Mattel Inc. (“Mattel”) is a global leader engaged in the development, manufacture, and sale of toy-related products, with approximately 28,000 employees and operations in numerous countries. In 2011, Mattel had net sales of over $6.2 billion with $3.1 billion in gross profit, and its common stock is traded on NASDAQ under the symbol MAT. Headquartered in El Segundo, California, Mattel has customers all across the globe and has a strong international presence. In 2011, Mattel’s international segment revenue represented 48 percent of its consolidated gross sales. Mattel’s products can be purchased worldwide and its content is accessible in the .COM gTLD and also in multiple ccTLDs, including .BR, .CA, .CL, .CN, .DE, and. JP. In order to apply for the .MATTEL gTLD, Mattel has decided to use an existing subsidiary, Mattel Sites, Inc. (“Mattel Sites”) as the entity to file this application and bring the .MATTEL gTLD to market.
Mattel will be analyzing and evaluating other .BRAND gTLD applications, as well as general market adoption, to determine short- and long-term potential best-in-class use case options to more effectively serve and enhance Mattel’s online strategy. Mattel has three global operating segments, identified as: Mattel Girls & Boys Brands, Fisher-Price Brands, and American Girl Brands. These individual segments develop, manufacture, and sell world-famous branded products, games, and puzzles.
The potential use of the .MATTEL gTLD by these or other business segments will also be driven by Mattel’s future business strategies, as identified in its annual report and investor filings, see http:⁄⁄investor.shareholder.com⁄mattel⁄.
The intended future mission and purpose of the .MATTEL gTLD is to serve as a trusted, hierarchical, and intuitive namespace provided by Mattel and its qualified subsidiaries and affiliates for its consumers. Mattel Sites is committed to moving forward with the .MATTEL gTLD application; however, at the time of filing this application, there has not been enough time, and currently there is not enough market information available, to fully analyze and evaluate all potential use case options.
Although ICANN has not specifically recognized a .BRAND gTLD specification in the current version of the Applicant Guidebook, it is widely anticipated within the brand-owner community that this will become a specialty subset of new gTLDs. The .MATTEL gTLD is planned as a branded gTLD, with the goal of protecting Mattel’s online presence and identity, expanding its marketing and promotion efforts, providing a secure channel for online products and services, and offering a platform through which to consolidate many of the intellectual property activities of Mattel.
Mattel Sites intends to initially limit registration and use of domain names within the .MATTEL gTLD to Mattel and its qualified subsidiaries and affiliates. This initial limited use will allow Mattel Sites to establish its operations and achieve full sustainability. This limited distribution coupled with the other requirements set forth in Specification 9 of the template Registry Agreement is intended to exempt Mattel Sites from ICANN’s annual Code of Conduct Compliance requirements.
After Stage 3 (see below), Mattel will evaluate whether opportunities exist to carry out the business strategy for the .MATTEL gTLD through expansion that continues the sustainable operations of the registry through fee-based registrations to parties other than Mattel and its qualified subsidiaries and affiliates.
Mattel Sites currently plans a four-stage rollout for the .MATTEL gTLD. The dates of the following stages are subject to change depending upon business, strategic, and industry factors at the time.
The initial stage of implementation of the gTLD will involve Mattel registering a limited number of .MATTEL second-level domain names.
This initial use will provide Mattel’s IT and security personnel the time to run a number of tests to ensure seamless and secure access using the .MATTEL gTLD domain names, interoperability with various software and Web-based applications, and unbroken and secure use of all names. This initial allocation will also allow the appropriate Mattel staff to coordinate with the internal and external staff responsible for the delegation and setup phases of the .MATTEL gTLD to ensure a proper transition from delegation to full operation.
Once all testing has been successfully completed, Mattel will begin allocating domain names in .MATTEL for more widespread internal corporate use. During this same period of time, Mattel will begin evaluating strategies to potentially migrate traffic away from its current patchwork network of second-level domain names, which are registered in a variety of TLDs, to the .MATTEL gTLD.
It is in Stage 2 that Mattel will evaluate expanding the operations of the gTLD to permit registration by other registrants, such as licensees and⁄or strategic partners. Should an assessment of its expansion strategy lead to a decision to extend registration rights to other parties, this expansion is currently planned to take place during Stage 3. However, any expansion would be conditioned upon a review of the Specification 9 (Registry Code of Conduct) set forth in the template Registry Agreement to ensure compliance with Mattel’s business model.
Depending on the analysis of the evaluations undertaken in Stage 2, Mattel Sites may implement the permanent migration of Internet traffic away from the TLDs in which Mattel’s domain names are currently registered, and toward the .MATTEL gTLD. It is in this stage that Mattel Sites also may implement Mattel’s decision to extend registration rights to licensees or strategic parties, depending upon compliance with Specification 9 as noted above.
After consideration of the following factors: analysis of Mattel’s existing domain name portfolio; internal analysis of marketing initiatives; and the fact that Mattel will have full control over the number of registrations in the .MATTEL gTLD namespace, Mattel Sites is confident that the number of domain name registrations will be less than 10,000 in the first five years of operation.
Based on its experience to the end of Year 5, and based on its experience with any expansion implemented in Stage 3, Mattel will assess whether its business plan and expansion strategy should be augmented by extending registration rights to a broader class of licensees, including potential customers of Mattel. It is anticipated by Mattel that changes to the domain name industry, and particularly the impact of .BRAND gTLDs, will take at least five years to be realized and assessed. Any decision to expand the gTLD beyond corporate, qualified subsidiary and affiliate, and licensee use will take into account this experience as well as the technical analysis of potential expansion.
Utilizing current projections based upon Mattel’s existing businesses, future business plans, current domain name portfolio, and other strategic factors, Mattel estimates second-level domain name registrations to be in line with the projections set forth in the financial template provided in response to Question 46 of this application.