The New Gold Rush in Domain Name Suffixes From .com to .doctor

| FROM THE PRINT EDITION |
 
 

Don’t look for flour, sugar and cooking oil in the Bellevue offices of Donuts Inc. You’re much more likely to find people taking advantage of major new changes in the internet rather than plotting the overthrow of Top Pot or Krispy Kreme.

Donuts is an internet registry founded by four men with a lot of experience in the intricacies of internet domain nomenclature. The firm recently raised more than $100 million in venture capital and has spent $57 million to buy rights to new internet suffixes.

That’s right. The world is just too small to be limited to “.com,” “.net,” “.org” and “.gov.” After all, if you’re a dentist, doesn’t it make sense that your branding efforts culminate in DrFeelGood.dentist as opposed to DrFeelGood.com?

The move toward increasing the range of generic Top Level Domain names, more commonly known as gTLDs—those are the internet suffixes to the right of the dot—has been surprisingly subtle given the billions of people it may affect. Subtlety, however, isn’t the modus operandi at Donuts, which has applied for more than 300 of these new suffixes.

“This is a brand new opportunity and it’s really exciting,” says Donuts cofounder and COO Richard Tindal. “The internet is about to go from black and white to color.”

That’s one man’s metaphor and it may be a stretch. But here is what’s happening: There are currently 22 approved suffixes, including “.com(merce),” “.gov(ernment),” “.edu(cation)” and “.org(anization),” as well as 250 two-letter country codes. Earlier this year, the Internet Corporation for Assigned Names and Numbers (ICANN), the private, nonprofit organization that runs the internet’s Domain Name System (DNS), announced an open application process for domain expansion to take “a significant step forward on the introduction of new generic top-level domains.”

From A (“.art”) to Z (“.zone), the suffixes Donuts has applied for suggest an eclectic mix of interests and/or opportunities (see box). Suffixes using nontraditional characters, such as Chinese letters, were also available. (Donuts has applied for characters representing “games,” “store,” “entertainment” and “enterprise.”) The application fee for each suffix was $185,000 to cover costs like program development and application processing. ICANN took in $350 million in fees from 1,930 proposals.
Big companies with familiar names are in on this domain land grab. Amazon, not surprisingly, wants “.book” (so does Donuts), along with “.cloud” and “.kindle.” Google applied for more than 100 suffixes, including “.google” and “.android.” Apple covets “.apple.” Microsoft wants “.bing,” “.docs,” “.hotmail” and about 20 others.

This is not an endeavor for the underfunded. Once a suffix gets ICANN’s approval, the registry must commit to a 10-year lease and pay ICANN at least $25,000 a year to maintain it. In cases where two or more parties have applied for the same suffix, they can try to work it out among themselves—with cash being the most common persuader. If that doesn’t work, ICANN will conduct an auction. Tindal says Donuts expects to spend millions of dollars in the auction phase.
So who benefits from this brave new, expanded internet?

Tindal suggests it will be the consumer. “We think new names are going to be more meaningful, shorter,” he says. “We’re giving to the market domain names that more easily and accurately reflect the identity of whatever a registrant is trying to convey.”

Others think that the big winners are ICANN, which used to be a United States government agency but is now privately run, and registries like Donuts. Mathew Ingram, a Canadian business/technology reporter, calls the new gTLD expansion a “train wreck.” Last June, he posted this comment on GigaOM, a technology blog: “The fact that no one seems to have been clamoring for these new top-level domains raises the question of why ICANN bothered to implement a new system at all. The agency—which has been criticized in the past for its secrecy and lack of accountability—says that it is designed to enhance competition, but others argue that the domain business has been pretty competitive for a long time.”

Donuts itself has raised some eyebrows for its apparent ties to Demand Media, the creator of online content linked to popular search terms. Last summer, a Boston lawyer complained to ICANN on behalf of an unidentified client that Demand Media is a known cybersquatter and that two of Donuts’ founders—Tindal and Paul Stahura—are former top execs with Demand. The lawyer, Jeffrey Stoler, says Demand and, by extension, Donuts, shouldn’t be trusted. According to The Washington Post, Demand shares rights to 107 of the domains for which Donuts has applied. Demand and Donuts also have an agreement that permits Demand to provide technical services to new domains that Donuts acquires. Donuts insists it is a separate entity “bringing variety and choice to internet naming.”

Ultimately, nothing is likely to dethrone “.com” as the king of top level domains. Researcher Thies Lindenthal, who runs IDNX, which tracks the relative value of domain names, says, “It’s pretty safe to claim that dot-com will remain a loyal domain space,” especially since other suffixes approved by ICANN in recent years—anyone remember “.aero,” “.museum” or “.travel”?—have not set hearts aflutter.

