Microsoft’s latest release of Internet Explorer will drive demand for internationalized domain names (IDN), according to industry experts who are predicting a sharp increase in sales of foreign language domain names. That’s because IE 7 has built-in support for IDNs, as does Firefox 2.0, also released in October.

Previous versions of Firefox and Opera Software browsers supported IDNs but ran into problems because they were susceptible to spoofing and phishing attacks through IDNs. The newest IDN-capable browsers have protection against these attacks.

IDNs allow foreign language characters, such as umlauts and accented vowels, to be used in domain names.

The Internet was designed to use English-language ASCII characters in domain names and e-mail addresses. Internet engineers and policy makers have been working for years to come up with a standard way of supporting foreign language characters without disrupting how the Internet’s domain name system works.

The arrival of browsers from Microsoft, Mozilla and others that offer built-in support for IDNs could open the floodgates to IDN sales and use.

"We’re looking to see what happens as Microsoft launches its new browser and makes it easier for IDNs," says Mike Denning, vice president and general manager of VeriSign Digital Brand Management Services. "Once it’s made easier to do IDNs natively in the browser, that’s when you’re going to see the IDN space really accelerate."

VeriSign says more than 600,000 IDNs have been registered in .com and .net, and that these names are "experiencing double-digit growth in new registrations and high renewal rates," according to its Domain Name Industry Brief published in August.

More than 75% of IDNs resolve to Web sites, according to VeriSign, which reports that 41 top-level domains such as .com, .net and .info support IDNs. The most popular IDNs are in country code top-level domains for Germany, Taiwan, China, Japan and Korea.

IDNs are popular with multinationals. For example, Bloomberg and Bertelsmann have bought derivations of their names in German that use foreign language characters with the .info domain.

Anticipating an uptick in IDN sales, Afilias announced last week that it is supporting eight additional language scripts for .info names. These scripts are Polish, Swedish, Danish, Hungarian, Icelandic, Latvian, Lithuanian and Korean.