The MediaWizard’s Blog | mwzd.com

In all this hype and hoopla of new gTLDs being proposed by ICANN one major issue was completely overshadowed - that of domain tasting. ICANN has addressed it in this meeting and measures recommended to prevent it from taking place.

Domain tasting is the practice of registering domain names and ‘tasting’ the traffic before registering or dropping them. This is mostly done by the bigger players in the industry like registrars and drop services though some registrars do allow registrants to take benefit from this policy.

It is estimated that at any given time 20 million domains are being tasted by various individuals and companies on the web. This is done by manipulating the AGP or additional grace period provided by ICANN. With this being put to a halt, the whole economy of the domain world will be given a jolt with the surfeit of names that will drop starting from the 1st of July 2008.

What ICANN has done is that its put a ceiling on the number of allowable deletions per registrar at a max of 50 or 10% of new registrations. And a fee of $0.20c on domains deleted above that. This will change two things - the economy of the domain tasting business - 20c x 20 million = 4million dollars, every five days, certain to put a dent. Another thing this will change is that tasting will go completely out of the hand of registrants into the hands of registrars, why would they want to share their 10% quota?

This is, all in all, a good thing for the internet and also for domainers who stay on the ethical side and do not indulge in this practice at all. Now if only ICANN could remove the 10% allowance too, it would level the playing field entirely.

GNSO Recommendation on Domain Tasting
Whereas, ICANN community stakeholders are increasingly concerned about domain tasting, which is the practice of using the add grace period (AGP) to register domain names in bulk in order to test their profitability.

Whereas, on 17 April 2008, the GNSO Council approved, by a Supermajority vote, a motion to prohibit any gTLD operator that has implemented an AGP from offering a refund for any domain name deleted during the AGP that exceeds 10% of its net new registrations in that month, or fifty domain names, whichever is greater.

Whereas, on 25 April 2008, the GNSO Council forwarded its formal “Report to the ICANN Board - Recommendation for Domain Tasting” which outlines the full text of the motion and the full context and procedural history of this proceeding.

Whereas, the Board is also considering the Proposed FY 09 Operating Plan and Budget which includes (at the encouragement of the GNSO Council) a proposal similar to the GNSO policy recommendation to expand the applicability of the ICANN transaction fee in order to limit domain tasting.

Resolved (2008.06.26.06), the Board adopts the GNSO policy recommendation on domain tasting, and directs staff to implement the policy following appropriate comment and notice periods on the implementation documents.

ICANN’s Paris conference has thrown up some interesting ideas and questions, chief among them has been the possibility of introducing thousands of new TLDs on a pay and play basis. This BBC News Story has the crux of the issue.

What they’re essentially saying is that anyone willing to fork out between $39,000 - $390,000 for a TLD could possibly buy their own! What this means is that if I had the money and the inclination - I could buy and promote .mwzd (not really, merely an example ) and Coke could get .coke and Ebay could get .ebay, ad nauseam.

My first reaction was probably what every developer thinks - “Wow, thats great! it will future proof the web for a trillion trillion trillion names, just like iPv6 is doing versus iPv4. You want a good domain name, get it in one of the new TLDs instead of springing millions for an aftermarket name.”

But when you see this from a domainers perspective - its a clarion call. Would domain values tumble? Will all extensions become worthless? What will happen to parking income? Who would buy our precious names? Will the aftermarket crash? What will we do? I’ll try and answer these questions based on my knowledge and experience.

1. Would domain values tumble?

Not that I can see, when there are too many players in any field, the 80:20 rule comes into effect. In advertising and marketing one of the first things you learn is the 80:20 rule - 20% of your clients will generate 80% of your business and vice versa. For your clients - 20% of their brands will generate 80% of their turnover, and vice versa. For the average individual - 20% of his investments will give 80% of the returns and vice versa.

That is why people try to get into the top 20% for any field - those are the guys who make 80% of the revenue, quite simple. Once in this league the company’s aim is to raise the bar so high that most people wouldn’t think of entering the field without substantial funding and experience, but then thats another blog post.

Which essentially means established TLDs will continue to do well in the near future… say for the next few generations at least. Till this generation and probably the next will have come and gone.

