In the last month, seven applications have been withdrawn from the new TLD process, rounding out the to-date withdrawal number at 62. (For a full list, click here.) It may not seem like it in the face of 1,900+ applications, but 62 withdrawals is kind of a big deal and accounts for an $8 million loss for ICANN, and a loss of more than $3 million for these companies collectively (not including the legal costs involved in presenting and updating their applications, or the cost of time and manpower keeping up with a process that has dragged on much longer than expected).
The main question asked when an applicant withdraws is, “Why?” Fortunately, while many companies have been very tight-lipped on the issue, some companies are issuing releases, thereby helping to define four main reasons for withdrawal:
1. Money and Time. Because right now withdrawals receive 70 percent of their $185,000 application fee in refund, and because that percentage will drop to 35 percent after IEs, we’ll likely see more withdrawals before the Initial Evaluations are through. Aside from the costs of applications, many companies are bailing before contested strings go to auction in order to avoid getting into a contest with bigger companies, like Donuts, Google, or Amazon.
But we’re seeing some big hitters bail, too, like GM pulling .chevrolet, .cadillac, and .gmc (GM has stated that they plan to pull .buick and .chevy, as well), Hilton pulling .hilton, and Heinz pulling .heinz. For these corporations, objections and competition aren’t really a concern — they’ve seemed to have decided that the investment in time and money isn’t going to pay off in the end.
2. Objections. Some applicants are facing scrutiny from government entities, the GAC, the Independent Objector, the public, communities, or all of the above, and so failure may be too eminent. Examples include Top Level Domain Holdings withdrawing .sale, .free, .zulu, and .spa, GMbH Registry withdrawing .gmbh, and the American Cancer Society withdrawing .heart and .stroke. All of these withdrawals have followed early warnings and objections.
3. Community Protection. Probably the most notable example of this type of withdrawal was when Swiss Airlines withdrew their application for .swiss in the face of objections from the Swiss community. In that instance, the Swiss community also had an application in place, that took priority over the Swiss Airline application. The Hartford Fire Insurance Co. also withdrew their application for .hartford, and many are waiting to see if other applications like .amazon, .africa, and .patagonia will follow suit.
4. The Recent GAC Recommendations. The recent GAC recommendations have pushed back the ICANN timeline for new TLDs — at least until after the South Africa ICANN meeting, in July. At this point, applicants have been waiting to see which applications will move through the IE, in order to gauge the competition in contested string lots. The main example here are the most recent withdrawals of .mail, by Afilias, and .llc and .inc by C.V. TLD care — all of which occurred after the recent publication of the GAC guidelines. Each of these TLDs is contested, as well — .mail, by the USPS, and .llc and .inc by governmental agencies concerned that the integrity of the LLC and INC registered marks will be compromised.
We’ll keep watching the TLD process and keep you updated on changes and withdrawals, but to follow your favorite TLDs and receive up-to-date information as they make their way through the application process, please sign up for our free watcher service.