I didn’t write much leading up to the Verisign (VRSN) acquisition of .Web for $135 Million this week, but I have plenty of thoughts on the subject.
First and foremost it’s a no brainier for Verisign
Forget the $1.9 Billion they have sitting in the bank and focus in on the over $9 Billion dollar valuation the company has which went up over 3% on Friday. This more than made up for the investment in .web.
Since the announcement of the new gTLD program, It has been my contention that .Web has been the only possible new gTLD that could possibly threaten the original Top Level Domain’s market share; .com, .net and.org.
That is not to say that other extensions don’t have value or a market but not the broad appeal that .web has.
So if you were Verisign and could only get one new gTLD, .web would be the one to get.
I would argue Verisign getting .web (which they did not apply for), was simply a brilliant move, I would argue that if they did not get the extension it would have been gross negligence on their part.
As far as the cost of the extension to win .web, it’s really peanuts to Verisign, $100 Million, $135 million, $150 Million or $200 Million, really what is the difference to Verisign?
It could be argued the purchase price was cheap compared to Neustar’s acquisition of .Co two years ago for $109 Million when it only had 1.6 million registrations.
.info has over 5.5 million registrations and there have been over 4 million .info registrations each year for the last 10 years (with a high of almost 8 million).
At $8 wholesale that’s a cool $40 Million a year, Verisign has all the infrastructure in place so most of the income will fall right to the bottom line.
Verisign already has a profit margin of over 61%, pretty incredible for a public company.
The second interesting issue is who was the second highest bidder?
The ICANN auction, which lasted more than a day, was a step auction, which means one or more other applicants were bidding along with Verisign and drove them up to the $135 Million price.
Who was the 2nd place applicant?
What was the business model for the 2nd and 3rd place finisher in the auction? It’s a good bet the business model was a far cry from Verisign’s business model.
Consider that Web.com has a market cap that is less than $900 million, how could they spend $200 Million for one new gTLD extension ?
Donuts offered just $70 Million for all of Rightside’s (NAME) strings, at the time they had already launched 40 of them.
The third interesting issue is how high would Verisign have gone to secure the extension if pushed higher by other bidders ?
I think there was no way that Verisign was going to lose .web. No one could afford it like Verisign; no one needed it like Verisign.
For domain investors who participate in domain name auctions, its common to have losers remorse.
“Hell I lost that auction at $1,100, maybe I should have bid $1,200 and would have won the domain.”
Well IMHO there is no way Verisign was going to lose this auction, and no one else could pay as much as them except for Google. That said .Web has much greater significance for Verisign than it does for Google.
The 4th issue is now what is Rightside (NAME) worth?
Donuts offered $70 Million for all of the strings owned and operated by Rightside which at the time had launched 40 new gTLD’s and had around 550,000 paid registrations, many with premium renewal fees.
Now with Verisign paying $135 Million for one unlaunched string, what does that make Rightside’s new gTLD business worth?
At the time of Donuts offer, I predicted the $70 Million dollars would be rejected.
As of Friday’s close, Rightside has a market cap of $230 million, but that includes not just the new gTLD strings, but the operation of the back-end for its owned and operated strings, and providing the back-end for all of Donuts owned strings which totals over 2.3 million domains.
Rightside also owns Enom, the 2nd largest registrar in the world, they also own Name.com and 1/2 of Namejet.com among other assets.
It seems Verisign paying $135 million for just one string arguably makes Rightside shares look cheap at its close on Friday at $12 a share.
For .com domain investors my guess is that Verisign’s acquisition of .web is the best thing they could have hoped for, Verisign’s .web acquisition is more defensive and another company could have gone after .com aggressively with .Web. Only time will tell.
Will Verisign price .web domains with a premium renewal or not?
We might expect Verisign to use .web to make a play quite different from their contractually obligated pricing of .com and .net. They may roll out premium pricing for registrations and renewals which at the moment they can’t do with .com’s and .net’s
On the other hand Verisign could just basically give away .web addresses as part of a .com/.net/.tv registration package.
In the domain space remember life is long and most of those investing in the new G’s did it for a long-term play (5 years +).
However lets not lose sight of the fact there are just over 23 million new gTLD’s registered, some at great discounted pricing of $1 or under.
All of the new gTLD’s still don’t exceed the number of .net and .org registrations, not to mention .info and .biz.
So .web while it has a ton of potential, lets not forget that Verisign hasn’t exactly set the world on fire with .cc or .tv.
Speaking about .tv my guess is that’s the way that Verisign might price the “premium domains.” A one time premium charge and normal renewal fees, we will just have to see how it plays out.
Verisign has a lot of options of what to do with .web.
Finally what does the $135 Million acquisition of .web mean for future rounds of new gTLD’s?
Combined with .Shop $40+ million auction, Google’s acquisition of .app for $25 Million; the next round of new gTLD’s will not go unnoticed.
As someone who was out on the road telling Fortune 5000 companies about the coming new gTLD opportunity years ago, I was met mostly with rejection. Basically there was no interest, the next round will be an easy sale, especially if the price falls significantly from the $185,000 application fee. You may see 10,000 or more applications submitted next round.
At that point you can make many arguments how it will affect the domain name aftermarket.
It just maybe become a hot mess where most companies that can afford it will go with a .com or a relevant ccTLD. Startups and smaller businesses will operate on a lower priced domain looking to upgrade to a .com when they get funded.
In any event I did tell readers 5+ years ago I had no idea of how the new gTLD’s would affect the domain market and industry at the time. I did however emphasize they were coming and everyone needed to pay attention to it.
I think on that front my thinking was not wrong.
Michael-nice article but $Name is about to retest the $9 area without a buyout offer. All indicators are pointing to a real pullback on this name right here in this $12 area. Of course any major buyout offer makes all that mute. We’ll see.
I hope you are right. I’m planning to more than double my position!
I think, VERISIGN’s reason to get .web was that they are frustrated about the fact that they are not managing the .top which is clearly the smartest TLD.
