Are You Ready For One of the Biggest Changes on the Internet in a Decade? (PERSPECTIVE)

By Judy Shapiro

What's Really At Stake In ICANN's Coming New Top-Level Domain System.   Tic Toc …

ICANN's New Generic Top-Level Domain Program is just about to kick off and I bet most of you are wondering what the heck those are anyway (don't feel bad if you don't know – neither did I until recently). Then, you are also probably wondering why you should care.

First, the basics. A "generic top-level domain" is the part of the domain name to the right of the dot, e.g. in "http://www.ICANN.org" - the "org" is the top-level domain (TLD). There are 22 generic TLDs (gTLDs) such as .COM, .ORG and .NET, and around 250 country-code TLDs (ccTLDs) that are specific to certain countries, like .JP for Japan and .MX for Mexico.

With ICANNs New gTLD Program to commence January 2012, the doors will be thrown wide open and virtually any word can become a gTLD if the company or organization meets certain criteria:

• They can pony up the hefty application fee ($185,000)
• They can prove they can afford to run a gTLD year after year
• They can justify why they should own a particular word as a gTLD – e.g. a travel company is unlikely to be successful at justifying buying ".Apple" as a gTLD but they can justify buying "adventure"

If a company can meet these criteria - then congratulations – they've just become a registry. Amazon can buy ".books" and JetBlue can buy ".fly". And if two companies want the same word and can't reach an agreement on their own, an auction commences with the word going to the highest bidder.

The application process itself also has significant impacts because, by default or design, it seems optimized to drive a gTLD land grab within a very short, four month time frame. All applications are closed and not publically disclosed until after the brief application period is over (on April 12, 2012). With no assurances of another application period, many companies will feel compelled to take advantage of this possible 1x only event.

As to the "so what" of all this - well - there's a long list:

From an industry perspective: The leading marketing trade organizations like the ANA and IAB have been vocal and consistent critics of this initiative. Other critics have questioned the motives of former ICANN members who voted this initiative through and who subsequently left ICANN to start or join companies that sold gTLDs.

From a marketer's perspective (and their agencies): Here's the bad news. If you're at a Fortune 300 company, it is likely your IT/ legal department will advise you to purchase multiple (possibly a dozen) gTLDs.

Now even if you manage to avoid getting hit directly with that cost (for now), you will still have to spend a hefty chuck trying to figure out what to do with these new "marketing assets." Unquestionably, there will be many [expensive] experiments to explore useful applications of gTLDs - from SEO optimization to new types of customization programs, e.g. personalized "judyconsumer.books" URLs for a highly customized experience.

In the end, it's likely you may have to redirect active program dollars into this experimental space. This adds yet another layer of complication to an increasingly complicated marketing environment.

From a consumer's perspective: Just when we thought it was kinda safe to go into Internet waters because we had a basic understanding of what a safe URL should look like … now anything's possible. With hundreds of new gTLDs likely to be introduced starting next year, consumer confusion is virtually guaranteed. There's little doubt fraudsters intend to exploit this new window of vulnerability.

From an emerging country or company perspective: The stakes get even grimmer for an emerging company or country. If you don't/ can't qualify today – chances are you are locked out for a very long time – maybe forever.

Now you can see why there is a lot at stake. Yet, when I spoke to my IT and marketing peers at the largest companies, there was a near universal lack of information on this topic! So somewhat spontaneously (driven by timing urgency) and with the help of CADNA (the not-for-profit Coalition Against Domain Name Abuse), I helped create an industry conference called "What's At Stake" for November 1 in NYC that is open (free) to ANY brand marketer needing to understand this space. The conference was created as an industry service and includes keynote speaker Esther Dyson, founding Chairman of ICANN, HUM News, FairWinds Partners and Friends of the U.N. among others.

The goal for this discovery conference is to drive a productive change to the current process by presenting a balanced view of the new gTLD Program with an emphasis on exploring the impacts, and proposing to ICANN alternate processes we believe are not too late to implement (read full recommendation to ICANN here).

There's a lot at stake for marketers and consumers globally. Find out more about the coming changes to the internet at www.whatsatstake.com.

About the author:  Judy Shapiro is CEO of engageSimply, a digital marketing agency pioneering `Many to Many’ platforms; chief brand strategist at CloudLinux and has held senior marketing positions at Paltalk, Comodo, Computer Associates, Lucent Technologies, AT&T and Bell Labs. Her blog, Trench Wars, provides insights on how to create business value on the internet.

HUMMONEY - Another Black Swan (Perspective)

-- By Greg Lewin 

The internet has always been a wonderful and dangerous two edged sword of information. Facts and opinions abound unfiltered and unchecked, more often than not of questionable value. But if you spend the time to verify and validate you can gain incredible insight. Over the past several months I have been following an intriguing series of observations which I would like to share which can potentially have important investment implications for investors worldwide.

In March 2010 I read an article in Le Monde, “Washington Considers a Decline of World Oil Production as of 2011.” In the article they interview Glen Sweetnam, who heads the publication of the Department of Energy’s annual International Energy Outlook. He describes what he identifies as a decline of liquid fuels production between 2011 and 2015 as the first stage of the “undulating plateau” pattern which will start when “maximum world oil production is reached.” Further in an April 2009 DOE round-table document entitled “Meeting the Growing Demand for Liquid Fuels,” the DOE had predicted that the decline of supply will be 2% per year starting in 2011, from 87 million barrels per day to just 80 Mbpd in 2015 as demand rises from the current 86Mbpd to 90Mbpd over the same period.