Nevertheless, Donuts is betting that someone out there or, more accurately, many someones out there, are willing to pay a lot of money for just the right suffixes to become masters of their domains.

Additional reporting by John Levesque

[Virtual] Reality Check

[Virtual] Reality Check

Seattle companies will cash in on the coming VR explosion. How it plays out beyond gaming is the next big question.
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After years of hype about virtual reality, it stands ready to move from The Matrix and Avatar into real life, with applications ranging from gaming to e-sales, from collaborative product design to remote surgery. What’s more, many companies in the Seattle region will reap the benefits.
 
“It is a paradigm shift,” says Bob Berry, CEO of Envelop VR, a virtual reality startup in Bellevue. “It’s a new form of computing that is just as transformative as mobile was. We are entering the age of immersive computing.”  
 
Those heralding the arrival of market-ready VR aren’t merely the ones developing the technologies. Investors have become true believers, too. Matt McIlwain, managing director of the tech-oriented Madrona Venture Group, says he was a VR skeptic until recently. “Eighteen months ago, I started meeting with a group of companies that had very early developer kits,” says McIlwain, who noticed two things had changed from earlier efforts. First, the VR experience was “pretty darn good.” Second, he adds, “I didn’t feel woozy coming out of the experience.”
 
Forest Key, CEO of Pixvana, a Seattle startup developing cloud-based tools for VR, couldn’t agree more. “VR in the 1990s made me vomit,” Key relates. But thanks to rapid advances in the underlying technologies, such as faster processing, better graphics and new methods for tracking movements, says Key, virtual reality systems that will hit the consumer market this year are more immersive and much less likely to induce “simulator sickness.”
 
“For hundreds of dollars, or certainly in the low thousands, you can build a rig that is superb in its capabilities and fully capable of tricking your brain into the effect that virtual reality strives for,” Key says. “Once done correctly, it’s like time travel, teleportation and science fiction all in one. It magically transports you to different places and profoundly allows you to have a psycho-perceptual experience that is different than watching a rectangle on a web browser.”
 
The launch this spring of three much-anticipated VR headsets — Facebook’s Oculus Rift, the HTC Vive and Microsoft’s HoloLens — spurs the optimistic frenzy. The Oculus Rift costs $600 and the HTC Vive goes for $799; both are aimed at the consumer market. Microsoft is selling 
HoloLens as part of a developer’s kit for $3,000. It’s aimed at game makers as well as those developing practical applications. 
Of the three companies that have introduced new headsets, only Microsoft calls the Seattle region home. But HTC, which developed its Vive headset in partnership with Bellevue’s game colossus, Valve Corporation, headquarters its United States operations in Bellevue, and its VR offices are in Pioneer Square, about a mile from the SoDo site where Oculus VR recently opened an R&D office.  
 
Los angeles, Silicon Valley and Seattle constitute the three major hubs for VR development, but Seattle may be ideally positioned to benefit most favorably from the coming VR explosion. While Los Angeles has a large pool of entertainment talent to draw from and Silicon Valley has an edge in hardware development, Key says Seattle has two major advantages: companies with long experience in game development and a vast knowledge of cloud services. While single-person VR experiences can run on isolated computers, Key notes, running interactive VR applications requires a cloud-based infrastructure.
 
“In three years,” he predicts, “no one will be debating whether the hardware is ready. It’s going to entirely become a question about software, about content.” In fact, Tom Furness, a professor of industrial engineering at the University of Washington and considered by many to be the godfather of VR, says, “The hardware is here. Now it’s about the content and tools to help us develop content easier and better. We don’t have those tools right now.”
 
Furness recently joined Berry’s Envelop VR as its senior scientific adviser. He says he chose to work with Envelop because it is developing what he considers “the most essential component” for the VR industry. “It is the superglue that brings together and integrates all of the hardware, software and experience design components that make VR an empowering tool for mankind,” Furness says.
 
Madrona Venture Group has been a lead investor in many of the burgeoning VR companies in the region, including Envelop and Pixvana. McIlwain believes the concentration of game and cloud application developers makes the Seattle region the natural location for developing VR content and the tools required to create and deliver the content.
 
“The gaming ecosystem in Seattle is really good,” notes McIlwain. “But, then, this is also the cloud capital of the world. I can go down the street and talk to my buddies at Microsoft and Amazon and ask, ‘What kind of use cases are people using you for? What are the next things you’re building? Why do you need to support this kind of video encoding?’”
 
Key says gaming will be the primary driver of consumer VR sales, but investors and developers alike see VR as a much broader game changer — from education to health care to manufacturing. “[For example,] meetings and conferences,” Key observes. “Meeting with your doctor or your trainer. Any kind of one-to-many or one-to-one communication will be very powerful in VR.  It might be education, or therapy.” 
 