So they paid $135 million to get at least the 2nd smartest TLD.
But, like any other TLD, also .web will not be able to top .top in the LONG RUN.
Please stop trolling on forums and blogs!
Please stop reading my opinions if you can’t handle your disagreement and don’t insinuate me ‘trolling’ ok!?
“On the other hand Verisign could just basically give away .web addresses as part of a .com/.net/.tv registration package.”
–ooch ..shades of the dot info promotions 15 years ago where I demanded enom cancel all the “FREE” reservations they “GAVE ME” without asking me that complemented all my dot coms ?
If dot web can generate $50 collectively for each domain over 4 years (such as $12 a year) – that means the gross revenue (not including cost of operation) of 2.7 million dot web domains would recover the $135MM investment.
Verisign has done its math – and my guess they are on the high end of expectations considering they are spending innocent share holder money.
Point being is I do not see an overly rosy picture – but to paraphrase Michael – who cares – its piss money to verisign
Bri
John
I don’t want to litigate the case for rightside stock in this post but since the $70 Million dollar offer was rejected the stock moved and has stayed significantly higher
http://finance.yahoo.com/news/rightside-group-name-focus-stock-122512201.html
I don’t see what you are seeing
Hi Mike we’ll revisit it in 60days if there’s no other buyout offer. As I mentioned I’m looking for this stock to back up to $9ish but time will tell. Happy Sunday!
I’m also hoping (and, kinda foresee) the NAME stock falling down to $8 – $9, so my open orders at that level could be executed. Then the stock can then continue to rise back up afterwards.
The NAME stock has lots of potentials, but not without its ups and downs, depending on how the market moves. Also, considering the fact Donuts may one day replace Rightside as its sole registry backend provider.
RSI MACD MFI all topping right here on this name. $9 is on the way without a buyout.
On the monthly view the Gap has been filled at $12, next stop $16.
Support is $10 which is at the 50 day ma on the Daily chart.
Very interesting analysis. I had not put much thought into it, other than that this deal probably make .web a lot more popular, so I am glad you pointed all that out.
Michael’s thoughts are Informative, analytical and insightful. But yes, it will be interesting to see in the coming days how Verisign will play out this advantage. .Com players will have a sound sleep, I guess, at least for a few more years.
i must be the only one who don’t like.web
.net .site .website do i need to see this to tell me i am on a website.or on the web.
Agree. If it has a dot and a _recognizable_ extension it is a domain name and a website address. Example: google.com. I know I can open chrome and go to google.com, I know I can email someone if I know their username by entering user@google.com in the address box, I know I can use whois to see more about the domain. The syntax of the address identifies most resources on the Internet as to what type of resource it is and how the consumer can use it.
Facebook, twitter, etc have muddled this slightly. They try to promote @therealdonaldtrump as a genuine resource locator, but it only works on twitter. The usefulness of a domain is not tied to any one service or company.
I can’t see why there is any need for google.web or wiki.web. It is possible that if it becomes a recognizable domain name extension, some words that can legitimately have two users like “Apple” for Apple computer and Apple records could get a .web when their .com was taken, but that is pretty rare and easily solvable by adding letters to the .com
“I would argue Verisign getting .web (which they did not apply for) was simply a brilliant move and I would argue that if they did not get the extension it would have been gross negligence on their part.”
Agree completely.
“I think there was no way that Verisign was going to lose .web; no one could afford it like Verisign..”
what about Google?
Whoelse would spend that much for a new string, in a new unproven market, if they don’t already have the infrastructure and connection to make it successful?
Assuming I was Google, believe I would know or atlest suspect a company and a partner like Verisign, would be the underdog bidder at $130M. Accept defeat they have better experience, infrastructure and connection to make it successful, faster and better. This play is not really a money issue on Google’s part IMO.
However, Verisign have not always been successful with all its TLD registry business. The .name TLD it acquired 2008 is a failure, and is no longer carried by many registrars.
Great strategy by Verisign in using NDC as a “Trojan Horse” to capture and control .web.
A lot of speculation swirling that Versign may just warehouse or “bury” .web. I don’t think so. I believe it’s a viable extension.
Let’s see how it all plays out.
First and foremost, great piece by Mr. Berkens on .WEB.
So many (varying) opinions has been published about Verisign’s new dotWEB TLD. I agree, this is most likely a defensive move by Verisign.
“I would argue Verisign getting .web (which they did not apply for) was simply a brilliant move and I would argue that if they did not get the extension it would have been gross negligence on their part.”
Imagine what someone like Negari would do with .WEB ? He would aggressively market it as the killer of .COM as he did with .XYZ, and even won a case over Verisign offer such ridiculous claims.
So this is clearly a defensive move on Verisign’s part, not that dotWEB has any chance of overthrowing the .COM king.
I just hope Verisign will not join other new registry startups in charging ridiculously high registration fees, not reserve every darn good names, but rather make getting dotWEB affordable at under $20 across all partnering registrars.
I was calling for Verisign to win .web here the other day first. 🙂
I hope they take the high road and offer “regular” reg fees, no premiums, and relative equality of opportunity for all in the release such as how it was done for .us, .info, .biz, etc. I realize it may be a lot to hope for, but you never know, and I think it would probably earn them a lot of points and good will.
Since it seems you are already wealthy enough probably for the rest of your life, Michael, (sorry, I’m calling it) and everything else is just gravy on top, and since the companies were mentioned here so prominently, I am also going to call attention to this material relating to issues and “concerns” about Namejet going back years involving numerous people, and let’s see if you even allow my post to remain up here: 🙂
http://www.domainsherpa.com/matt-overman-namejet-interview/#comment-4690568
Also, in case anyone has forgotten, since it seems that’s exactly what most of the “media” wants for this one, I would just remind people that this is still looming over the world too:
“Obama’s Surrenders Control of the Internet”
http://www.newsmax.com/BradleyBlakeman/obama-internet/2016/07/31/id/741413/
And here below in a separate post are the live links for the above, which I expect will go into moderation before appearing if they are allowed to appear at all:
P.S. And as I’ve indicated elsewhere before, I’m not the “John” who posted over at DomainSherpa regarding Namejet at the url above (also not the other “John” who posted above here).
