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How the dot-CO Domain Opened the Door to a New Era of Internet Innovation

Taking on an industry titan is never easy. So it was with a small upstart domain extension hoping to challenge the dominance of dot-com. Its success has now become the role model for a new generation of extensions that will forever change the way we see and use the Internet...

From the moment the Internet entered popular culture, it has been synonymous with the three-letter ending of many addresses on the global network: dot-com.

Despite literally hundreds of other Internet endings, all of which do the same basic job of providing a tangible location on an intangible computer network, the dominance of dot-com means that even now there are seven times as many Internet addresses with the "com" ending than the next most popular (dot-de, the German Internet extension).

From 2013 onwards, the naming system for the global network of the Internet will start to reflect the diversity of its millions of users — and hence your customers.But those days are rapidly coming to a close through plans to create thousands of new extensions over the next 12 months. Starting later this year, Internet users will start to see all sorts of new names on the network. Whether it is the city where you live (dot-london, dot-paris, dot-nyc), your favourite retailer (dot-brands), even your favourite pastimes (dot-ski, dot-golf), there will soon be an Internet extension for it.

From 2013 onwards, the naming system for this global network will start to reflect the diversity of its millions of users — and hence your customers. If you want to sell your new green brand of products, you may find your target audience spends much more of its time on websites ending in dot-eco or dot-green. And your marketing team may try desperately to explain why you should rebrand an underperforming service on a new dot-earth web address.

As consumer behavior changes online, smart companies will follow — or even lead.

And lead is exactly what one company that has opened the door for these thousands of new extensions did.

.CO Internet is the company that manages the new dot-CO domain extension, which means it is able to define how, by whom, and for how much domain names ending in ".CO" are allocated. The ".CO" Internet extension is in fact assigned to the country of Colombia through an international country-naming standard (there are 255 other "ccTLDs" or country-code top-level domains on the Internet such as dot-cn for China, dot-uk for the United Kingdom and dot-de for Germany, as mentioned earlier).

Since many of these particular extensions are run or at least overseen by governments, they have been typically under-used (although there are a few notable exceptions). And that has left the "generic" top-level domains such as dot-com, dot-org, dot-info to dominate the Internet naming system.

The magic sauce that enabled .CO Internet to succeed is the company's culture of innovation. The first thing .CO Internet did was to ignore accepted wisdom about the Internet's naming infrastructure and decided it would make domains 'sexy'.The Colombian government back in 2006 realized that its dot-CO extension had the potential for global use due to it being used to mean "company", "corporation" and even "commerce" across the world. At the time there were only a few thousand dot-CO domains in total. And so the government put the extension out for tender and chose what it felt was the most go-getting and innovative company that applied to manage the domain.

In 2010, .CO Internet was awarded the rights to manage the .CO extension and just two years later, they have gone from a few thousand dot-CO domains to well over one million, with customers from over 200 countries.

What's more, dot-CO has found the support of global brands from IBM to Starbucks, from Google to Twitter. The most valuable domains — those with just a single letter, such as "g.co" — have reportedly been sold for seven figure sums. Amazon bought three: a.co for itself, z.co for Zappos, and k.co for Kindle.

What makes the success of the .CO domain all the more remarkable is that it came after ten years of failed attempts by a range of other companies to break open the market for web addresses. Although it remains dominated by the 800 pound dot-com gorilla, with over 100-million registrations under its belt, dot-CO is being used as a template for the hundreds of new extensions who collectively threaten to turn the market for web addresses on its head.

Making domain names sexy

There has been a limited expansion of the Internet's name space in the past. In 2000, seven new "generic" extensions were approved: aero, biz, coop, info, museum, name and pro. And in 2004, a further six were approved: asia, cat, jobs, mobi, tel and travel (and seven years later, xxx). It is telling that a decade later, the average consumer is unlikely to have even heard of them.

So, what was the magic sauce that enabled .CO Internet to succeed where others had tried and failed? The company is quite open about it: innovation.

