.gap

18.1 Mission and Purpose of .GAP

The Gap, Inc. ("Gap Inc.") is a leading global retailer serving the needs of consumers around the world through its five brands - Gap, Banana Republic, Old Navy, Athleta, and Piperlime. Gap Inc. has 134,000 employees and stores or franchises in 31 different countries. Gap Inc.'s products are available for purchase online to consumers in over 90 countries, and Gap Inc. content is accessible in the .COM gTLD and the .CA, .CN, .EU, and .JP ccTLDs.

Through a unified corporate approach, Gap Inc. intends to submit five gTLD applications for the strings .GAP, .BANANAREPUBLIC, .OLDNAVY, .ATHLETA, and .PIPERLIME, collectively the Gap Inc. Family of gTLDs.

In 2011, Interbrand ranked the Gap brand as one of the top 100 brands in the world, with an estimated value of $4 billion. The preservation of this brand is of paramount importance to Gap Inc. in all aspects of its operations, including and especially on the Internet. Operating the brand as a gTLD is expected to be an important part of its digital strategy in the future.

Gap Inc. 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 most effectively serve and enhance Gap Inc.'s online strategy as a leading global retailer with operations in the following segments:

RETAIL STORES: Founded in 1969, Gap stores offer an extensive selection of classically styled, high quality, casual apparel at moderate price points. Products range from wardrobe basics such as denim, khakis, and T-shirts, to fashion apparel, accessories, and personal care products for men and women. In 1986, Gap brand entered the children's apparel market with the introduction of GapKids, and established BabyGap in 1989. These stores offer casual apparel and accessories in the tradition of Gap style and quality for children ages newborn through pre-teen. Gap brand also offers maternity apparel. In 1998, Gap brand launched GapBody, offering women's underwear, sleepwear, loungewear, and sports and active apparel. Gap brand operates stores in the United States, Canada, the United Kingdom, France, Ireland, Japan, China and Italy.

OUTLET STORES: Gap Inc. also operates Gap Outlet stores, which carry similar products at lower price points.

GAP ONLINE: In 1997, Gap Inc. introduced Gap Online, an online store found at Gap.com. Gap Online offers products comparable to those carried in the Gap, GapKids, BabyGap, and GapBody stores, as well as extended sizes not found in stores. Customers in Canada can shop online at GapCanada.ca, customers in the United Kingdom and select European countries can shop online at Gap.eu, customers in China can shop online at Gap.cn, and customers in select international countries can shop online at Gap.com.

The intended future mission and purpose of the .GAP gTLD is to serve as a trusted, hierarchical, and intuitive namespace provided by Gap Inc., its subsidiaries, partners and affiliates, for Gap brand customers and other consumers. Gap Inc. will be the entity to file this application and bring the .GAP gTLD to market.

Although ICANN has not specifically recognized a .BRAND gTLD specification in the current round, it is widely anticipated in the brand community that this will become a specialty subset of gTLDs. .GAP is intended to be one of those .BRAND gTLDs, with the goal of protecting Gap Inc.'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 Gap Inc.

Gap Inc. intends to initially limit registration and use of domain names within the .GAP gTLD to Gap Inc., its subsidiaries and qualified affiliates and strategic partners. This initial limited use will allow Gap Inc. to establish its operations and achieve full sustainability. After year three, Gap Inc. will evaluate whether opportunities exist to carry out the business strategy for the gTLD through expansion that continues the sustainable operations of the registry through fee-based registrations to parties other than Gap Inc., its subsidiaries, affiliates, and partners.

Gap Inc. currently plans a four-stage rollout for Gap Inc.'s gTLD(s):

1. Stage One

During the initial stage of implementation of the gTLD, Gap Inc. will register a limited number of .GAP second-level domain names. Gap Inc. will also perform testing to ensure seamless and secure access, interoperability with various software and Web-based applications, and unbroken and secure use of all names. This initial allocation will also allow the appropriate Gap Inc. staff to coordinate with the internal and external resources responsible for the application, delegation and setup phases of the .GAP gTLD to ensure a proper transition from delegation to full operation. Finally, Gap Inc. will develop its internal domain name strategy and begin allocating and using .GAP domain names for internal corporate use.

2. Stage Two

In the next stage, Gap Inc. will continue to allocate domain names in .GAP for more widespread internal corporate use and will begin evaluating strategies to migrate external Web traffic away from its current patchwork network of second-level domain names, which are registered in a variety of TLDs, to the Gap Inc. Family of gTLDs.

Gap Inc. will also evaluate expanding the operations of the gTLD to permit domain name registration by third parties such as licensees or other strategic partners. If approved, such expansion is expected to take place during Stage Three and would be conditioned upon a review of Specification 9 (Registry Code of Conduct) set forth in the Registry Agreement with ICANN to ensure compliance with Gap Inc.'s business model.

3. Stage Three

During the third stage, based upon the evaluation undertaken in Stage Two, Gap Inc. anticipates beginning to migrate Internet traffic away from the TLDs in which Gap Inc.'s domain names are currently registered, and toward the new Gap Inc. Family of gTLDs. It is in this stage that Gap Inc. also plans to extend registration rights to licensees and other strategic partners, as noted above.

Based on the company's analysis of its existing domain name portfolio and its planned use strategy, coupled with the fact that it will have full control over the number of registrations in the .GAP gTLD namespace, Gap Inc.'s business plan contemplates domain name registrations totaling well under 10,000 in the first five years of the .GAP gTLD's operation.

4. Stage Four

Based on its experience to date, including any expansion implemented in Stage Three, Gap Inc. will assess whether to further extend registration rights to a broader class of licensees, such as affiliates and customers of Gap Inc. It is anticipated that changes to the domain name industry, and particularly the full impact of .BRAND gTLDs, will take at least five years to come to fruition. Any decision to expand the .GAP gTLD beyond internal, licensee, and strategic partner use will take into account this industry experience as well as the strategic, operational, financial, and technical implications of expansion.

The potential use of the .GAP gTLD by these or other business segments will also be driven by Gap Inc.'s future business strategies as identified in its annual report and investor filings, see http://www.gapinc.com/content/gapinc/html/investors/fin_information.html.

Utilizing current projections based upon Gap Inc.'s existing businesses, future business plans, current domain name portfolio, and other strategic factors, Gap Inc. estimates second-level domain name registrations to be in line with the projections set forth in the financial template provided in the answer to Question 46 of this application.
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