What’s in a Name? Millions

dotTV banks on second-level domain names

The residents of the tiny Pacific Island nation Tuvalu used to export one product — coconut oil. Now, they are new media millionaires, having the luck of being issued the top-level domain indicator “.tv”, or what dotTV calls “the two most recognizable letters in the world.”

Through an agreement with Tuvalu brokered in November, Pasadena, Calif.-based dotTV (www.tv) became the registry and registrar for second-level domain names in the “.tv” domain. In return, Tuvalu will receive $4 million a year over the next 10 years.

DotTV, which has big-name players such as Frank Biondi and Peter Lund on its board, is banking that the exploding digital media market has created a high demand for second-level domain names such as “sports.tv” and “comedy.tv,” which dotTV auctions off from anywhere between $100 to $1 million.

The company has had some early success, inking deals with the Pax network, and affiliates of ABC, NBC, FOX, Paramount and Warner Bros. dotTV also benefits from the fact that “.tv” transcends cultural and language barriers; roughly 40% of its business is done internationally.

“We make money by registering names,” says dotTV COO Craig Francis. “We obviously have very high profit margins, but we also offer value-added services such as Web hosting, e-mail services and streaming video that increase our revenues.”

Unusual for the Internet, Francis said the company has already proved profitable. But dotTV faces a few hurdles. First of all, the dot-com backlash has caused many companies to drop the once de riguer suffixes from their official name.

Another potential problem is the Internet Corp. of Assigned Names and Numbers (ICANN). For the first time since the 1980s, ICANN recently approved the creation of top-level domain names that would devalue dotTV’s product.

But ICANN seems nowhere near setting anything in stone. The organization is accepting application from companies wanting to suggest a new suffix; the application process costs $50,000.

ICANN hopes to review applications in November and release a few names in late December.

Despite their deadlines, ICANN seems rife for a bureaucratic breakdown. Their voter registration system recently crashed from 158,000 users. Similar problems could stall the release of domain names and make dotTV even more appealing, especially as Netizens look to the Internet for entertainment.

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