Tech companies want marketable web addresses. These island nations are selling them.

Since 1974, well before the onset of the modern internet, an international standard has governed the assignment of two-letter identification codes to every country and territory on Earth. China got CN, Brazil got BR. The U.S., of course, got US.

When the internet came along, those two-letter codes were used in website domain names to signify where the owner of a website was based. But it didn’t take long before outside companies and organizations started using them too.

In fact, for years now, those companies have sometimes been willing to pay a premium to use certain suffixes.

Journalist Amy Thorpe has been writing about the profitable domain name marketplace for the website Rest of World. She told Marketplace’s Lily Jamali that common domain suffixes like “.ai” and “.tv” were created decades ago to identify small island societies. Now, those nations and territories are fueling their economies by selling their domain names to tech companies.

The following is an edited transcript of their conversation.

Amy Thorpe: These sites use something called a domain hack, which is pretty much a clever usage of a domain suffix usually added to create an extra level of meaning to a domain by spelling out a phrase or a word or a name. So Twitch, for example, isn’t actually operating out of Tuvalu, even though their domain name is www.twitch.tv.

Lily Jamali: And we should say Tuvalu is an island nation in the South Pacific that has that .tv domain suffix.

Thorpe: Yeah, exactly. Tuvalu was assigned .tv in 1995. A lot of people will use “tv,” instead of using it to signify a geographical link to Tuvalu, they’ll use it as a stand-in for the word “television.” That’s why Twitch has .tv in its name because it’s a video-based platform.

Jamali: A lot of organizations have taken advantage of that for years now. I’ve always wondered, how much money does Tuvalu actually make from its domain suffix?

Thorpe: Prior to 2011, it was making about $2 million a year with a contract with Verisign, which is a network infrastructure firm. In 2022, Tuvalu instead signed a contract with GoDaddy, which is a domain registrar, and it’s been estimated that now Tuvalu makes up to $10 million a year with GoDaddy, which is about a sixth of its [gross domestic product]. Twitch, I think, is one of the reasons why this increase in profits is happening because it’s part of this trend of the popularization of the .tv domain. Tuvalu has ultimately been able to use the profits from this lucky alternate meaning of its name to pave its roads, to expand electricity access for its residents and also to pay its first annual United Nations membership fee in 2000.

I think for Tuvalu, being able to assert the country’s presence online has been really important because its physical presence in the world is being threatened by rising sea levels. So, it’s been kind of a way to like, you know, get its nation’s name out there, even though a lot of people don’t even realize that they’re using a site linked to Tuvalu in the first place.

Jamali: Let’s talk about Anguilla, which is a British territory in the Caribbean and is another of these islands that seems to have gotten pretty lucky with its domain suffix. Its code is .ai. What did you learn about that?

Thorpe: As you may be able to guess, .ai is used by a lot of people and businesses as a stand-in for “artificial intelligence.” This domain suffix will be used by AI-based businesses and projects or blogs, for example. Thanks to this, the .ai domain brings in about $3 million a month for Anguilla, which is approximately one-third of the government’s monthly budget. And those profits increased a lot after the launch of ChatGPT in November 2022. Vincent Cate, who’s the president of DataHaven.Net Ltd., which handles accounting related to the .ai domain on behalf of the Anguillan government, predicts that profits could continue to increase as artificial intelligence gains prevalence.

Jamali: We have to talk about the .io suffix, which is another one we see a lot with these tech sites. But this one has something of a more controversial backstory, right?

Thorpe: Yeah, it does. So, .io is assigned to the Chagos islands or to the British Indian Ocean Territory, which is an archipelago south of India. And the associated domain hack that people use it for is “input/output” because that’s a common computing term. So, if you have a tech startup, for example, and you want to make it more marketable, then perhaps you go and use this as part of your domain.

In 1973, the U.K. deported the Chagos islands inhabitants to Mauritius and to the Seychelles to make way for a joint U.K.-U.S. military base, which is still there today. Currently, the profits from the .io domain are handled by a company called Internet Computer Bureau. The U.K. government has denied that they receive a cut of these profits. But meanwhile, the people of Chagos have been campaigning to financially benefit from the .io domain because they haven’t received any of the income from it despite it being linked to their native geographical territory. So, for instance, in 2021, the Chagos refugees group initiated a claim to receive a fair share of the .io profits. But as of today, the sovereignty of the Chagos islands and the question of who should receive the .io earnings are still disputed.

Jamali: That name Internet Computer Bureau, it sounds a little suspicious. It’s almost too generic.

Thorpe: Yeah, there’s been some back and forth, but pretty much the guy that is the president of Internet Computer Bureau, Paul Kane, he has claimed that the U.K. government does get a cut of the .io profits, whereas the U.K. has claimed they actually don’t. So there’s been some suspicion surrounding this company in particular.

Jamali: Makes you wonder where all that money is going. Is this practice of buying domain suffixes, which is pretty rife in the tech industry, a good thing from what you can tell?

Thorpe: I think overall, domain hacks, especially for small island states, have been a way for these places to kind of reappropriate digital borders to their financial benefit. And, as I said before, also kind of assert their country’s presence online, even though in some cases, their physical presence in the world is being encroached upon by climate change or by rising sea levels. So yeah, I feel like from a personal standpoint, I think it seems like it’s rather a positive phenomenon that’s helping assert these countries’ presence on the internet and also boosting their economies in one way or another.