I see this live url showed up after moderation, but not the newsmax link that was with it. My feelings are hurt, and it makes me wonder if you really support the “transition” after all, though I had the impression you were opposed to it before, Michael. Hmm.
Not brilliant enough to apply themselves.
Could the winning bidder rep have bridge financed it and tacked on $50 million?
Under bidders could have pooled.
While I get that .Web could potentially be prime cyber real estate and also has the potential to contend with .Net, .org, etc. It just feels like it may appeal more to the personal site developer and less to the big commercial developers. If anything, I think it could potentially (at some point) fit side by side with .Net (Net / Web), but I don’t think it will ever come close to .com. However, saying it might fit next to .net is probably giving it way too much credit already. I’ll have to keep my finger on the pulse of this one to see where it goes from here.
If you had to enter a credit card into a domain other than .com, .Web might be the next safest choice.
.Web sort of comes standard with a better shot of gaining consumer trust with payment information right off the bat.
It may be a smart move on the part of Verisign. I hope it will contribute to enhancing public awareness of the new GTLDS in general.
See my comment in the new post below.
I agree with the comment above that said that this will kill all of the other gtlds besides .com, .net., .org and .web. A new space will be opened up that solves the naming problem, for now anyways, and fixes the problem caused by the silly new gtlds that never were really well received from the start. Hard to feel bad for them and their registrants, though. Seemed kinda obvious from day 1 that they were rather stupid and going to fail.
Michael,
Very Nice Analysis .. but what is your Conclusion? same as 5 years ago?
Brilliant move by Verisign for sure…
Web.. Blog…CDs…WWW… MTV …etc etc
All sound so “Last Century” (literally…) so passé! https://youtu.be/xDHS0W9DRYw?t=47
In the meantime there is 551,194 either on Pending Delete or Redemption Status…
https://ntldstats.com/ the curve has inverted….
New gtLDs
No Re-seller Market (NONE)
Mainstream unaware of them
Madison Avenue advices against them
Startups ignore them…
No SEO advantage
Keep on drinking the Pink Lemonade….
@Schilling: “.Com Will Become Like AM Radio” … my Arse…
3 years and counting.
Wow- I had forgotten that Schilling had actually said that!!! OMG! That’s a good one!!!! And what about the argument promoting westward expansion! (Not everyone can live in Manhattan!) Or, that video killed the radio! Or, that the VCR was replaced by the CD and DVD. All cutesy fails.!!! I suspect you will be able to count on .COM as King for a lot higher than 3 years, Domo.
A few observations after reading comments on here (in no particular order);
– perhaps V$ will just shelve .web and never launch it, why do they need to?
– Agree with Mike that the next round will be in the 10 of 1,000’s.
– Domain Observer says “It may be a smart move on the part of Verisign. I hope it will contribute to enhancing public awareness of the new GTLDS in general.” – I am not sure V$ wants to raise the profile of new gTLDs do they? They certainly haven’t been a champion of them previously (with good reason).
– As far as the comment from Potential Domain Names “I just hope Verisign will not join other new registry startups in charging ridiculously high registration fees, not reserve every darn good names, but rather make getting dotWEB affordable at under $20 across all partnering registrars” – When will Domainers start accepting that Registry Operators are in no way obligated to prop up the Domainer business model. Your model is outdated and if Registry Operators want to retain some of the profits you have been making at the registry they are entitled to do so. Enough already. Evolve.
Enough already ? first off you should’ve had the ethics to disclose that you work for a registry provider,secondly who the fuck are you to tell anybody to evolve.
The registry operators who act as greedy whores will take it straight up the poop chute. Some already are. Anyone calling the new g program successful at this point needs to evolve. Or see a psychiatrist. Maybe registries should evolve and stop trying to use domain owners and shakedown big companies for ip protection.
Go find some real businesses to use these extensions.
Ethics disclosure? At least I don’t hide behind a pseudonym you gutless prick.
Good luck with your failing business and congrats on being the poster child for this part of the industry.
A gutless prick doesn’t disclose their business agenda.
My business is not failing, I don’t make a living from domains just easy extra cash.
Congrats on being the poster child for greedy registrar operators.
It’s a “registry operator” you bright spark…
So somewhere along the line in this discussion someone suggested verisign bought dot web to kill it and never use it?
that would be right in line with giving it away with a dot com, net.. purchase…as Michael suggested – and would have the same affect – without getting in trouble with shareholders over killing it outright – i.e. a defensive purchase…
My thoughts:
Verisign could do any of the following:
1) Lock .web up in the basement and keep t away from the GTLD registries
2) Position .web as a play in the IOT space
3) Buy a .com, and get the .web for a special price
4) Make deals with the big registrars such that when the .com isn’t available, the .web pops up (instead of other GTLD extensions)
5) Create a value proposition for .web and give brand s their .web
6) 2,3, 4, 5
Verisign & NDC already won.
GTLD registries and owners of domains n these extensions can spin it however they wish.
Google didn’t need this. It already locked up an extension .app that it deemed a potential threat to its business model.
Donuts filed a lawsuit after it gathered there was a “backer” of NDC for .web. Is that suit still active? If so, I’d expect, at least, it will get some settlement, or maybe not? Verisgn seems to be quite comfortable litigating rather than settling.
Big time win for Verisgn & DNC.
As I’ve mentioned, I think the niche extensions (,bank, .,blog, .club, .cloud, insurance. etc )should be fine.
Would you rather have insurance.web or insurance.top? doctors.web or doctors..xyz? payment.web or payment.today, payment.online, payment download?
Well, with Verisgn controlling .web, the chances of its owner going bankrupt or getting acquired on the cheap is not likely.
