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Analysis & Opinion
24.05.10 For Local Use Only
By Svetlana Kononova

In the middle of May the first Cyrillic Internet address lines using Russia’s own “.??” domain came online. The first Web sites to go live were http://?????????.?? (president.rf) and http://?????????????.?? (government.rf). The innovation is presently one of the most controversial topics under debate in the Russian online community. While critics claim that Cyrillic domains go against the principle idea of the Internet as a global and open space for free international communication, cyber-squatters are already attempting to register the most attractive domain names in Russian.

The process of establishing Cyrillic domain names began in November of 2009 with an application to the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit organization responsible for managing the assignment of domain names and IP addresses worldwide. After the application was approved, the priority registration of second-level Cyrillic domains began. Initially, only the owners of trademarks in Russian were given the right to register domains. Now rights have been extended to brands in other languages. As of July 15, the press and NGOs will also be able to register their domain names in the “national zone,” while the public registration of Cyrillic domains is supposed to start after September 16.

The authorities believe that this priority registration scheme is supposed to protect the intellectual property rights of trademark owners from so-called “cyber-squatters” (people who purchase attractive domain names in advance in order to resell them to the willing companies at a higher price).

Calling the launch of Cyrillic domains a “small, but important milestone,” President Dmitry Medvedev said that “Russia has become the first country in the world to receive a national top-level domain. We have strived for this for two years since the idea came about.” A statement from ICANN said that “Russia is an increasingly important player in the global Internet community. The Russian Federation is among the first group of four countries to use non-Latin characters in the top-level domain portion of Internet addresses, and the first country to be approved for a Cyrillic internationalized domain name. The other leading countries with internationalized domain names recently added to the DNS root zone are Egypt, Saudi Arabia and United Arab Emirates.”

When considering the national domain zone, experts point out both political and social motivations behind this project. “The creation of new national domains is a new stage in Web development,” said Olga Ermakova, the manager of information projects at the Coordination Center for TLD RU, the company that administers the national top-level domains in Russia. “This is very important from a political point of view not only for Russia, but also for other Slavic countries.”

Ermakova believes that Cyrillic domain names could provide easier and more convenient Internet access for users who are uncomfortable with foreign languages and the Latin. “More than 140 million people live in Russia. Only a fifth of them can use the Latin alphabet,” she said. “But the Internet is developing very quickly in all of Russia’s regions. It attracts new groups of users, including pensioners and children.”

The growth rate of the Russian Internet is indeed impressive. A recent survey conducted by the independent research holding Romir found that Internet use in Russia has doubled since 2008. Thirty-five percent of Russian citizens use the Internet on a weekly basis, and 38 percent use the Internet every month. “While just a year ago most Internet users in Russia were male, now the ratio of male to female is equal,” said Anna Shteingart, the deputy executive director of Romir. “More than half of users have university degrees, and the majority have medium and high incomes.”

The expectation is that all of Russia’s social groups will use Web sites with Cyrillic domain names. The Coordination Center reported it had received 12,113 applications for the priority registration of second-level .?? domains. “The .?? domains will not replace the .ru domains, but just add to the list. Having a domain name in the national zone is a question of prestige and pride for governmental institutions. And it is a question of convenience for private companies. Undoubtedly, Cyrillic domains will make it easier to search for Russian brands through Yandex and Google,” said Andrew Kolesnikov, the director of the Coordination Center for TLD RU. “Moreover, it is very difficult to replace some Russian letters with Latin characters. Therefore Cyrillic domains give big advantages to Russian trademarks that have such letters in their names.”

Statistics show that 96 percent of applications for the priority registration were submitted by private companies, and four percent by the government. Ninety-three percent of the domain names reserved are company and brand names. “We can see that big companies with recognizable brands show enormous interest in the .?? domains. Now they want to exercise their right to priority registration,” said Ekaterina Tsarkova, the director of the development and marketing department at the REG.RU registrar. “The owners of medium-sized businesses also consider Cyrillic domains as a great opportunity to expand their consumer base and promote their products and services.” Elena Anikeeva, a consultant analyst at J’son & Partners Consulting, agreed: “National domains are promising marketing tools because it will be easier for Russian-speakers to remember and type domain names in Cyrillic.”

The price of registering a .?? domain name is expected to decrease in the near future. “The market will regulate the price of registration.” Ermakova said. “The accredited registers will set the prices. However, there is strong competition going on between 25 registers. Therefore, it would be reasonable to suppose that the price of registering in the .?? zone would be the same as in the .ru zone – no more than 600 rubles ($20).”

Most experts believe that .?? domains have high development potential, although they won’t be able to overtake the .ru domains in the neatest future. The .ru domain zone, which has been around for over 15 years, has 2,800,000 registered domain names, but only 12,000 applications for the Cyrillic zone have been received in six months.

“Cyrillic domain names might become more popular in Russia than Latin domain names in the long term, because it is much easier for many people to use their native language,” Tsarkova said. “However, we can probably only estimate the demand for national domain names after registration for all interested parties, which begins in October of 2010.”

Ironically, registration in the national domain zone began with a scandal. A private company called Cetis, which promotes brands, registered the names “????.??” (“sex.rf”), “??????????.??” (“dating.rf”), “???????.??” (“mortgage.rf”), “????.??” (“bank.rf”) and several other of the most popular search queries on the Internet. Domain name registration for the future resale is likely to take place at the initial stage of public registration as well.

But the most important question is how to link the idea of a global Internet to the domains designed for domestic users. “If some company plans to expand abroad and work with overseas markets, we as a registrar would recommend registering backup domains in the .ru or .com zone,” Tsarkova said. Russian-speakers who live abroad might also show interest in .?? Web sites, typing the domain names via online keyboards.
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