A vast expansion of the real estate on the Internet now underway designed to enhance choice and competition could in fact threaten the health of thousands of small businesses.
The Internet Corp. for Assigned Names and Numbers (ICANN) is in the process of authorizing thousands of new domain names, which means instead of naming a website with ".com" or ".net" at the end there are new tags like .guru, .dating, .sports and .wow.
(Read more: Hundreds of new domain names starting to hit Web)
As many as 1,400 of these new domains—called generic Top-Level Domains (gTLDs)— will become available over the next year or so. (Until recently there were only 22.)
Proponents of the domain expansion say it will help increase choice and competition, and will help new enterprises acquire website names more specifically tailored to their business.
But some industry experts say this dramatic increase in gTLDs may spur problems—like trademark infringement issues, cybercrime and cybersquatting—that smaller businesses may be ill-equipped to deal with.
"Until recently, there were only 22 of these top-level domains and there are more than 100 million secondary domain names just for .com. In this limited universe, there is already a lot of cybercrime, phishing and cybersquatting," said Dan Jaffe, the head of the Association of National Advertisers' government relations office in Washington.
"And when you dramatically expand the number of domains—if you increase it to as much as 1,000 or more—we have reason to be concerned that this is only going to continue to grow these problems."
Since there will be so many new top-level domains (which is the part of the Web address to the right of the dot, like .net) that become available, the number of second-level domains (the part of the Web address before the dot) will increase to an even greater degree.
This makes it easier for cybersquatters to buy a domain name that a legitimate business may want. It also opens the door for more cybercriminals to pose as an established website in order to steal user information. And while big corporations have the resources to deal with these kinds of problems, small businesses don't, experts say.