So, is this the beginning of the end for many GTLDs?
“Look, ma, top a the world!” (Booooooooooomm)
I don’t know. I’m not that smart.
In answer to your question, yes, it is the end of the line for the other gtlds. They have been an unnecessary distraction in the overall name space. For a while, it looked like the concept may have caught on, but then sales fizzled. And fizzled. And fizzled some more. Oh, other than to registry insiders who have purchased them in bulk to make it appear as if they are moving off the shelves. And the general public was never educated as to their existence. Nor, did they seem to care. They only wanted .com. And companies too continued to insist solely on .com while casting doubt and uncertainty on newcomers using a new gtld. Singular, plural and multi-lingual synonyms. Lots of them. Lots of failed email scripts too. Traffic lost by the bucketfulls. All this while new gtld’s premium prices kept going up making .com’s more and more attractive. Poor planning, poor conception, poor rollout, and overall poor product. Thank you, Verisign, for putting them out of their misery.
When a company gets so much power and money to bury their competitors to be a sole provider of a good or service, then it is a monopoly. The whole idea is to allow fair business to those less affluent to be able to compete on equal grounds, but with this move, it proved that ICANN literally only opened this floodgate of new gTLDs for their own pocket money and absolutely nothing else, even worse, they openly allowed the practice of monopoly which most probably wouldn’t be allowed under normal government regulation procedures.
Let me be clear, Verisign despises the new gTLDs because even if all the .COM investors in the world deny it, they deemed it as a threat to some extent. It became abundantly clear when they sued .XYZ for a laughable reason, and Verisign hasn’t stopped badmouthing the new gTLDs since the very beginning up until this point.
Now that’s all fine really, because Verisign had vested interest in their long established gTLDs, and they now had to face competition, but things became really ugly with this particular auction, because for one, Verisign ensured that a private auction wouldn’t happen, meaning no money would be distributed amongst the new gTLD operators, making nearly all of them poorer in the process (which equals less money for promoting, acquiring, and marketing new gTLDs).
And on top of that, they have ensured no one else would get the absolute best ‘generic’ new gTLD in the process, simply because they have the financial might to do so. The sole reason there are regulations in place is to stop a dominant powerhouse from having the ability to stomp newcomers simply because they have the power and finance to do so, this is exactly why in 2011 when AT&T wanted to purchase T-Mobile, the regulators said no to the deal on the basis that if second- and fourth-largest wireless carriers in America became one company, it would “substantially lessen competition”.
Right now what we have here is that the sole operator of the first, second, and third largest gTLDs has been given the ability to operate the fourth biggest gTLD. If that’s not a monopoly, then monopoly simply doesn’t exist.
Oh and the argument that there are hundreds of other new gTLDs is a moot one, why? Well because you’d have to be an idiot to think that .best and .web are of the same quality. Verisign getting ahold of .best would be akin to AT&T purchasing the 216th wireless mobile operator in the US, and the regulators wouldn’t even bat an eye on it. Everybody knows not all TLDs have the same potential and value, so let’s not fool ourselves and pretend that they do.
At this stage, Verisign is like a dominant Yakuza mob, while ICANN acts like the crooked police or government that allow the mob to do whatever they please because they get some benefit out of it.
@B4B,
This monopoly argument is hilarious! Consumers have myriad options … over 1000 new TLDs. And less than 1% of the suffixes are operated by Verisign. Other companies control far more of the available domains. Donuts owns hundreds of nTLDs. Rightside about 50. Verisign has just a handful.
Proxy bidding is how WordPress got .BLOG. Yet somehow that didn’t bother people much. Nobody called WordPress “a dominant Yakuza mob” or a “monopoly”, even though WordPress powers something like 25% of websites across the internet.
Furthermore, the industry trend is toward consolidation. Uniregistry gobbled up the registrar belonging to Minds + Machines, itself an nTLD registry. Daniel Negari (of .XYZ) offered to buy 4 TLDs belonging to Rightside – a company in which he and his COO own 5% of shares, with another 6% or more owned by Frank Schilling. Schilling and Negari have merged ownership of .CAR / .CARS / .AUTO. Schilling backs Vox Populi’s .SUCKS, whose staff use his company offices in the Caymans. And so forth. It’s all very incestuous if you look closely.
1000+ new TLDs are auctioned off to various companies. Yet if Verisign buys 1 TLD – just 1 – that’s somehow a monopoly? How on earth can it be said that Verisign is “sole provider of a good or service”? I have personally purchased thousands of domains in roughly 100 different extensions. Out of all of those, just 3 were Verisign TLDs. If this were a monopoly, that wouldn’t be possible.
There’s no obstacle to buying or using nTLDs except outlandish prices (in some cases) and lack of consumer interest. It’s up to the registries (or even domainers) to convince the general public to use the new domain endings.
Let’s face it. The nTLD program has had nearly 3 years to market a very diverse menu of products. If the rate of adoption is disappointing, it’s no use blaming .WEB or Verisign. .WEB wasn’t around. Consumers had already chosen their domains years ago, and these were often .COM. Verisign didn’t hold a gun to their heads saying, “Don’t switch to an nTLD!” Consumers make their own choices. nTLDs have been widely available this whole time. And they’ve been as cheap as $1 or even 1 penny.
.WEB was bound to steal some of the thunder from many of the smaller nTLDs, regardless of who owns it. Those domainers and registries wailing and gnashing their teeth would have faced pretty much the same amount of competition from .WEB had it been purchased by Google or Web.com.
Several people I’ve come across are tearing out their hair at the prospect of .WEB, saying that it’s unfair to let a big buyer win a big auction, declaring that to own 1 new TLD out of 1000+ new TLDs makes for monopoly. They’re reacting as if .WEB ambushed them, even though it arrived right on schedule after years of anticipation.