2. Will all extensions become worthless?

No. Simply launching a new extension does not guarantee success, much like launching a new brand of soap does not guarantee sales. After all brand value does count, a whole lot, thats what domainers have been saying all along. .Travel only increased the value of Travel.com or even Travel.mobi - why would it be otherwise?

.Com still has the most recall and probably will for the forseeable future, too many people have invested too much money in it for it to be otherwise. Likewise any other existing TLDs that have substantial development. All the other TLDs launched for the next 50 years, combined, probably would not match the investments various stakeholders have put into existing TLDs - its just simple economics really.

People will tell you ‘Oh, if thousands of TLDs are launched, .com will go up and .mobi will go down” - this is nothing but hogwash, it is best taken with pinch of salt. If .com continues to go up due to a global acceptance, so will the ccTLDs and other gTLDs like .mobi, .pro and even .travel over a brand new TLD.

3. What will happen to parking income?

Aside from the fact that parking income is its at its lowest and the smart money is already moving to development, parking as we know it is going to morph into instant development platforms.

Companies like WhyPark, GridParking, EVO, and even BANS are already showing the path forward, not to mention 100,000s of ‘white label affiliate sites’ floating around the internet. Even existing parking companies have realised content is king, without which you can just about kiss your long term traffic goodbye. Parked has a method to add content, Bodis does too… eventually all the others will as well.

4. Who would buy our domain names?

Domains are like real estate. Only the biggest players even bother owning their own. Restaurants lease the space because they make more money from selling food. The landlord rents it out because he makes more from multiple properties. Microsoft has its own facilities because it needs it due to the thousands of local employees who will permanently be located there.

The simile here is that while some people will launch their own TLDs as a viable business, an end user would always prefer a good domain in a known extension. He wants to make money from his venture, his primary motive will never be to popularise the TLD itself.

Its relatively easier to become a Domain Name Registrar today, however currently ICANN only lists about 944 Accredited Registrars. Not every domain owner or even portfolio holder is interested, or able to, launch their own registrar inspite of the fact that some companies hold hundreds of thousands of domain names.

5. Will the aftermarket crash?

Because of reasons outlined above, not at all. In fact I’ll go the other extreme and say - the aftermarket is going to be thriving like never before. Volumes and price points will continue to rise for those extensions that have already carved a niche for themselves in the popular mindscape.

Plus the aftermarket will grow exponentially in sheer numbers - more TLDs means more sales, maybe not in the short term, but eventually, as more and more of the ever increasing six plus billion inhabitants of the planet come online.

6. What will we do?

If you’re not developing, you’re already missing the boat. I would use “dead in the water” as a long term perspective of your portfolio. All the big guys have been saying this for the longest of times. They have also been busy going about doing exactly that with their portfolios. It not only generates a higher return short term, it also enhances the value of domains themselves.

Unknown to me, since I was somewhere between San Francisco and Icheon at the time, a deal went down on the 15th of May that will shape the future of the web considerably.

CBS acquired C|Net for $1.6 Billion. This deal is totally sweet if you ask a domainer, it includes domains such as TV.COM, News.com, Radio.com, Upload.com, Future.com, Chat.com, Com.com, Computers.com, Browser.com, Auctions.com, Builder.com, Events.com, Marketplace.com, Store.com, Tunes.com, Online.com, Gaming.com, Buying.com, Search.Com, Help.com, Downloads.com, MP3.Com and valuable web properties such as ZDNet.com, GameSpot.com, Chow.com among a few hundred others.

CBS already has an online distribution network that reaches 82% of all online audiences through over 300 web properties. This acquisition will make it one of the dominant players online competing with the likes of G!, Y! and MSN. Its truly an Web 2.0 defining moment, one that augurs the advent of the mega media conglomerates, again, but much smarter this time around.

Read more -

• Sahar has three blog posts about it, kind of underlines the importance of this.
• Washington Post
• SE Journal
• Ecommerce Times

Just back from a major vacation stateside. Promise a lot more goodies soon. For now - an Introduction to an exclusive Short Domain Marketplace for Domainers. Approval is only possible for people with 50 or more domains so it keeps it private.

The site is started by Reece Berg, who many of you know and read (check my blogroll for a link to his blog).