This is some pretty heady stuff so I thought it best to continue to see if we could find some more evidence. In April I found the following statement from the Energy Summary of the United States Department of Defense’s 2010 Joint Operating Environment Report: “By 2012 surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10Mbpd.”

In February 2010 The UK Industry Taskforce on Peak Oil and Energy Security had issued a lengthy report entitled “The Oil Crunch: A Wake-Up Call for the UK Economy.” This is a group of private British companies whose interests span a wide range of business sectors. And the presentation of this data at the Royal Society included Richard Branson of Virgin Group. Amongst their conclusions was that the net flow rate data shows that the increases in extraction will be slowing down in 2011-2013 and dropping thereafter. So the drumbeat of credible sources continues to support similar conclusions.

Another voice chimed in July 2010, as reported in The Guardian, “Lloyd’s Adds Its Voice to Dire ‘Peak Oil’ Warnings.” In a report issued by Lloyd’s of London called “Sustainable Energy Security: Strategic Risks and Opportunities for Business,” they state, “Even before we reach peak oil we could witness an oil supply crunch because of increased Asian demand. Major new investment takes 10-15 years . . . and to date we have not seen the amount of new projects that would supply the projected increase in demand.”

And finally from Spiegel Online in September 2010, a study claimed by the online newspaper to have been confirmed by sources in government circles and not meant for publication produced by the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military, points to peak oil occurring around the year 2010.

This subject is so very important because quite simply, energy makes the world go round. And given that alternatives are not remotely in position to absorb meaningful energy demand (and I recommend you look into this for yourself) this situation resolves itself in 1 of 2 ways: either meaningfully higher prices for not just energy but virtually everything you use in life that is transported, grown in the ground and manufactured, or demand falls meaningfully which means lower consumption, slower economies, poor job prospects and lower stock prices.  Now is the time for investors to think, verify and follow up because the first way to avoid the Black Swans is to identify and analyze them before they hit the pond.

---The views expressed here are of the author, HUMMoney contributor Greg Lewin; currently a General Partner at TLF Capital, an investment management firm. During the past 26 years he has been a senior money manager or partner in Wall Street firms including Neuberger Berman, Charter Oak Partners and Sailfish Capital.

HUMMONEY - The Brain Debate (Perspective)

- by Greg Lewin

Josh Waitzkin wrote, “Depth of knowledge beats breadth of knowledge everyday because it opens a channel for the intangible, unconscious and creative components of our hidden potential.”  He also wrote, “…not only do we have to be good at waiting, we have to love it. Because waiting is not waiting, it is life.”

These 2 thoughts from Josh Waitzkin, who was first profiled in the movie “Searching for Bobby Fischer,” help us launch a brief discussion of how the internet impacts our thought process and ultimately our ability to invest. 

PRO: Collective Intelligence: The notion that what determines the inventiveness and rate of cultural change of a population is the amount of interaction between individuals. Once human progress started, it was no longer limited by the size of human brains. Intelligence became collective and cumulative (Matt Ridley).

CON: Only when we pay deep attention to a new piece of information are we able to associate it meaningfully and systematically with knowledge already well established in memory (Eric Kandel). When we’re constantly distracted and interrupted, as we tend to be online, our brains are unable to forge the strong and expansive neural connections that give depth and distinctiveness to our thinking. We become mere signal-processing units, shepherding disjointed bits of information in and out of short-term memory (WSJ).

In reality both arguments can be very supportive of the internet as a powerful medium for development, growth and change. But in application the tool, too often, dictates, rather than serves, investor behavior. The brain is infinitely complex, invested with boundless potential. However, the 2 arguments above combine to suggest that when the tool is not managed the power of the brain becomes diminished. Nicholas Carr writes, “The average web page entices us with an array of embedded links to other pages, which countless users pursue even while under constant bombardment from email, RSS, Twitter and Facebook accounts… We lose the ability to transfer knowledge from short-term “working” memory to long-term memory, where it can shape our worldviews in enduring ways.”

Patience and insight, invested with a command of the facts, will foster investor success. Therefore, we are compelled to both attach ourselves to the Collective Intelligence as well as detach ourselves from this cultural/intellectual phenomenon to engage the power of our individual intelligence. As we have counseled in the past, this is no easy task. There is an infinite array of media and business sources invested in your ever increasing attachment to the web in all its varied devices.

Josh Waitzkin has achieved enormous success in both the worlds of chess and martial arts. On the surface, they seem to be extraordinarily different disciplines, yet at the core, they are very much the same. His mastery evolved from his ability to learn and adapt. He harnessed the capacity to process vast amounts of information, create important relationships and find the space to be creative and insightful. This is the balance we wish to achieve as investors, both attached to the internet and at the same time apart. 

- The views expressed here are of the author, HUMMoney contributor Greg Lewin; currently a General Partner at TLF Capital, an investment management firm. During the past 26 years he has been a senior money manager or partner in Wall Street firms including Neuberger Berman, Charter Oak Partners and Sailfish Capital.