I’ll tell you what’s funny about this. Verisign owns about 0.5% of the TLDs you or I have to choose from. People who call this a monopoly are usually nTLD proponents. Yet what they’re really implying is that 99.5% of the products can’t compete with 0.5% of products, despite cheap pricing, wide distribution, and completely unfettered access! 0.5% isn’t a monopoly on supply. At best, it’s a monopoly on what mass consumers actually want.
Personally I don’t think the nTLDs are as hopeless as that, but some nTLD enthusiasts clearly do. O ye of little faith!
Joseph,
Nothing’s hilarious about that argument, in fact while you might be a successful investor with domains, you’d clearly understand that in the business world, this is exactly what a monopoly is and regulations exist solely to prevent such thing.
Interestingly, I have already countered many of your points via my original post. I clearly stated that the quality of .web is completely different to that of .best (or .lol for that matter). I remember when even some of the most ardent new gTLD naysayers on NamePros used to show some interest for .web. This extension is simple, memorable, short, easy to pronounce and basically everything a general-purpose / generic new TLD should be. I don’t think this is up for debate really, considering that some of the new gTLDs are scraps (like .webs, .ooo, etc) or great single words (.media, .design, etc) with limited potential of good keywords because there are only so many meaningful left+right combination.
Seriously, not only did I point that out, I also mentioned that the quantity is irrelevant because they have low market share, and that’s why I brought up the AT&T and T-Mobile deal, I am not sure why you went on talking about the +1000 new gTLDs without even addressing what I had already mentioned. Please do remember this is about monopoly and in monopoly, it’s about market share and market influence, and I doubt the combined financial prowess of Uniregistry, Web.com, Donuts, Rightside, and XYZ would be worth even half of Verisign’s, and that brings me to your next point…
“Consumers had already chosen their domains years ago, and these were often .COM. Verisign didn’t hold a gun to their heads saying, “Don’t switch to an nTLD!” Consumers make their own choices.”
If you had any knowledge of marketing then you’d realise that consumers are easily influenced (especially by following what’s already popular – sheep mentality), but even without considering that, you do realise that when the gTLDs started to open, there were over 100 million .COMs around, right?
Let’s be real, consumers haven’t had much of a choice really, and bringing the likes of .Pro or .Travel to the equation wouldn’t really help your case. The fact is, the gTLDs were in serious disadvantage when it came to mass adoption and general awareness, simply because the .COM and .NET had a couple decade head start and they were already well established, so telling me that ‘people chose .COM over .MEDIA in 1998’ is untrue and dishonest.
The onus here was on ICANN, the hundreds of millions they got from the application fee, plus the more than +200 million just on a handful of auctions, and they are doing absolutely nothing about pushing an initiative that was created by them to begin with. They quite clearly couldn’t care less, and at this point, it is a pure fact that ICANN is as corrupt as it gets, definitely on the same level of other so called non-profit organisations such as FIFA, but unfortunately we don’t have someone in the mainstream media like John Oliver exposing them since ICANN is not widely known to the general public. But ICANN should certainly be held accountable for the hundreds of millions they have most probably put into their own pockets.
Oh and that lead to your other point, which again, I touched upon briefly through my original post: had it not been for Verisign, the losers of .Web would have made a lot of money (to potentially invest in the gTLDs again). Now, that money belongs to ICANN’s ‘non-profit’ pockets, and .Web has been purchased as an offensive act specifically against the growth of gTLDs. We all know this, and I suggest reading Michael’s post again to see how even he thinks it’s a defensive act (for Verisign), meaning it was done so that they remain the dominant player in this game, by an incredibly large margin.
You should understand that if .Web was purchased by Google, it wouldn’t be a monopoly because Google doesn’t hold the majority of the power in the TLD business, so it would be a fair game. Similarly, if .Web was purchased by literally any other company, then it wouldn’t be a monopoly because of their smaller marketshare, finance, and influence compared to Verisign. For that matter, Verisign could have bought Tesla and that also wouldn’t matter. So again, it doesn’t matter if there are a million TLDs, what’s important to understand is the concept of monopoly relative to a specific market segment, and Verisign is the biggest player by a huge margin in this industry, therefore giving them the chance to get even more power is something that should have been prevented at all cost.
But again, who’s there to stop them, ICANN?
https://media.giphy.com/media/13yNFN1TlNCjC0/giphy.gif
@B4B,
Sure enough, .COM and .NET had a 3-decade head start on the nTLDs. According to you, “consumers haven’t had much of a choice”.
OK. Now consumers have 1000+ new TLD choices. Surely that has some effect on the “monopoly”? No, that’s still not good enough.
Why are these 1000+ new choices insufficient? You say, “consumers haven’t had much of a choice really”. Why not? Because of their “sheep mentality”.
Alright. Introducing 1000+ new choices doesn’t give people a choice. They must be FORCED out of their “sheep mentality” by wiser individuals who (unlike me) have a “knowledge of marketing”!
All the .COM and .NET domains that existed before the nTLD program put the nTLDs at a disadvantage. Therefore ICANN ought to have evicted all the people who’d built websites on .COM and .NET. That would have leveled the playing field.
As far as I can see, that’s the only solution for curing this “monopoly” that would satisfy you. No imaginable TLD newcomer can compete because the status quo has been rigged by the past; therefore we must exterminate the past.
On odd-numbered calendar days, nTLD proponents will point to all the .COM domains that are already registered and say, “See! All the good .COMs are already taken. That’s why nTLDs are better.”
On even-numbered calendar days, the same people will point to all the .COM domains that are already registered and say, “See! .COM has an unfair advantage. It’s a monopoly. And that’s why the nTLDs can’t succeed.”
Contradictions … schmontrafictions …
“less than 1% of the suffixes are operated by Verisign”
“Verisign owns about 0.5% of the TLDs you or I have to choose from”
do you really consider .horse .duck .dog .unicorn .playstation .republican .whoswho .wang .sucks .hiv .rip .memorial .lamer .mrmuscle .virgin .wtf .fail .versicherung .xn--mgbab2bd as consumer alternatives to .com?
really??
