New twist in top-level domain name game

A Pasadena, Calif., start-up called New.net, funded by Gross's closely held company idealab!, this week plans to begin selling Internet domain names based on 20 new extensions that function like the familiar ".com" and ".net." New.net's proposed extensions include ".family," ".tech," ".sport" and ".xxx," and the start-up plans to charge $25 for each name that uses one of the extensions. The plan is the latest attempt to break a logjam in expanding Web addresses for use by individuals, companies and other organizations. The Internet Corp. for Assigned Names and Numbers, an international nonprofit group established at the urging of the U.S. government, has been overseeing an effort to release new domain extensions since 1998 but hasn't yet done so. Factors behind the delay include fears that speculators would grab names linked to commercial trademarks and difficulties in negotiating contracts with companies picked to register new names.

ICANN, as the group is known, manages a network of directory servers that link domain names to the numerical addresses of computers connected to the Internet. New.net plans to set up a network of separate servers to manage its new extensions.

That isn't a new concept. Other companies already are selling domain names outside the ICANN structure, but they aren't making much headway. One reason is that they require users to change special settings on their Web-browser programs.

New.net has a different strategy, which relies partly on persuading major Internet service providers to use software that automatically routes users to the new Web addresses. Dave Hernand, the company's chief executive officer, said it has so far reached agreements with EarthLink Inc., Atlanta, Excite@Home Corp., Redwood City, Calif., and NetZero Inc., a Westlake Village, Calif., free Internet service that Gross helped found.

Those deals would make the new addresses reachable by about 16 million computer users in coming weeks, New.net estimates. Alternatively, consumers can download plug-in software for their Web browsers to reach the new addresses.

"We think we can get to a tipping point where millions and millions of users rush to use it," Gross says.

Why buy now?
But the plan still faces a chicken-and-egg question. How many people want to buy a name that, for the moment at least, can only be reached by a fraction of all Internet users?

A. Michael Froomkin, a University of Miami law professor who specializes in Internet governance issues, said consumers would be better served with new ICANN-sanctioned names accessible to all. But delays in releasing the new names have paved the way for commercial efforts such as that of New.net.

"This is not a real attractive idea on its own technical merit," Froomkin says. "But given where we are, what else can you do?"

Gross, whose idealab in Pasadena is an incubator for Internet ventures, is known for having made and lost a paper fortune as start-ups he has backed soared and then sank. He also is known for springing controversial ideas, including an abandoned effort to give away personal computers to users who agreed to watch targeted advertising.

Gross thinks New.net could be even more controversial, since it could weaken ICANN's influence over the Internet naming system. The 20 extensions New.net proposes don't conflict with any proposed by ICANN, but it could foreclose names the organization might want to launch in the future. At least one of New.net's proposed extensions, ".xxx," already is being privately sold outside the ICANN structure.

ICANN is slated to have one of its regular meetings this week in Melbourne, Australia. Michael Roberts, the organization's president, said it wasn't likely to comment until New.net's plans can be studied. "There are a lot of entrepreneurial spirits out there and that is good for the Internet, and there is also need for it to have a coherent technical architecture," he said.

Hernand said ICANN could, in theory, raise obstacles to New.net, but some doubt it has authority to do so. "ICANN cannot and should not and has no power to shut them down," said Esther Dyson, a former ICANN chairman who has been briefed on New.net.

New.net's plans, some of which were reported in a recent Fortune magazine profile of Gross, are based on technology the company hopes to patent. Other alternative-name services route requests for all Internet addresses through servers they operate, Hernand said. That works for finding the new names that they issue, but isn't as reliable for conventional addresses as the ICANN-managed global domain system, known as DNS.

Hernand said New.net's technology piggybacks on the DNS infrastructure: It uses a command executed by software downloaded by users or provided by ISPs. When a user types in a Web page address with a New.net name, the software automatically adds the extension "new.net" onto the address. As a result, those requests are routed by DNS servers to New.net's own directory servers, run by closely held UltraDNS Corp., San Mateo, Calif. Requests for conventional Web addresses are handled by the customary DNS process.

New.net's other proposed extensions include ".shop," ".free," ".chat," ".inc," ".kids," ".video" and ".travel." The company said MP3.com Inc., the San Diego digital-music service, will be the exclusive reseller of names using the extension ".mp3," which could be used by musical artists.