Cindy Palacios wants to market her downtown salon on the Web, but she doesn't want to be associated with washed up, ailing dot-coms. She also wants her site to be distinctly L.A., i.e. hip, fashionable and cutting edge. That's why she grabbed one of the new dot-la domain names for her Gerrick's Salon.
"This is a great opportunity for me to take Gerrick's online and reinvent my business," Palacios said. "I'm an L.A. native and I've been in this business in L.A. for 25 years. The dot-la name reflects that better than a dot-com would."
That's just the sort of sentiment the company registering dot-la hopes will be widespread beginning this month, when dot-la becomes available for the first time to the general public.
L.A.-based dotLA Inc. formed in November to market dot-la domain names after company CEO Garry Donoghue and his co-founders secured the rights to the name through a licensing deal with the government of Laos.
"While the Internet and the economy here are global, there's no denying that huge numbers of Los Angeles businesses rely on the regional market for the lion's share of their revenues," Donoghue said of the domain.
Dot-la is a country code top-level domain (ccTLD) assigned to Laos by the Marina del Rey-based International Corporation for Assigned Names and Numbers (ICANN), the company responsible for administering the Internet's addressing system.
Eager to profit from the dot-com crunch, companies like dotLA began negotiating with countries to use the codes about three years ago.
ICANN prohibits countries from selling their domain names outright, but dozens of developing countries have struck licensing deals in exchange for free computers, Internet service, cell phones and cash.
Donoghue and his partners delivered communications infrastructure and educational programs to Laos, an investment that totaled $6.7 million, according to Donoghue. The country will also share in revenues generated by dotLA, though Donoghue declined to say what that participation would be or if there were any minimum guarantees.
Internet shakeout or not, dot-com real estate is still being snatched up by entrepreneurs, Fortune 500 companies and small business owners seeking to establish a Web presence.
Palacios' Gerrick's Salon is one of 12,000 businesses nationwide that have so far pre-registered a dot-la domain name since the pre-registration period began Dec. 1.
To avoid potential cybersquatting, dotLA mailed over one million letters to companies nationwide announcing the availability of dot-la addresses. Over 325,000 L.A.-based businesses were contacted as part of the campaign.
The businesses that pre-registered agreed to pay $200 per name for the first year and $100 per name for each additional year.
In its advertising campaign, set to launch in L.A. this month, dotLA is targeting businesses with headquarters or subsidiaries in L.A. The company expects to spend about $13 million on marketing dot-la in 2001.
"Anyone who has ever lived in Los Angeles knows that L.A. is an attitude as much as it is a place," Donoghue said. "Many businesses here thrive on the cachet of their L.A. address, and what that location conveys to the customers who buy from them."
DotLA also hopes to attract companies that have been unable to get the URL they wanted in other top-level domains because the names have already been snared cybersquatters.
DotLa is not the only local company hoping to profit from registering ccTLDs. In a deal made last April, Pasadena-based dotTV partnered with the Polynesian island of Tuvalu to market and register dot-tv worldwide. A 10-square-mile country with about 11,000 residents, Tuvalu will receive $4 million a year from dotTV, which is registering tens of thousands of domains each month.
Even though dotLA offered a pre-registration period, it and other domain name registries feed a cottage industry of cybersquatters.
"Unfortunately, the addition of dot-la creates confusion in the marketplace in terms of trademark issues," said Scott Alderton, partner with L.A. law firm Troop, Steuber, Pasich, Reddick & Tobey LLP.
Cybersquatters scoop up trademarked names with the new domain suffixes and hope to sell the names back to the trademark holder.
"It's a slam dunk legal case that I'll get the name back from cybersquatters, but rather than pay for a lawsuit to get it back, the trademark holders usually opts to pay a lesser sum to the cybersquatter to get the name back," Alderton said.
Alderton is also skeptical about the dot-la domain because of its geographic narrowness.
"It could be valuable for certain narrow applications, like for L.A.-oriented events, but I suspect that in the entire landscape of the Net, dot-la will be relatively insignificant," he said. "After all, the whole promise of the Net is its global reach."
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