So lets imagine there has always been 1 huge supplier of electricity in town. Now a solar park is built by the side with 1000 photovoltaic panels, and for every photovoltaic panel a separate company is created. You call that now there is a healthy competitive free market? come on…
Size and history matter!
common sense too!
@Lucas,
In a competitive free market, am I obliged to LIKE every product being sold? No. Not at all. What matters is that a variety of companies are permitted to start up, choose new brands to launch, market their products freely, and receive their fair share of publicity and shelf space.
If some of those companies launch stupid brands, how does that prove the market isn’t free? .HIV and .HORSE are free to fail. You ask sarcastically if I “really consider [them] alternatives to .com”. Of course not. But their inferiority doesn’t prove there’s a monopoly.
Example: There’s a company out there selling green felt shoes with curly toes and bells. Do you consider these to be an alternative to regular shoes? If not, then I guess that proves Nike has a monopoly!
Here’s the point: Every single registry offering its nTLD to the public DOES believe that their product is an alternative to .COM. You and I might scoff at some of the strings they applied to run, but these companies made their choices freely. Entrepreneurs will make dumb decisions in a free market.
It’s ludicrous to think that Verisign alone has the budget to acquire and launch a successful TLD. Just look at Google, which was also an applicant for .WEB. Google’s budget is vast. Yet Google made TERRIBLE choices in the many strings it applied for – junk like .BOO, .ESQ, .MEME, .ING, .RSVP, and .SOY.
If we’re discussing monopoly, then surely Google ought to be fair game. Yet it wasn’t any lack of “a healthy competitive free market” that forced Google to pursue foolish projects. Google might easily have won the .WEB auction had it wished to. And Google did win .APP.
It’s easy to point to the worst nTLDs. But there are quite a few nTLDs for which a compelling case can be made – e.g. .CLUB, .APP, .TECH, .LINK, and many of the more narrowly defined keyword suffixes. These 1000+ nTLDs – good and bad – get plenty of publicity and plenty of shelf space.
In a free market, all competitors get a fair chance to succeed. A free market DOESN’T guarantee that all companies or products will be equally good. So you may declare that the nTLDs are inferior in terms of quality, but that doesn’t imply that the market isn’t free.
From a consumer standpoint, people have 1000+ choices – more than they’ve ever had. And they’re free to choose any 1 of them. In a monopoly, they’d have only 1 choice. And that’s certainly not the case.
I have owned over 9000 domains, and in the past 15 years I have never once used Network Solutions, and 99% of domainers (representing millions of domains combined) do not use Network Solutions, so I do not consider them a monopoly. For most of the 1990s they were like a monopoly (I used to pay $35 per year per domain to them for several thousand domains), but that completely changed by the early 2000s. You maybe could say that Network Solutions has a government sanctioned monopoly on running registrar services (all the back end stuff for .com, net, etc.) but I am not sure that really means much as the average consumer has no idea how any of it works and does not care about that part at all.
Also, unrelated to any of that, I think you are putting far too much weight on the importance/value of .web. As an old-time domainer, I like .web a lot because it feels like a good replacement for .com, but I have no idea what younger people think of it, and more importantly many of the 1000+ other new extensions (.info, .biz, .co, .online) are just as good. Verisign has the power to make .web a success because of their giant web presence, but there is a big difference between an industry leader (and that label is very debatable for them) and a monopoly.
@Eric,
I don’t think great new gTLDs will cease to exist, or become irrelevant because of .web. In fact we have no clue how Verisign will handle .web. They might price it like .game/.car/etc and ask a few hundred as the minimum reg fee, or they might do it like .COM with a low fixed price. We simply don’t know, and that was not really my point.
I firmly believe that top tier keywords like Michael’s Digital.Media or Bank.Loans would not go anywhere, I actually believe that these domains could very much increase in value regardless of how new gTLDs will turn out to be in a few years. Why? Simply because they are fantastic domains, and any new startup, or even long-established business, can potentially utilise them brilliantly.
Having said that, I don’t know what is it, but every time a collective organisation is created for some good initial purpose, such as creating direct standard or unifying different aspects of an industry or country together, they will ultimately almost always end up being a corrupt organisation that’s hardly more than a parasite.
Fifa, European Union, ICANN, and so on. Those things had real purpose at some point in time, but now, leeching money off from others is the only thing they are capable of.
I think if Radix, Donuts, Rightside, etc all unite together and file a big lawsuit against ICANN, it could shake ICANN off a bit at the very least. ICANN is so incredibly lucky that they are not under the public’s eye, so they seem to get away with everything, it’s about time someone powerful exposed them for what they truly are.
Oh and by the way, your blog about the ’10 failure’ you have on your website was a fantastic read, thanks for sharing such information.
Why should money get distributed to losers ?anybody that thinks that’s legitimate has got to be out of their mind. That is a recipe for shill bidding.
Can you relay which new g registry you work for or is that secret ?
@Domain,
His arguments would deserve equal consideration even if he were 1 of the losing applicants for .WEB. I think it’s important to deal with the ideas, regardless of who presents them.
Not sure I agree 100%. The opinion of an outsider vs someone with a vested interest changes the equation.
You’re right in a sense. Knowing someone’s identity can affect how we perceive the person’s motivation for making an argument. But when we’re assessing the argument itself, trying to figure out whether the claims are valid or true, considering identity and motivation can only get in the way.
Dismissing someone’s argument because of identity or motivation is actually a logical fallacy – “ad hominem”. People sometimes think “ad hominem” means a personal attack. But it doesn’t. It means being distracted by the identity of the speaker rather than the actual words and ideas.
Verisign does not operate the .org registry.
.Org is operated by PIR
https://pir.org/
Verisign operates .com; .net; .tv and .cc some IDN’s of .com and now .web
.name has almost 130K registrations and is number 30 in all gTLD’s
Not sure its losing money
not really sure how it can lose money
what is the cost for Verisign to register a .name domain Vs. a .com or a .net?
