Though .co is the country-code Top Level Domain (ccTLD) for Colombia, the second-level registrations (ie company.co) are available on a global basis and it is being pitched as a direct competitor to the dominant .com gTLD. Google has altered its algorithm to increase the relevance of search results in the .co domain by treating .co as a gTLD and allowing .co website owners to specify the geographic regions they are targeting.  Though .CO Internet has the freedom enjoyed by all ccTLDs of not having to operate under ICANN’s policy framework, they have elected to adopt policies that very closely match that framework, including the Uniform Domain Name Dispute Resolution Policy (UDRP).

The launch of second-level registrations under .co therefore represents, to all intents and purposes, a new gTLD launch, and appears to be a popular alternative to .com for both large corporations and small businesses, at least at this early stage.  Overstock’s purchase of o.co for US$350,000 shows a high degree of confidence in the new .co brand, and Twitter has also joined their list of high-profile anchor tenants, launching t.co as a secure URL shortening service.  Anecdotal evidence also suggests that small businesses are taking the opportunity to secure names within this new space that they had been unable to register in .com or other spaces.

The .co launch is just the latest in a long line of examples of the opportunistic repositioning of ccTLDs to compete in the global market against the ‘official’ gTLDs.  Colombia, like Montenegro (.me) and Tuvalu (.tv) and a number of others are simply leveraging their luck in the two character assignment lottery by opening up their ccTLD to the world.  Both Colombia and Montenegro have however tried to maintain the best of both worlds by reserving third-level registrations (such as .com.co and .com.me) for local entities, thereby providing trusted and dedicated domain spaces for the domestic market, while reaping the benefits of having a desirable ccTLD extension by opening up the second-level to the world.

Despite the fact that they are globally-focused and effectively gTLDs, the success of .co and .me highlights the market opportunity that currently exists for other ccTLDs that are yet to establish a clear market position.  Of course, the vast majority of countries do not have the opportunity to reposition themselves as gTLDs to chase the global market, and in most cases there will be a clear preference to focus on the needs of the local market.

A report (PDF) released by Eurid (the .eu Registry) in June highlights the power that well-established and effectively managed ccTLDs can exert in their local markets.  In Sweden, for example, the local .se ccTLD scored nearly 100% in terms of awareness and 49% for preference, compared with only 34% for .com.  Similar rankings are likely to be enjoyed by other well-established ccTLDs, and we’ve seen similar numbers in relation to the position of .au in Australia.

Many ccTLDs however face a raft of challenges that are preventing them from achieving anything like this sort of local market position.  These challenges can include the absence of local control, legacy systems, inefficient registration processes and restrictive policies, as well as a general lack of local capacity.

When ICANN’s new gTLD program finally comes to fruition (likely towards the latter part of 2011), there will be a dramatic increase in choice for prospective domain name registrants across all regions and language groups.  Those ccTLDs that are yet to position themselves as the pre-eminent domain space and default choice in their local markets therefore have a finite window of opportunity in which to do so, to ensure that they are not consigned to relative obscurity in the face of dozens of new Top Level Domains.

This article by Jon Lawrence, Business Development Consultant from AusRegistry International, was sourced with permission from:
www.ausregistry.com/blog/?p=522