What if the MLS industry does not apply for the .MLS top-level domain?

(This post originally appeared on the MLS Domains Association’s website.)

Our client, MLS Domains Association, is planning to obtain .MLS as a new top-level domain (TLD) on the Internet. Common among the current 22 TLDs are .COM, .NET, and .INFO; but ICANN, the international organization that governs the domain name system on the Internet, is expecting to permit hundreds of new top-level domains. ICANN adopted its final timeline for the new TLDs in June 2011: The application period will open January 12, 2012, and will close in April 2012.

If MLS Domains Association applies and is successful, only legitimate multiple listing services would have domains at .MLS.

Failure to apply during this window means (a) giving up the domain to anyone else who claims it during this window or (b) waiting until the next application window, which industry leaders expect not to come until 2014 or 2015, to apply for .MLS. Both of these alternatives are bad for our industry. If MLSs don’t apply during the 2012 window, it’s likely some entrepreneur will. If no one applies during the 2012 window, the ‘MLS brand’ will continue to be eroded by brokers and third parties for another couple years until the industry can apply. Given the comparatively small cost of applying and operating the new TLD, the industry would be foolish to pass up the opportunity.

First, the costs

For MLS Domains Association to apply for and obtain the .MLS TLD will cost less than $1,000,000. To operate it will cost less than $500,000 per year. Compare that to the costs of other national industry initiatives. I would hesitate to call the amounts trivial, but a one-time expense of less than $1 per MLS subscriber and less than $0.50 per year per subscriber seems a pretty small price to protect the MLS brand. But how will MLS Domains Association’s efforts ‘protect the MLS brand’?

The business case for someone else to seek .MLS

We don’t know who will apply for TLDs in first quarter 2012. But there is good reason for many applicants to keep their plans secret. Imagine that DomainSpec, Inc. (an invented name) is waiting to see whether MLS Domains Association applies for .MLS. Imagine that MLS Domains Association does not apply and that DomainSpec applies for and receives the .MLS TLD. DomainSpec then takes the names of the 500 largest cities and towns and 200 most populous counties in the U.S. (think ‘Chicago.MLS’, ‘DadeCounty.MLS’, ‘Springfield.MLS’, etc.); it approaches real estate agents in each of those markets and offers one broker or agent exclusive use (i.e., domain registration) of her town or market name, plus .MLS, for an average cost of $1,000 per year. The cost would probably be higher for bigger cities and lower for smaller ones, but we can take $1,000 as the average. The resulting revenue of $700,000 per year would be more than enough to operate the registry (especially since DomainSpec could get economies of scale from operating a couple other TLDs) and make a tidy profit. Don’t you think there’s at least one agent in each of these cities and towns who would be willing to pay that price to ‘own’ ‘Chicago.MLS’, ‘Houston.MLS’, etc.?

Even if an MLS participant uses one of these domains to deliver an IDX site (with the necessary disclaimer that the site is not ‘actually an MLS’), the result is that the value of the term ‘MLS’ will be eroded. A site at ‘LosAngeles.MLS’ would be a broker’s site, leaving the visiting consumer confused about what an MLS is. If you think your local brokers now don’t like sites like ‘YourMLSOnline.COM’ and similar pseudo-MLSs, wait until they get a load of ‘Cleveland.MLS’ or ‘Boston.MLS’ operated by one of their competitors.

Because MLS Domains Association is applying for the new TLD as a “community,” it would win over the hypothetical DomainSpec in the ICANN process. But if MLS Domains Association does not apply or fails to reach the thresholds of support required for a community application, I believe someone like DomainSpec will get .MLS.

The business case in the absence of a speculator

Your brokers already dislike the pseudo-MLS websites at domains like ‘YourTownMLS.COM,’ ‘YourMLSOnline.COM’ and the like. MLSs generally cannot prevent such sites from existing, as misleading as their names may be. But with a .MLS TLD available only to MLSs, in time the value of those pseudo-MLS domains would erode. This is true whether or not your local MLS operates a consumer-facing listings website:

• On one hand, if your MLS operates a consumer-facing listings website, it will certainly not hurt for it to be at ‘YourTown.MLS.’ And sites like ‘MLSYourTown.COM’ and others will become less relevant to consumers.
• On the other, if your MLS does not operate a consumer-facing website, it could still operate an ‘IDX clearinghouse’ site, optimized for search engines, that your MLS could use to link out to broker IDX sites. In time, this could take traffic from national aggregators and ‘faux MLS sites’ and redirect it to local IDX sites.

Gathering enough support

Though the costs to obtain and operate .MLS are relatively small, we need to round up as much financial and community support as possible before making the application if we expect to be successful. Despite success in membership recruitment, MLS Domains Association’s fund-raising efforts are somewhat limited because the Association has sought grassroots support as a non-profit organization rather than for-profit investors. You can help now:

• If you are an MLS, join the MLS Domains Association (the cost is $500 or $1500 per year, depending on your MLS’s number of subscribers). Fifty MLSs are already members, representing more than half the MLS subscribers in the U.S.
• If you are a member of MLS Domains Association, claim a domain (or claim a second, third, or sixth). You put up $800 per domain claim, and half that amount remains in escrow until the Association’s ICANN application is approved. Leading MLSs have already claimed more than 250 domains–is your town one of them?
• If you are a partner to the industry (e.g., a provider of MLS, lockbox, or other product or software solutions), become a sponsor of the Association to aid it though its first few years of operation. We expect to be able to announce in September final agreements with two industry partners to be Platinum Sponsors, with one agreeing to provide $50,000 per year for four years and the other providing a $400,000 line of credit for the first five years of operations. (Other levels of sponsorship are available; contact [email protected] for details and sponsorship benefits, etc.)

I’m impressed by the shows of support this effort has received so far, but without more help from the community of MLSs and their business partners, I think we will fall short. I don’t want to wake up some morning next May and hear that someone else applied for .MLS.

I welcome your comments. If you have questions about the Association, contact [email protected] or reach me directly.

-Brian