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New Internet Addresses Could Be a Budget Boon for New York City

Lottery games, soda taxes, driving congestion fees — cities are looking everywhere for new revenue. But New York City mayor Michael Bloomberg has a new twist: website registration fees.

How can the city force thousands of businesses to cough up money for their Internet sites? Easy — open a new top level domain at .nyc.

So-called generic 'top level domains' are those last few letters at the end of every website and email address. The most popular, by far, is .com but there are hundreds of others. And whenever a new top level domain opens that's likely to be even slightly popular, every self-respecting company with an Internet presence rushes to lock down the rights to their existing brand names.

It’s already happened with almost all of the other generic domains such as .net and .org, along with new specialty domains such as .xxx.

When the .xxx domain rolled out in 2011, companies registered almost 160,000 new addresses within the first 24 hours. Although it was supposed to be a fenced-off area for adult sites, most of the registrations were from big businesses that didn’t want their names sullied by association with porn.

Southwest Airlines (LUV), Pepsico (PEP), Nike (NKE) and others registered, not to create .xxx sites but to block anyone else from setting up shop at those addresses. Some companies didn't stop there, also registering their major brand names like VF Corp's (VFC) Wrangler.xxx and Kraft Food Group's (KRFT) Oreo.xxx. The University of Kansas spent $3,000 keeping sites like www.KUgirls.xxx from seeing the light of day.

New York City officials have yet to announce prices for the new .nyc domain, saying only that registrants will have to prove they have a primary residence or business address somewhere in the five boroughs. Registration is expected to open in late 2013 and fees are "to be determined."

Mayor Bloomberg and other officials say the new addresses are meant to help local companies capture more Internet business. “With a new top-level domain name, New York won’t just be the greatest city in the world — we’ll also be the greatest city on the Internet,” said Council Speaker Christine C. Quinn in a press release.

The city was apparently the only entity seeking to open a new .nyc top level domain. The Internet Corporation for Assigned Names and Numbers, the non-profit which oversees the domain name system, has been taking applications to run new domains at $185,000 a pop. Big Internet companies such as Amazon (AMZN) and Google (GOOG) filed competing applications for some of the more desirable names such as .book and .music. ICANN itself reportedly garnered $350 million just in application fees for new top level domains.

Whether there’s much value in slapping .nyc at the end of a website or email address remains an open question. But before anyone is even sure of the answer, no doubt the city will be flooded with applications – and application fees.

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