A £20,000 grant to secure a "dot cym" internet address for Wales is to be given by the assembly government.
Deputy First Minister Ieuan Wyn Jones said the money was to support the DotCYM campaign for a Welsh version of the .com or co.uk endings.
He said it would "open up new marketing opportunities and help promote the Wales brand."
But a Cardiff Business School report said there was little evidence to show .cym would promote Welsh culture.
In its report in June 2007, it also said: "There is little evidence to suggest that a .cym domain will have substantial short-term economic benefit for Wales."
And CBI Wales said although .cym could be a useful tool for some the trend was towards using international web names.
Support for the bid is part of the One Wales agreement between Labour and Plaid Cymru.
The assembly government's funding, announced at the National Eisteddfod in Cardiff, will go towards putting together a bid to Icann, the international body which manages domain names.
In June it announced an extension of the system which will allow new domain names to be registered alongside the existing .com .co.uk and .org endings.
Mr Jones said: "This announcement reflects a more strategic approach to put Wales on the world map and enhance Welsh culture and identity on the worldwide web."
DotCYM was set up to campaign for a Welsh domain name and claims the support of businesses, local authorities and public bodies.
Campaign chief executive Siôn Jobbins said: "The internet is the e-engine for economic growth and Wales needs top level access to deliver the innovation that we need."
"The internet is about to change radically and Wales must be fully on board the new internet with a top level domain identity .cym, on a par with other economically-growing communities."
But the insurance company Admiral, the only Welsh group listed on the FTSE 100 index, said it was worried a .cym ending could cause confusion to its customers.
Justin Beddows, a spokesman for the company said: "Most of our customers come from London, the south east and Scotland but for tourist companies it's a great idea."
David Rosser, the director of the business organisation CBI Wales welcomed the extra choice a new name would give businesses.
"I think it offers another option for businesses to consider which is never a bad thing," he said.
"For companies for which Welshness is a key part of their proposition to their customers it maybe a useful marketing tool."
But he added: "The trend is probably towards globalisation and the removal of local domain names. There are more companies opting for .com rather than .co.uk."