Tokelau may only have 1,500 inhabitants and be a two-day boat trip from its nearest neighbour but selling its .TK domain is reaping benefits.

The Dutch entrepreneur who bought the address now offers a free domain name service in return for targeted ads.

The deal has allowed Tokelau to add 10% to its GDP as well as gain PCs and net access for residents.

ICANN doubt

When Joost Zuurbier, the founder of Dot TK, decided to invest in a country level domain name in 2001 he had a choice of four unregistered addresses including ones for Palestine, East Timor and Pitcairn.

The South Pacific .tk address was the most appealing but it was a long process to convince the overseer of the net's addressing system - the Internet Corporation for Assigned Names and Numbers (ICANN) - that they had a valid case.

"It was a four year process. They didn't believe the contract or even the island were real and it was only because a member of the board had been to Tokelau in 1978 that they finally agreed it was OK," explained Mr Zuurbier.

Now there are more than 1.6 million Dot TK domain names registered and it is adding around 10,000 each day. Registering a .TK domain is free although users must agree to receive targeted banner and text advertising.

The .TK domain generates 10% of Tokelau's wealth

Making a .TK website

For Tokelau the partnership with Dot TK has offered a new way of communication to a nation that had previously relied on expensive satellite telephony and, before 1994, radios to speak to each other.

Now many of the inhabitants use free voice-over IP telephony services.

"Telephone revenue has gone down by 40% because everyone is using Skype," said Aukusitino Vitale, the general manager of Tokelau's telecommunications company Teletok.

Teleconferencing

Tokelau used to have just 12 computers but now there are 200, in internet cafes, classrooms and hospitals.

The broadband connection - which is received via satellite as the ocean is too deep to lay under-water cable - is not the best at just 384 kilobits per second but it has opened up a whole new world for the islanders.

The tiny nation is in a remote part of the South Pacific

Currently net access is free although the government is considering charging as more bandwidth is consumed.

The hospitals are able to receive much-needed medical expertise from overseas doctors via e-mail and still photographs. There are plans to add video to this service.

The mayors of each island use teleconferencing to keep in touch.

There is also a project to connect islanders to the University of South Pacific which might mean inhabitants would not have to go overseas to study. With an estimated 8,000 islanders now living in New Zealand, Australia and the US, the issue of emigration is a serious one.

The group of three islands now also has a dedicated website, which allows family members living abroad to keep in what is happening back home.

"The website means news can be translated into their own language as well as giving exposure to our culture," said Mr Vitale.