This is going to sound ignorant, but can somebody tell me the reason for TLDs in the first place? I understand they originally were supposed to segregate the internet into governmental, commercial, organizational, etc spaces. But no restrictions were placed at all on who got what, so we ended up with whitehouse.com being porn.
So who benefits from yahoo having to buy yahoo.com, yahoo.net, yahoo.org, etc, instead of buying one domain called "yahoo"? It all just seems like a price gouging scheme at this point.
Here are 3 reasons for gTLDs that come to mind. (I'm late to the scene, and there are plenty of pioneers around who can provide a better answer):
1: Without some sort of naming convention websites would be a string of numbers. This was what the one we ended up with, and we are all used to it now.
2: The TLDs provide the first port of call for looking up a url. Thus the .com DNS server needs to know al the .coms, but that is it. the 2LD servers likewise have to deal in their area only. That's a lot easier than storing and refreshing the entire authorized internet DNS lookup at all points. (I'm getting out of my depth here, but there is some pretty clever stuff going on these days)
3: As you say the TLDs provide basic 'segregation' and while .net and .com use cases seem to have merged, .gov, .mil and beyond that country ccTLDs such as .uk, .nz and .au are all performing important roles for now and for a long time going forward.
Meanwhile there are 7 billion people, and goodness knows how many businesses in the world, and many of them have similar names. Different TLDs and 2LDs give them a chance to coexist.
Yahoo and other giant corporations are a bit different as they are truly global and need to buy up all domains, but most companies are not interested in every last TLD.
The money made from the gTLD and 2LDs goes towards supporting the DNS system, which is what makes the internet work, SOPA notwithstanding.
I am actually involved, right now, with securing a couple .xxx domains for a client. Although not an adult product, the client wants to protect their product name from being associated with adult content.
For the record, my client is happy to pay the large (compared to normal domain registrations) fee to keep their .xxx from resolving.
There is no point to a .xxx TLD. Its sole purpose is to extract wealth from an existing pool rather than create value. This is the textbook definition of rent-seeking.
If I were ucla.edu I wouldn't be too worried about it since ucla.xxx isn't a threat to me. On the other hand if I were the owner of hotmangoatporn.com then I'd be annoyed, since hotmangoatporn.xxx is a threat to me, and I'm now obliged to go and buy it because people could quite reasonably get my existing site confused with whatever shows up on the .xxx version.
First time learning of this. I am not concerned with the possibility of my domains being maliciously duplicated on .xxx by someone else; if this becomes a serious problem, I have little doubt Google et al will take care of it in the search returns.
Different TLDs have different values. I'm more likely to trust a site with a .edu TLD than .tk or .info. Google also uses TLDs in their search rankings.
I'm not saying .xxx will have value, just that not all TLDs are made equally.
So who benefits from yahoo having to buy yahoo.com, yahoo.net, yahoo.org, etc, instead of buying one domain called "yahoo"? It all just seems like a price gouging scheme at this point.