The MediaWizard’s Blog | mwzd.com

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.

Well tbh, I don’t subscribe to TLD bashing. Its a common enough pass time for trolls and others alike on most boards. Some people do it to downplay competition, some coz they want to push something else, some coz its just fashionable to kick something when its down. But a really small percentage do it for educating the sheep (aka followers) who’re being led down the garden path by people with vested interests (not to mention huge holdings) in a particular TLD.

Some of the hype and hoopla on some TLDs really hurts some new domainers and wannabe investors. Its the guys who put in the rent money or the kids college education fund in these domains who really lose the shirt off their backs at times. Because they buy as its ‘hot’ hoping to sell to some sucker who doesn’t know better. The problem is most of the times they’re the ’suckers’ and they don’t even know it.

Take .ASIA for example. (A few people asked my views on .asia, here they are)

Theres a mammoth scam going on at the moment. Some real smart businessmen have come out with the ultimate ponzi scheme. A legal way to rip people off. They realized they couldn’t get a leg up on .com or any other established TLD - so they created a nonsensical, non targetted, unusable extension for ’speculative’ purposes.

How its done:

• Build the hype.
• Reserve 10,000 or so top ones (the only ones to actually eventually make good ROI) to milk later for higher amounts through auctions.
• Get a few hundred suckers to buy the domains in large quantities or at least pre-order them
• Get another 1,000 sheep who’ll follow those suckers.
• Show about 50k names as ‘multiple registrants’ and send them to auction
• Add mysterious non-regs or predated regs to show ‘viability’
• I’m not even going to go in-depth on the on the ‘available domains’ that are suddenly not available, cancelled orders, rigging or sale of tms here, suffice to mention them.
• Then lead in the sheep for the slaughter. Sell them whatever you can, however you can. Leave them holding the bag, while they laugh all the way to the bank.

You have to give them something though, the execution is impeccable. Even mTLD looked like amateurs when it comes to comparison with dotAsia milking the extension. They’ve been slick, smart and licked the cream clear off before offering the cone to the gullible lot.

The whole logic of this extension is totally wrong:

• There is no Asia aside from the continent. Only americans and some Brits even call all the people from the subcontinent that. No local considers themselves as ‘Asian’… Chinese, yes; Indian, yes; Pakistani, yes; Russian, yes; Afghan, yes; Malay, yes; Phillipino, yes; Thai, yes. WTF is an Asian?
• Its as viable as .nsam would be - lets club americans, canadians, mexicans, columbians, brazilians and a few dozen other nationalities. Would it work? If your answer is no, why is it yes for .Asia?
• Since people living in Asia are so nationalistic (try clubbing Chinese and Japanese and you’ll know what I mean) what is the need for a separate TLD? The chances of an Asian Union or anything that resembles it are less than that of a snowball in hell.
• Almost 100% of the countries here have border or cultural disputes with their neighbouring countries, without resolution of that there is a certain degree of hostility between these and being clubbed together is not going to work.
• There is no single currency for this region, unlike for .eu, and we know what happened with that one also, same cycle - hype, hoopla, con and crash.
• There are very few ‘asia’ level companies, either they’re national or worldwide, I don’t see those who target only the continent. And even if there are a few, is a gTLD worth the effort?
• There are a lot of other TLDs that have gone down the same route, especially 4 letter extensions - .mobi, .info .name and of course .eu, .sc, .cc and even .us to some extent.
• Only about 7% of the names registered in total will ever be worthwhile and of those a large percentage are .com, followed by well known gTLDs (.net/.org) and some ccTLDs (.co.uk, .de, .in). .Asia comes up on the list last, if at all.

What’s even more amazing is that people are booking names in .asia where the .com is still available. Reality check - a domain does not become valuable just because you registered it. So good luck to .asia investors, I really hope you make a million with your names, but wouldn’t count on it.

A new bill currently seeking passage in the US senate is trying to surreptitiously change the face of the domain industry and extend American ‘ownership’ on the web. You and me stand to lose any domain we own, developed, undeveloped, tm-ed, non-tm-ed, geo and generic… I kid you not.

Be prepared to protect or lose your domain names, generics or any others, specially if they’re .com or .net as those are controlled by Verisign. The bill goes way beyond its brief… if it becomes law, a lot of small business will be hurt and badly.