Furness matches Key’s excitement at VR’s potential for bridging distances. “It’s basically a transportation system for the senses, where you can meet with other people even though you’re not physically co-located,” Furness notes. “You can bring people together and get bandwidth not only to the brain but between brains.”
It’s not quite the Vulcan mind meld Mr. Spock used to great advantage in Star Trek, but it’s close. “[VR] will let us look through somebody else’s eyes, let us communicate our perspectives and [give us a space] where we work on things together,” Furness told KUOW last year.
 
In the training sphere alone, whether it’s showing surgeons how to remove a gallbladder or giving aircraft technicians a how-to on painting a helicopter — without wasting any paint — VR promises to revolutionize how teachers teach. 
 
Even Seattle companies you wouldn’t immediately associate with VR are getting into the act. Boeing, which has long used augmented reality for flight training, used VR in the aforementioned example on painting helicopters. Amazon and Vulcan are hiring software engineers with VR expertise, Amazon apparently with an eye on its growing position in film and television production and Vulcan expressing a vague interest in “developing cutting edge solutions in augmented and virtual reality technologies.” 
 
“There are a lot of exciting applications that are in the commercial realm in addition to the consumer realm,” adds McIlwain. He envisions a group of architects “walking around” inside a building in VR, discussing design changes. “Or I can Skype into an interactive session to help a doctor figure out a diagnosis, or help someone repair something in a manufacturing facility. I don’t have to be physically present.”
 
Microsoft designed HoloLens primarily for such nongaming markets. At its Redmond campus last fall, the company demonstrated HoloLens by giving users a full-size 3-D view of a new Volvo sedan, with the ability to look under the hood and remove elements to explore the chassis and power train. Volvo is exploring having its engineers use HoloLens in the design process. One Microsoft video shows a designer looking at a motorcycle and simply touching and pulling on the gas tank, for example, to change its shape.    
 
E-commerce constitutes one of the most immediate and massive nongaming markets for VR. Imagine, Berry says, shopping on Amazon.com for a tent that sleeps six. How big is that tent, really? Big enough for six large people?
 
“I have no way to reason about the actual size of that tent other than looking at 2-D images, or maybe a little 3-D model I can spin around,” Berry says. But imagine clicking on a button next to the tent to summon up a VR view. “Suddenly,” he explains, “you’re inside the tent at scale and you can actually get a sense of how big the thing is. VR allows you to sense scale in a way that your brain can actually understand.”
 
As game makers move into the VR space, new startups in Seattle zero in on developing the tools that will simplify developing those games, as well as any other type of VR application.
 
Envelop VR, which launched in July 2014, developed a VR shell that goes around the Windows computer, allowing users wearing an Oculus Rift headset to work in Microsoft Windows in a 3-D environment. A camera on the Rift headset offers the user a view of the keyboard or mouse so he or she can control the immersive experience of Windows.  
 
The company is also building tools that let developers convert 2-D objects created in, say, AutoCAD, into 3-D objects in a virtual app in the environment. Besides allowing users to explore tents in 3-D while shopping online, the technology can be used in other sectors, such as manufacturing. “An engineer on an auto manufacturing line could put a headset on, export a 2-D design into a VR environment and walk around the object, lean their head into it and evaluate in a much more intuitive way,” Berry says.  
 
Pixvana focuses on delivering a cloud-based video-processing and delivery platform for virtual reality applications. After working on the Silverlight team at Microsoft, and before that as a visual effects specialist at Industrial Light & Magic, Key was aware that VR hardware, to be effective, will require new technologies for processing video at required speeds, especially when interactive applications require cloud services.
 
The new VR applications, says Key, “will require new kinds of tools, new kinds of production process, new kinds of experiential viewing processes. That’s what Pixvana’s mission is.”
 
As engineers put the finishing touches on the soon-to-be-released VR headsets and technologists of various specialties prepare the infrastructure the headsets will run on, industry insiders are not entirely specific on how VR will affect the economy and society. But they are convinced the impact will be huge.
 
In the near term, McIlwain predicts VR products will be adopted quickly. “Smart headsets will become pretty ubiquitous in two to four years,” he says. “Based on what I’ve seen, this stuff is pretty high quality and the chances are good that we are going to get some pretty good headsets out there in the second quarter. And then we’re going to have a big uptake cycle for the holiday season.”
 
As for the longer term, Key believes VR will be as disruptive to earlier technologies as cinema was to vaudeville. “The idea of sitting and watching a static rectangle on a screen will be very passé in 10 years,” he predicts, “because virtual reality is so fundamentally compelling. It’s magical.”  
 
Thanks to that magic, VR pioneer Trond Nilsen told a meeting of the Washington Technology Industries Association last November that we’re all going to live at least part of our lives in virtual reality at some point. “[And] the world,” Nilsen promised, “is going to get strange.”