for you, E&O Insurance covers these coulda-shoulda-woulda lawsuits. If a client sues you claiming you should have done more or missed a key business opportunity, E and O Insurance can cover your legal expenses.

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