Sorry, but it’s a done deal. Madison Avenue (the worldwide ”Madison Avenue”) has scored big by introducing billboard domain name extensions. It’s coming to the Internet very soon from the Internet Corporation for Assigned Names and Numbers (ICANN). Some 300-500 such applications are expected to be received by ICANN in the first quarter of next year. Companies will be able to use their own name in place of domain extensions such as .com, .org, or .net next year.

In the future when I google basketball shoes, will I get hundreds and hundreds of hits per one company? Take this particular example, all for the same sneaker company, and say it’s the Nodvik company. It might look this for the Nodvik Company.

www.cushioned.nodvik
www.joechampion.nodvik
www.redwhiteblue.nodvik
www.jumpers.nodvik
www.2009title.nodvik
www.airfloaters.nodvik

Can you see how advertisers can link different and many different brand styles to their own name? This, believe it now, is a big-bucks advertising thing, a huge score for business people. Although, it will be an exclusive “country club” — little business guys, take a hike. Get away! Why do I say that? Because along with your application to register your company’s name as a domain name, it will cost your company $185,000. Whether you are a big company, big organization, even nonprofit, it’s still a $185,000 fee.

As you can surmise from the size of the fee, a company will be gaining huge returns under this plan. That’s why companies are lining up to fork over $185,000.

So you and your pals didn’t know about this domain extension change, and you see now how it’s so sneaky? The Internet, in ways like this, is getting more and more commercial. (Even your favorite porn site may be soon be advertising condoms, as such, “www.lambskin.trojans” followed by all the styles linked to their domain extension name.) And you, with your home sneaker business must stay with .com/ Yes, you and every other small self-owned store or outlet. It’s dotcom’s for the small people who can’t afford the registering fee.

Problems may arise for the “country club” companies who will advertise this way. What happens when there’s a mishap, and overnight the public comes to associate the name of your company with, say, that disastrous oil spill. And as for Enron as a domain extension name, well…

Then what about future mergers? Like the one that happened between two sneaker companies, now today called, Adidas Reebok? Mucho bucks for the overhaul to change the old name everywhere.

Moreover, there’s another factor involved in all this domain extension name change format that I can foresee that so far has been neglected. It’s listed on a company’s papers (balance sheet and tax returns) This is an invisible asset that’s treated as something real, as existing, and worth megabucks. When a firm is sold, the buyer may have to pay dearly for this item. The item is called “Goodwill” and it’s considered an important accounting term.

“Goodwill as a term was originally used to reflect the fact that an ongoing business had some “intrinsic value” beyond its assets, such as the reputation the firm enjoyed with its clients. Likewise, a buyer may agree to “overpay” because he sees potential synergy with his own business. The accounting sense of goodwill followed as a plausible explanation of why a firm sells for more than the value of its net assets.”

“Goodwill in financial statements arises when a company is purchased for more than the book value of the company. The difference between the purchase price and the sum of the fair value of the net assets is by definition the value of the “goodwill” of the purchased company. The acquiring company must recognize goodwill as an asset in its financial statements and present it as a separate line item on the balance sheet, according to the current purchase accounting method, its book value. Goodwill can be negative, arising where the net assets at the date of acquisition, fairly valued, exceed the cost of acquisition.[1] Negative goodwill is recognized as a liability.

–Wikipedia, the free encyclopedia

Every company protects its name, its brand for its goodwill money. That’s why millions are spent in advertising the name, Xerox, as a trademark and as registered. One does not XEROX something; one COPIES something instead. And it’s important to defend this name as a trademark because it’s a component of goodwill. Goodwill means money entered on the balance sheet as worth such and such.

Likewise, the same situation will exist with company names used as domain name extensions. What will be happening next year is that each of these companies, on the Internet and in radio, tv, print advertising will be enhancing/increasing the value of their accounting goodwill due to this format change.

And thus, the new Internet format will definitely help consumers in their choice decisions and, of course, help the company’s retail sales through recognition. And as you can see, most important, the new format increases the value of the company itself over time. The goodwill dollar amount is always taken into consideration if the company is sold or for merge accounting with another company. Goodwill must have been a solid behind-the-scenes reason to lobby for the extension names change.

In case you’re wondering, there can be negative goodwill. If a company’s name is tarnished, then the goodwill accounting amount drops in value. An example of negative goodwill can be found on the balance sheets of today’s American auto manufactories.

–30–