Ok, enough suspense - head on over to BQB.COM and signup (use ‘mwzd’ - without the quotes - as a ‘referrer’, might win me some brownie points and even their promo )

I’ve been watching the LLLL.com or four letter .com scenario, fairly closely, for the longest of times. I started using DomainTools (or whois.sc as it was known then) to harvest these lists for a while in 2006. In fact, thats what got me interested in domaining in the first place. Well that and the fact that our programs were churning out domains that were nice seo-wise but terrible viz brand value, but thats another story.

In the beginning, around middle of 2006, there were hundreds of LLLL.com available for hand regs, even then though, single words were gone, so were popular acronyms and even major country code + LL. You could still find gems but you didn’t see them as that then. I got a few time and again, some for projects, some for putting turnkey sites on to resell and some for a private collection. They were short, easy to remember and .com, sold pretty well with ready-to-go sites even then.

Towards the end of 2007 there was a rush of registrations, now people might argue here that monthly regs were only slightly higher, but fact of the matter is that they were going… fast. Sites came up with countdowns - most have since been turned into parked pages. There was a general rush of registering these, even the worst ones, since nobody wanted to ‘miss the gravy train’.

To be honest, the price hike at the beginning of 2008 took me completely by surprise and I dumped almost all my 4Ls then for $35-$300 each. People jumped head first into short domains, prices went ballistic. Propagators of this philosophy became the new messiahs (A few are in my blog roll* - Michael Goldman, Reece Berg, Richard, Yofie and Italian Dragon). Every word they spoke was treated as god’s own truth. Partially they were right. If you bought a crappy 4L.com in oct 2007 for $7, or reg fee as its popularly called, you could easily ‘flip’ them for $30 or so in bulk. Which basically meant you quadrupled your investment value in 4 months or so, unbelievable returns as any investment manager will tell you. [*Edit-k, I messed up here, forgot a few important names - which I've added now, very embarrassing, apologies to MG & Y]

Prices continued to rise, soaring to $60 ‘for the worst ones’ on any forum or sales venue till the middle of feb ‘08. Then came the pause, it sent prices for the worst ones came crashing down to more logical levels and those for the best ones went through the roof. This is where the conundrum actually comes in… What really makes a 4letter .com valuable? Why have the prices suddenly gone ballistic? Why are priced dropping in the reseller market? A lot has been said about this by various people, I’ll give you my take.

Short domain values are based on applicability. What is or is not premium is directly related to the applicability of that particular domain to a function, the more the applicability the higher the value. Domainers on the other hand love to talk about premium letters.

What are and what are not premium letters are not subject to random statistics or studies. A company using that particular combination of letters will find that domain premium, regardless of what domainers think.

This of course does not take into account pronounceable names - these are more valuable as brands as they can be easily branded and promoted. Thats why premium cvcv’s have gone through the roof. If a domain sounds cool and is brandable (eg. xegg.com), it has great value, specially with new companies and brands being launched everyday.

So a domain that might be valuable for one end user might not be for another and vice versa. They are not going to make any new ones, the ones that are there are getting scarcer and scarcer as they slip into large portfolio holders’ hands. The worst ones might be dipping in value now, but eventually even they will be worth something to someone.

This blog is now officially a CMS posing as a blog Its been upgraded to Wordpress 2.5, fitted out with a brand new theme and loaded up with the best plugins money can’t buy. Wordpress has finally come of age, its a cms now rather than just a blog platform. Its hundreds and thousands of contributors - plugin developers, theme developers and core team make it one of the finest pieces of code you can find.

Its slick, intuitive, extensible and really powerful under the hood if you want to load it up to performance levels, yet simple enough for the newcomer to start blogging almost instantly.

It allows you to add photos, videos, audio and other media at the snap of a button on its sleek visual editor. For the geeks an option to switch seamlessly to html view is inbuilt.

So now that my blog is completely up to date and cool enough, I thought i’d share info on what’s under the hood -

• CMS - Wordpress 2.5
• Plugins - Akismet, All in one SEO Pack, Share This, Subscribe Me, Viper’s Video Quicktags, WP Stats and the WP Auto Tagger.
• And presented using a smooth, cool and web 2.0 blog design from AskGraphics.

Thanks for all the hard work folks, you make this fun.