Probably the same
@Joseph,
I really do appreciate your responses, both here and the ones on OnlineDomain.
Have to say though, most of the points brought up by you are already addressed through my previous replies. So instead of repeating myself I will briefly talk about some of the topics you keep mentioning.
For one, I have already made it clear what I mean by monopoly (on OnlineDomain). The literal, dictionary definition is almost non-existent in the real world, so I am not sure why you keep bringing up that literal definition as I am not going to debate over that.
Here’s how I see this, back in 2005, AMD gained a massive ground on Intel in regards to computer processors, they became almost 50-50, and all of a sudden Intel started to get very worried, their tactic? “Intel specifically tried to halt competitor AMD from gaining ground by paying HP, Lenovo, and Acer (and others) to slow or stop the launch of products using AMD chips”.
And it worked wonders! Never again AMD could compete against Intel, market share fell down dramatically, and most importantly (to Intel), mindshare regarding AMD dissipated quickly before it could even catch on. Intel was sued later, payed a hefty price, but the damage to AMD was done. Fast forward to this day, and Intel is what can be considered a ‘monopoly’. Yes AMD is still around and they are still making processors, but Intel’s business strategy has always been to kill of the competition at whatever cost (hence a monopoly), though realise in this example, this whole thing cost Intel a lot (financially), but they killed their competitor, mission successful. (unrelated note: Intel’s evolution pace in terms of power of processors between one generation to the next decreased substantially, and price increased ‘incidentally’ after all this).
Different industry and all, but this is how I see Verisign. They had almost zero interest in new gTLDs, didn’t even apply for .Web, saw a bit of danger looming their way, so best action was to just do whatever it costs to stifle and reduce your competitors to the point of irrelevance.
The difference here is that what Intel did, even though it was successful overall, was deemed as unethical, because the law system, for how bad or corrupt it can be at times, is still a million times better than a blatantly corrupt ‘non-profit’ parasite organisation such as ICANN. I have explained this already, but ICANN willingly handed .Web to the organisation that intends to use the extension against the competition, a ‘competition’ that exist solely because ICANN gave them the privilege to exist in the first place. You see, when it comes to the domain industry, there’s no actual free market like you keep mentioning, everything’s all up to ICANN’s whim. Thinking about it now, ICANN seems like a private military company that supply weapons to both sides in a warfare, simply because they gain more (non)profit.
And yes Google could have won, yes Radix could have won, but does this matter? no and no! Why? Verisign should NOT have won! For one they were not even part of the legit applicant list, and second, their intent was malicious (in relation to the new gTLD market growth). It’s clear that it was malicious because they stopped a private auction to happen (so gTLD operators don’t benefit), and your argument about bid shilling is not accurate because so many new gTLD private auctions have happened with no apparent issues compared to those which went to the public auctions. In fact, I’d argue that .Salon, .Shop, .App, and .Web were actually more overpriced compared to the many ones conducted privately.
Oh and please stop giving consumer too much credit. The vast majority of consumers are ignorant one way or another (about domains), and to expect them to be knowledgeable about domains and study them simply because GoDaddy says ‘here are a few different (meaningless) suggestions’ is asking too much from both normal people and new businesses alike. Clearly a chicken and egg scenario for new gTLD was inevitable, and without proper marketing push (and eventual successful startup) for many many years (plus more cases similar to Alphabet), the general consumer would not choose a new gTLD over the many decade old .COM. There’s no mindshare for new gTLDs, just as there’s no mindshare for AMD processors, and now, it’s very unlikely that will change.
My last point: This is not .COM vs .gTLDs vs .WEB. In fact, .COM by itself is a non-issue since it has existed for a very long period. This is about an industry with a fair close competition, Daniel and Frank, Donuts and Rightside, all have self-interest yet they all ‘fought’ together to bring awareness of the new gTLDs, along the way, the ‘industry leader’ didn’t like new competition, so they threw 130 million on a ‘contractual obligation’ to ensure the competition is very much distanced to them, much like AMD to Intel, but unlike Intel, the leader here was happily welcomed by the regulators to act this way.
@B4B,
Essentially, the question being raised is whether Verisign’s behavior is competitive or anti-competitive. Wishing to preserve and grow their market share in .COM, .NET, .CC, and .TV is not, in and of itself, anti-competitive. In fact, it’s the kind of ordinary ambition we’d hope to see at ANY company – domain registries too.
Moreover, by securing what is arguably the very best new gTLD, .WEB, and launching it, Verisign is participating in the nTLD program, not killing it. Verisign MIGHT have used all of its resources to crush .WEB; but instead we’ll undoubtedly see Verisign promoting the adoption of a new TLD brand. Domainers are crazy if they’d really prefer to see a decade-long mud-slinging battle between .COM and .WEB. As things stand, .WEB will be positioned as a complement to existing TLDs like .COM. Naturally that’s better for Verisign, but I would argue that this is better for the other nTLDs as well. The entire industry can grow together, believe it or not. And it’s appropriate than an industry leader like Verisign lead the charge with a new suffix of its own … rather than the only alternative, which would be Verisign opposing ALL new suffixes. Would you really have preferred that?
You say of Verisign,”their intent was malicious (in relation to the new gTLD market growth”. Malicious how? Did Verisign executives slash the tires of Donuts executives? Did Verisign employees throw eggs at Frank Schilling’s mansion in the Caymans? Every company in a competitive industry promotes its own products and seeks to diminish its competitors’ market share. That’s 100% rational, 100% normal, 100% ethical. TV ads for 1 car brand will mention how another brand gets inferior gas mileage, etc. TV ads for 1 brand of AA batteries will mock another brand of batteries.
We can hardly expect Verisign to PRAISE the products being marketed by its competitors. Would that really make sense? And if you’re really being fair, then you must acknowledge that EVERY nTLD registry has criticized .COM. Daniel Negari ran a TV ad comparing .COM to a broken-down old-fashioned automobile. Frank Schilling declared that .COM would be relegated to the status of AM radio. Minds + Machines ran an ad several years ago announcing, “Dot COM is Dead”. All of these registries are competing with one another. They all want to grow their own market share and diminish that of their competitors, just as 1 football team wants to score against an opponent and block them from scoring. This isn’t malicious. Nor is it anti-competitive. It’s simply competition.
