By Nick Patience
The domain name system that ensures that every time you type in ibm.com you get to Big Blue is slowly morphing into a more intuitive system. That process took a step forward yesterday with a strategic agreement between Network Solutions Inc, the current monopoly controller of the domain name registry for .com and the other most popular domain names, and Centraal Corp, developer of the RealNames system of natural language mappings to URLs. It could eventually end up rivaling the current URL-based domain name system (DNS). With current domain names, users can choose companies other than NSI to register the names, but NSI controls the inclusion of those names in the internet’s database and gets a kick-back from its reseller network. The opportunity for Centraal and NSI here is that, as NSI’s senior VP sales and marketing put it, there will always be more web pages than domain names, and those names need traffic to be driven to them. The RealNames systems enables the individual page to be named and mapped to the URL, which is often quite a complex string for pages deep inside corporate websites. For example, Sony, through RealNames, can direct users to its Handycam site if they type in Sony Handycam, because the real URL has been mapped in the Centraal database to that phrase. Centraal uses a Unicode-based resolution systems and therefore claims to be able to cope with any character from any language in the world. NSI has become the largest single investor in Centraal’s second round of funding, which has just closed. NSI contributed $4.2m of the $13.0m total. That gives NSI 10% of Centraal and NSI CFO and acting COO Bob Korzeniewski says NSI has warrants and targets, which if met, will give NSI just shy of 20%, of Centraal. Centraal’s founder and chief executive Keith Teare says the company will probably look for additional funding within 18 months, either through an initial public offering or another round. The other investors are Compaq Computer Corp, Amerindo Investment Partners, New Millenium Partners as well as the company’s existing investors, idealab Capital Partners and Draper Fisher Jurvetson, who all maintain their existing stakes in Centraal. Teare was especially excited about Amarindo, because of its other investments in Amazon.com Inc, eBay Inc and Yahoo Inc, among others. Centraal plans to use the new money to expand internationally and enhance its distribution channels. The deal with NSI is exclusive, so Centraal cannot go after NSI’s 150 or so channel partners – almost all of which are ISPs – customers. But in return there are sectors of brand name holders carved out for NSI’s exclusive targeting. NSI gets a percentage for each RealName registration it sells and a fee for providing back-end fulfillment services, such as billing, which will kick in mid-way through 1999. NSI says the deal is not likely to have any financial impact on it until late in 1999. The two companies are looking for tens of thousands of RealNames next year with the real volume appeaering in 2000-2001. Centraal currently has 15,000 RealNames registered at $100 per year. eBay Inc, for instance, has registered 1,100 of them, says Teare. There are alternatives to RealNames, for instance the Smart Browsing technology inside Netscape Communications Corp’s Communicator browser, Microsoft Corp’s AutoSearch within Internet Explorer and a system from a company called Netword. But Centraal’s marketing efforts – and it would argue, its technology – seem to be ahead of the game for the moment, at least. Centraal’s Teare says that RealNames overrides the Netscape and Microsoft system, but he emphasizes that he is not looking for conflict here and the company is continuing discussions with both Netscape and Microsoft about the possibility of their adopting the RealNames system. There was talk of Compaq including a RealNames icon on the desktop of some of its PCs next year as part of this deal, but Teare would only say that even if such a deal had been struck – which it hasn’t for now – it could only happened by the third quarter of next year at the earliest. However, Centraal has had a deal with Compaq’s AltaVista unit for some time, whereby the first result for a search query through AltaVista is the offer to establish a RealName to match that query. At present it is the main traffic-generator for Centraal and it also has a deal with the LookSmart search engine, targeting webmasters. Both NSI and Centraal have submitted proposals to the Internet Engineering Task Force (IETF), suggesting systems for so-called human-friendly names. They are looking to establish a working group within the IETF, which is the first step in getting the subject addressed and it will be discussed at the 43rd IETF meeting, being held in Orlando, Florida this week (http://www.ietf.org). Centraal has a semi-autonomous division headed by Bill Washburn that adjudicates on whether or not a company or person should be allocated a RealName – they are not done on a first come, first served basis. And generic terms such as ‘woman’ or ‘car’ are not available for registration. Under the terms of the deal, NSI gets a full seat on the Centraal board, while Amarindo and Compaq get non-voting, observer’s seats.