Domain gold rush: Why your company needs to speak Chinese online

By now, many savvy businesses and investors have heard about the expansion of the domain name system. New extensions (known as “top-level domains” or “TLDs”) are joining .com, .org, .net and the others we’ve grown accustomed to – extensions including generic names such as .bike, .camera and .club, as well as brand name extensions such as .Canon, .Deloitte and .Hitachi.

Lesser discussed in the U.S. are Internationalized Domain Names (IDNs). These are domain names written in multiple scripts and languages that allow users to navigate the Internet without using English. During the application period in 2012 when companies could apply to run their own domain extension, 116 IDNs were applied for, 73 of which were Chinese character TLDs.

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Approximately half of these Chinese TLD applications came from groups in China, but a significant number were applied for by non-Chinese companies.

Now, as IDNs are beginning to come to market, we’re seeing the Chinese market continue to be particularly quick to embrace the new extensions. In fact, the Chinese central government has gone so far as to introduce a new national policy that mandates the use of Chinese character domain extensions for all Chinese government websites. Most popular are .在线 (“.online”) and .中文网 (.website).

Recently, the first live auction of premium names from these two Chinese character domain extensions was held in Macau. The auction raised $182,000 from the sale of 33 domain name lots including “games.online” (游戏.在线) for $25,388, “casino.online” (赌场.在线) for $25,000, “realestate.online” (房地产.在线) for $16,000. In addition, buyers at the auction expressed interest in hundreds of additional premium domain names that weren’t listed on the auction block. Some in attendance even requested portfolios of hundreds of Chinese character domain names. These strong results further verify the strength of these new IDNs in Asia and indicate that the new Chinese character TLDs are experiencing a gold rush similar to the buying-up of dot com domain names in the 90s.

The opportunity for domain investors (particularly those that missed out on the dot com era of buying domains for a few dollars and flipping them for hundreds or even thousands) is clear. For U.S. companies, however, especially the roughly 1,500 doing business in China and others looking to do business overseas, this trend is of vital importance. The value that investors have placed on the Dot Chinese Online and Dot Chinese Website, combined with the endorsement of the Chinese central government, confirms that these IDNs are primed to be successful. It signifies a huge shift in the way the Asian market will navigate the Internet moving forward. Companies that want to garner attention in Asia need to think beyond their brand.com – and even beyond their company name in Chinese characters at a .cn address – and consider adding their Chinese character equivalent domain name under the new IDNs to their portfolio.

Dot Chinese Online and Dot Chinese Website concluded their 30-day Landrush period on April 24, 2014, during which time buyers were able to apply and pay a small premium for a chance to get the domain they really want to secure in advance of general availability to everyone. The TLDs enter the General Availability phase beginning April 28, at which time domain names in Dot Chinese Online and Dot Chinese Website registries will be unrestricted and available for purchase from a worldwide registrar network.

Kathy Nielsen is VP of Business Development, New gTLDs at Sedo. Previously at eToys.com she was Director of Sales and Business Development for their group of content websites. Currently, she works closely with domain registry and registrar clients on special auctions and sales projects, and she develops relationships with current and new strategic partners and domain solutions providers. She is a frequent speaker at advertising and search conferences and continually strives to educate end users and on the value of domain names.