As I understand it… if you own a developed domain with an international tm, yet an American company manages to get a tm or even uses the term as a ‘mark’… it can file a civil suit against you for the domain name - bypassing udrp and wipo completely.

Straight for the jugular… backed by the rich daddies at Cadna.org - A straight attempt at ‘reverse domain hijacking’ by the big companies themselves, trying to make a buck of the work of small investors and entrepreneurs worldwide.

Specially when you consider the title of the bill and then read the fine print.

Really hope that US representatives read before they vote, this could erode almost $10 billion of wealth from individuals and companies, mostly in the US. Not to mention huge losses of business for the pillars of the internet, registrars, developers, ad companies, service providers and even ISPs.

Foreign domainers / registrars are not exempt in the case of the two tlds under threat - .com and .net for the simple reason that the registry Verisign is a US corporation subject to US laws.

What can you do to fight it?

Join the ICA

Join the discussion at DNForum

Join the discussion at NamePros

Digg the article

Make people aware - We need lots of people to send letters to organizations, grassroots movements, and media making them aware of this issue. If we can get more organizations to pick up the fight the better chance we have of getting this bill revised or shot down entirely. (by NameCharger)

Here’s the meat of the story -

Another factor would be whether the person had offered to sell the domain name to any third party “without having used…the domain name in the bona fide offering of goods and services”, a provision that appears to be aimed directly at “parked” websites consisting solely of advertising links.

Again, despite the bill’s title, none of these trademark-related provisions contain any requirement that the domain name and website had actually been utilized to facilitate a criminal “phishing” scheme. They address essentially the same harms for which the UDRP and ACPA already provide remedies, but in a more expansive manner with the registrant at greater legal disadvantage and subject to harsher penalties.

In cases filed by the FTC, FCC, and state officials, cease and desist orders and injunctions could be obtained without any requirement to allege, much less prove, that the domain name registrant had actual or implied knowledge of likely misleading effect.

For those of you who’d rather do their own research -

Here’s the bill

And the ICA reaction

And an interesting article by dnw on the ramifications (read the comments too)

Here’s what C|Net has to say about it

And one more article

As the domaining world wakes up to the phenomenon, we have more reactions -

By John Levine at CircleID

TheDomains article explains with Enom’s ‘cuba’ domains example

Jaikumar Vijayan for ComputerWorld

The kind of letters you’d be receiving if this became law

A sad day for the internet if this gets passed as it is. Lets hope and pray not

There are a lot of factors that make a domain name really valuable.
Generic / Dictionary words command the highest premium.

But here is a list of 10 domain appraisal parameters which are really important :

10. Search Engine Friendly :
Would a search throw up the domain intrinsically.
For example - if the exact search term exists in the name.

9. Industry Strength :
Is this targeted to a niche or a mass market?
A niche market product might actually have a higher value than a mass market product.
But it basically depends on the prevailing PPC rates for that market.

8. Sales Value History :
Has this domain ever earned any revenues?
How long has it been online? Longer the duration of the registration, better it is.

7. Market Potential :
Can you make revenue by advertising this?
Would it generate enough revenues if exploited?

6. Linguistically Viable :
Can the domain be pronounced?
Is it easy on the ears?

5. Brand Recognition :
Can it be created for this domain?

4. Recall Value :
If you can’t remember it, forget it.

3. Length :
Shorter the better
Chew on this, there are NO 3 Letter .coms available.
All 3 letter word domains for .in, .org, .net, ,biz, info, .us,
in fact most TLDs, are also sold.

2. Extension :
.com, .net, .ca, .in, .co.uk, .co.in, .com.au, .tv, etc.
.com domains are undoubtedly the most expensive.
speciality extensions follow.
3 Letter .coms now go routinely for $50,000+

1. Current Revenue :
Earnings/Parking/Affiliate/Other
Nothing better than current income, though not if you are spending thousands to start with.

So is there a formula for this? Or an appraisal system that is perfect?
Short answer is NO.
There is no hard and fast rule, one man’s poison is another man’s drink.
A good way to gauge the inherent worth of a domain is to auction it or invite offers for it.

Holding on to certain types of domains actually increases their value,
others might just cause holes in your pocket.