.xxx rated: internet's red-light district has arrived

Stuart Lawley is expecting a gold rush – and xxx marks the spot. Following a decade-long battle, his company has been given the go-ahead to set up a new sponsored top-level domain targeting the adult entertainment industry. Despite the approval of .xxx the controversy, predictably, has raged on.

ICM Registry, which is based in Florida's Palm Beach and run by Mr Lawley, is overseeing the .xxx domain registration and today is a significant step towards the emergence of thousands of sites with the evocative three letter suffix. From this morning companies and brand owners will have a 50-day "sunrise" period to bid for their own piece of real estate in what has been dubbed the "internet's red-light district". Both adult entertainment companies and those worried about their reputation can apply to pick up their own brands.

Mr Lawley said that while several .xxx sites had gone live as part of the founders programme, today marked the "proper opening of the doors of the registry". In the not-too-distant future, he expects there to be close to half a million .xxx sites.

ICM said the new domain was created "to promote a responsible approach to adult content on the internet and offer clear signposts to its locations online". The first to go live with the new domain name was Casting.xxx early last month and since then a further 1,500 sites have been approved. Mr Lawley called it a "win, win, win" development for the industry pointing to benefits for porn consumers, those providing the content and those who wanted to avoid it altogether.

For those that want to avoid porn altogether .xxx will leave internet users "in no doubt about the underlying content of the sites," he added.

ICM first applied to register the .xxx domain in 2000 but Mr Lawley admitted there was little real hope it would be approved by Icann, the not--for-profit corporation that oversees the internet's naming system, at that stage. It applied again in 2004, but Mr Lawley said, "the US government and the Christian Right became enraged".

It would be engaged in costly legal battles for another six years, but Icann finally approved .xxx last year – although three of the 16 board members opposed the move and four abstained. After its approval, there were 900,000 requests lodged for 650,000 unique names. "The phone has been ringing off the hook," Mr Lawley said.

After the "sunrise" period closes, there will be a "land rush" from 8 November giving adult businesses premium access to the remaining sites; 17 days later it will become a free for all. ICM's conservative estimates were of 150,000 sites, but Mr Lawley said: "I think it will be closer to 500,000". Interest from consumers was also initially high. Traffic to Casting.xxx spiked in August, briefly overtaking Sex.com, according to data from internet tracking site Alexa, although its popularity has waned.

Mr Lawley said it reflected trends that the adult industry was trying to regulate itself and confirmed it as an early adopter of technology. "From the VCR and the Camcorder to the internet the adult industry has always been quick to take up new technology and trends," he said.

Porn sites have a bad reputation for spreading viruses and malware – although Mr Lawley said there was little firm evidence to back this up – but to encourage visits to .xxx sites, ICM has signed a contract with McAfee, the internet security company, to scan all of the .xxx sites.

Mr Lawley added that the adult industry would benefit as it will ensure "responsible adult content is easily identified online, leading to greater and more predictable revenues". Yet several have reacted angrily to the prospect of having to pay to register their site with a .xxx domain or face losing it to a competitor. Mr Lawley said that complaints have been the exception, with the majority of the industry welcoming .xxx.

ICM have spent close to $20m getting to this point, but hopes it can raise somewhere close to $30m in its first year. The company sets its rate at $60 a year and has made close to $4m from its founders programme. The sites have to be sold through registers who vary their pricing. GoDaddy charges $99 a year while Domainmonster charges $77. Dan Cryan, a senior analyst at IHS Screen Digest, expressed doubts over the importance of .xxx. He pointed out there was plenty of porn available already on the web, a trend that would not change. "This seems to be primarily a marketing ploy. It may make some sense for established brands," he said.

Jerry Barnett, the managing director of Strictly Anywhere,which has rebranded to Anywhere.xxx, agreed: "This won't make or break a business but it will be a useful marketing tool."

Mr Barnett, who is also an member of the council that will set the rules for .xxx domains, said it was "nice to have a new namespace. It is reminiscent of the '90s when you could still pick up decent domain names".

Mr Lawley said: "Porn is not going away, and doesn't want to operate in the shadows. This will change the face of the adult industry, it will become an increasingly accepted part of the fabric of the internet."

A unique source of embarrassment

While porn companies expressed mixed feelings over the approval of .xxx sites, the news was met with dismay by many outside the adult entertainment industry. This prompted ICM Registry to allow companies to block such sites associated with their names, the only domain to allow such a move.

ICM chief executive Stuart Lawley said the company was, "sensitive to non-industry brand owners who do not want their trademarks associated with adult content".

The "sunrise" period offers trademark owners' to apply to opt-out of the registry, "enabling businesses to be proactive in avoiding brand conflicts". The companies will still have to pay about $200 to cover the costs of removing their names.

Douglas Thomson, trademark attorney with the law firm Marks & Clerk, said cybersquatting – where others buy up names in the hope of selling them on or linking to other sites – was a problem across the web "but has the potential for uniquely embarrassing and damaging consequences in this case". He cautioned: "Nonetheless there is a danger that trademark owners could miss this opportunity. The only sure way to protect their brands cheaply is by blocking them from the .xxx domain."

ICM has already removed potential sites linked to celebrity names including beyonce.xxx, angelinajolie.xxx as well as political figures including Barack Obama and David Cameron.