The first thing .CO Internet did was to ignore accepted wisdom. Even now, many of those comfortable with the status quo claim that new extensions are "not needed". They include well-known Internet figures such as Tim Berners-Lee, inventor of the World Wide Web. According to this logic, the Internet's naming infrastructure is no more interesting than the phone system or the road network. It does a useful job providing a foundation for other activities. As a result, previous efforts at breaking dot-com domination have been suitably low-key.

From day one, .CO Internet decided that it didn't agree with this engineer-like perspective and decided it would make domains "sexy". Dot-CO domains would appeal to those likely to find excitement in having a particular space online: namely other innovators and creative thinkers.

In order to get this message out, the company ignored another piece of conventional wisdom: leave the marketing in the hands of web domain retailers, like GoDaddy and Network Solutions. The logic was that it is in the interests of these companies to sell more domains. Plus they have long years of experience in what works and what doesn't in the domain name market.

Except to these companies domains really are more of a utility — they sell as many as possible and make a small margin on each (some sell at or under wholesale price and make their profit from tying in a more profitable service like website hosting). To this day, domain retailers like selling dot-com domains because their systems are set up to deal with them, they provide a solid income, and, crucially, they have a very high renewal rate.

The renewal rate is one factor that has enabled dot-com to stay in control for so long: with domains typically around the $10 per domain per year mark, huge numbers are bought each year and then dropped when their registration period ends. Dot-com domains have a famously high renewal rate compared to other extensions, which makes the retailers happy as customers simply renew their business every year.

Those economics are at the point of breaking however. It is increasingly difficult for individuals and businesses world wide to actually find a dot-com web address that they want. Given the scarcity of names, a booming market in the resale of dot-coms now sees companies regularly paying tens to hundreds of thousands of dollars for the addresses they want. But with a flood of new, more highly focused extensions about to hit the market, this model has started looking increasingly stale. And expensive.

Market the hell out of it

.CO Internet decided long before it launched that it would work the system the other way around — by bringing modern marketing skills to a stagnant market and creating a demand for its domains.

It took out billboards in New York's Times Square and in San Francisco and started sponsoring events outside the small Internet infrastructure market, such as the hip South by Southwest (SXSW) festival in Austin, Texas. It ran a "Create Your Opportunity" campaign with a $50,000 prize for the company with the best business plan built around a dot-CO domain.

But at the same time as working outside the existing model, it also sought out ways to make it work differently for them. Fresh thinking led to probably the company's big coup — a Superbowl ad in 2011 in partnership with the world's biggest domain retailer, that specifically highlighted dot-CO domains.

GoDaddy has run ads during the biggest TV event of the year in the United States for a number of years, each time featuring scantily clad women in a variety of entirely unrelated activities. The ads are pointless, frivolous, hugely expensive and of course massively successful. But even with low-cut tops, the company had a hard time making the act of registering an address on the Internet sexy. What dot-CO provided was something new, and so something to sell.

The commercial reached 110 million viewers and registered dot-CO domains jumped several hundred thousand as a result. It was so successful that both companies repeated the experiment in 2012.

Getting to know — and love — your customers

The other innovation that .CO Internet brought to the market was the idea of identifying a specific community and building relationships with them around their domain names.

Dot-CO has the advantage of being immediately recognizable and suitably generic. And .CO Internet took a decision to focus on a community that reflected its own values of innovation: Internet entrepreneurs.Previous new Internet extensions had often had specific communities as a focus for its products but were restricted by their name's precision — such as dot-aero or dot-mobi. Some extensions were under strict rules only to sell to certain pre-identified groups — such as dot-pro and dot-jobs. More general domains, such as dot-info had never targeted a particular group and so seem doomed to act as an also-ran for dot-coms.

Dot-CO has the advantage of being immediately recognizable and suitably generic. And the company made a decision to focus on a community that reflected its own values of innovation: Internet entrepreneurs.

