Possessing a memorable domain name still is considered to be essential to any successful business, especially any successful online business. Just do the ‘billboard test’ anywhere the world: look at a billboard, or any other company advertising. Most likely you will see the company’s or the product’s domain name, either a .com, or a local top-level-domain like .in in India or .co.uk in the United Kingdom.
But in recent years, an interesting development has happened around the globe. Instead of promoting their domain name, companies advertise their Facebook or Twitter address, their IPhone application or even a search at a search engine like Google. Furthermore, those advertisings aren’t even limited to activities aiming at drawing new customers. Also existing web sites and existing communication is used to promote those new channels.
I’ve caught myself that I’ve been encouraging the very same behavior – why shouldn’t we, besides promoting our web site (the domain name sedo.com, which we bought for the handy sum of $80,000 in 2003), promote our twitter account (twitter.com/sedo) and our facebook page (facebook.com/sedo)? The answer is: Because of the long-term danger that looms on the horizon: namely the “Navigation Nightmare”.
So here’s the problem: While it’s smart – and very “web 2.0” – to use all of the above channels as additional means of advertising and customer interaction, if you look beyond the 2.0 horizon it’s inherently wrong and dangerous to use them as means of navigation and therefore as ‘provider’. It might mean loose of control, it might mean potential huge costs in the future, which can go as far as wiping out all of a company’s profits. Businesses fully switching their front door to 2.0 giants Facebook, Twitter, Google or the iPhone, put in all four examples their entire fate into the control of those providers. Those three things can happen:
All of the above threats are real, and still seem to be very much ignored in all the hype.
The domain name system on the other side can avoid all of these pitfalls – as much as it has its problems with still existing cyber-squatting, a somewhat cumbersome governing body called ICANN. Pricing is regulated to avoid that domain name Registries can charge prices just aiming to maximize their own profits. Turn the examples above around, and image for one second for example how wrong it would be if suddenly Facebook.com would have to pay $50 million registration fee per year for its very own .com domain name. They could certainly afford it, and it would even be the right business decision for them to spend that money opposed to losing their key domain name. But Facebook has built the company by being innovative, so it’ll be wrong and stifling future innovation, if a monopolistic organization like any Registry is could charge arbitrary amounts. And so for a good reason they can’t. Individual fighters for the openness of the Internet and governments around the world alike have ensured that this won’t happen, which makes the domain name system a safe harbor for the future.
Compared to this, Facebook, Twitter, Google’s Ad Network and iPhone Apps are proprietary wallet-garden approaches, which present a danger for any business over-extensively relying on it for navigation and addressing mechanisms.
In regards to every business’ own strategy, to sum things up: Building an online business on top of primarily Facebook, Twitter, Google or IPhone Apps, is like building a house on rented ground, with the landlord being completely in control – and you might one day hear “Thanks for building that beautiful villa, now your rent increases from $1 to $100.000 per year!” Don’t let that happen to you. Otherwise, you can all but hope that history repeats itself and that innovative newcomers will continue to challenge the position of those wallet gardens. Just think of the first big one in the early days of the web: AOL.