As a result, the .CO Internet team regularly visits hubs of Internet innovation to meet up with their customers, discussing ways in which they can help support and promote them. It's a win-win for both sides, and the company features many of those it has conversations with on its own "go.co" site, with its tagline: "Where big ideas belong on the web".

The company also reached out to thought leaders and leading organizations around the community — investors and startup groups. One of the first high profile dot-CO domains was Angel.co, run by Angel List, a hugely successful platform for connecting startups with investors around the world. Others groups included 500 Startups — who shifted their web presence from "500startups.com" to the shorter and instantly more recognizable "500.co". Well-known technology startup writer Om Malik moved his personal blog to "om.co".

Juan Diego Calle – CEO, .CO InternetThe result has been to spread awareness about .CO domain names within a community of frequent domain purchasers as well as to provide somewhat of a buzz around the idea that they are a little different. The hope from .CO Internet's perspective is that one of these Internet startups will go on to become the next Google or Twitter and with it, pull its domain into the spotlight.

Smart targeting

Even with mainstream marketing and community building, a significant challenge remained however: Main Street acceptance.

Before launching, .CO Internet took another innovative route within the industry: rather than taking a wait-and-see approach, it actively reached out and targeted big businesses to persuade them to register dot-CO domains.

An unexpected opportunity suddenly opened up when it realized companies had started looking for extremely short domains. This trend is epitomized by Twitter, which limits messages to 140 characters, so every character counts. It is no coincidence that Twitter wanted and won "t.co" — which is now one of the most used domains on the entire Internet (ranked 27th according to Alexa).

Other big names followed suit quickly. Google has "g.co" and uses it for official Google shortcuts to other areas of the Internet; Starbucks has sbux.co; Cisco uses cs.co. With these domains comes a new world of analytics and advertising opportunities that companies have only just started realizing.

But where now?

Of course, as with all businesses, the path of dot-CO was far from straight, nor without its mishaps and mistakes, but by keeping a focus on innovating in what had become a stagnant market, as well as recognizing that its own innovative culture is what marked the company out from its much larger competition, .CO Internet has turned into a successful business with a clear path to future growth.

Its approach is likely to be emulated by many of the companies that are now investing millions in their own extensions. Those companies are likely to aggressively target and market particular groups of people: the days of the catch-all dot-com are over.

"Within a few years, we may find that alongside age, income, interests and other indicators for identifying who your customers are, will be the Internet extensions they are most likely to associate themselves with."

What that means for everyone else is equally as striking. With more and more of all our lives moving online, it is going to be crucial for companies to find where people are gathering on the Internet.

Within just a few short years, we may find that alongside age, income, interests and the hundreds of other indicators for identifying who your customers are, will be the Internet extensions they are most likely to associate themselves with.

It's a brave new world. And the dot-CO model may prove to be the template for much of it.

Written for the European Business Review by Kieren McCarthy (CircleID), an acknowledged authority on the Internet and Internet governance. He has written extensively about both for a wide range of national and international newspapers and magazines. An engineer by training, he has spent more than 10 years as an IT journalist and has, at some point, interviewed just about everybody in the Internet industry. The official blogger for both the inaugural Internet Governance Forum and an OECD conference on the Participative Web, and author of the book Sex.com, he was also ICANN's General Manager of Public Participation, tasked with coordinating communication between the organization and Internet users. Kieren is CEO of .Nxt. Inc, and created both the company and the conference to provide a space for positive information-sharing about the future of the Internet's infrastructure.

About .CO Internet

.CO Internet

.CO Internet S.A.S. is the Registry Operator for the .CO top-level domain. Short, memorable and credible, .CO is the hot, new ending for web addresses all over the world. From start-ups and small businesses to big brands and multinational corporations, .CO is increasingly becoming the web address of choice for innovators and entrepreneurs across the globe. Please visit http://www.COinternet.co and http://www.go.co for more information. You can also follow us on Twitter @dotCO and at Facebook.com/dotCO. (Learn More)

Related topics: Registry Services, ICANN, Top-Level Domains

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