Let me attempt to clarify the issue by delineating some different kinds of anti-competitive conduct:
(1) Verisign could pay all the major registrars to DENY shelf space to the nTLDs. In the example you’ve just given with Intel, that’s what they did. Has Verisign done that? Apparently not. Most registrars offer a wide variety of nTLD products.
(2) Verisign could acquire other big registries and back-end providers. If we saw Verisign buy Centralnic, Minds + Machines, Rightside, Uniregistry, or Donuts, then we could argue that the domain industry is consolidating too much and headed for monopoly. Is this happening? No. There are now more registries vying for market share than ever before. You may recall that Verisign actually lost a contract to Centralnic.
(3) Verisign could exorbitantly raise prices on a “captive audience” of .COM owners. Theoretically the price could be as high as some nTLD registries charge – $50 or $5,000 per year. This is the sort of scenario in which anti-trust regulators do become involved. Indeed, there have been price caps on .COM for awhile now. So it seems regulators are not asleep at the wheel, and Verisign has so far acted responsibly.
Those are 3 axes for anti-competitive behavior. Verisign could move in any 1 of those 3 directions, and then you could perhaps argue that they’re engaged in unfair, monopolistic behavior.
However, what’s actually happening is completely different and quite straightforward. Verisign is simply launching a new product: .WEB. They’re not bribing GoDaddy to deny shelf space to the other nTLDs; in fact, all those nTLDs are abundantly available. They’re not gobbling up other big companies to acquire an excessive portion of existing market share. .WEB has literally zero market share.
Earlier you said: “Verisign is the biggest player by a huge margin in this industry, therefore giving them the chance to get even more power is something that should have been prevented at all cost.”
Wait a second! What? A company is already big; therefore we must prohibit that company from launching even 1 new product? That company must be confined to the products it already manages? If .COM really is as saturated as nTLD proponents constantly claim, then Verisign must be denied the opportunity to release a new TLD and participate in future online growth?
Please explain what the cutoff is. The world is full of big companies. Apple is already pretty big. If Apple buys the rights to a new idea, should Apple be prevented from launching that idea as a new product? Should government step in and say: “Apple, you malicious force of evil, how dare you release the iPad! You’ve already profited enough from computers. No more products for you! We command you to give all new ideas whatsoever to your competitors and let them win from now on!”
Really, that’s what you’re advocating.
Spot ON!
Spot on! real life business
I have nothing to contribute other than to say that this is the best domain discussion thread everrrrrrr! For whatevr it is worth, I think that only .com will survive and that the ntlds never made any sense to me. We live in a .com world.
@Maurice,
I know this was not specifically addressed to me, but I am going to say thank you anyway!
Truth is, I have a deadline for dissertation in a couple of days, and instead of writing for that one, I completed one here on this topic. Hopefully my professor would be fine with the one written here!
Personally, I think all great meaningful domain names will survive, but when it comes to a de facto standard extension, well this will now most probably remain as .COM.
@Joseph.
Anti-competitive is perhaps a better way to put it, though I do believe that when a company is being successful at their anti-competitive strategies, then they are essentially a monopoly, even if the dictionary meaning doesn’t exactly define it like that.
On that point, I fully agree with your first part, Verisign has every right, and should push to grow their existing extensions, so this is not an issue at all.
About your second point ‘ Verisign is now backing a new gTLD instead of opposing ALL new suffixes’. While time will tell, but I don’t see it that way at all. Prior to all this, .WEB was part of the gTLD just like .XYZ and .SPACE, I imagine .WEB would have been aggressively pushed as part of the new gTLD against .COM, and I think this push was essential for the whole new gTLD industry to garner more awareness. Right now, based on all the evidence we have about Verisign, they will try as much as they can to detach .Web from the new gTLDs in general, I mean honestly, why would anyone expect otherwise considering Verisign initially had no interest in this TLD, but only started to pursue it after they deemed the gTLD growth as a some sort of threat?
I have explained why Verisign was malicious. They ensured that Nu Dot Co would not particpate in the private auction, which they would most certainly would otherwise. Basically hitting the gTLD operators where it hurts the most: their already small financial power. You said earlier (on OD) that a private auction would lead to inflated price, I pointed out that based on the several dozen private auctions, that wouldn’t have been the case, and now all of a sudden you talk about tire slashing and egg throwing!?!
The second reason why it’s malicious is already pointed above, and it’s based on a very educated guess, if I mat say so. Simply, before this, the gTLD was = .Club, .World, .Media .XYZ, .Web, etc. Now, that equation lacks the arguably most important unit, devaluing the new gTLDs as a whole. You can give Verisign the benefit of the doubt as you want, but I would be incredibly surprised if .Web was not promoted as something outside of the gTLD program.
Your other point, about marketers hitting on .COM already is quite ill-informed, and let me explain why I think that way. There’s a massive difference between ‘badmouthing’ your competitor and bullying your competitor. The first one is practiced anywhere and everywhere, and although I am not a fan of it, it’s okey generally because it’s like the kind of bickering you see on a kindergarten playground; childish but it gets something done. So when Apple ran ‘hey I am Mac’ ad,, Microsoft eventually responded that with a PC centred ad campaign against Mac, but here it was very different, because when .XYZ ran an ad campaign attacking .COM, Verisign responded by SUING .XYZ. I don’t like using all capital words to emphaisis, but this, my friend, is the literal definition of a BULLY.
“Those are 3 axes for anti-competitive behavior. Verisign could move in any 1 of those 3 directions, and then you could perhaps argue that they’re engaged in unfair, monopolistic behavior.”
Regarding your number one point in this discussion, well my analogy was only to demonstrate the relationship behind the intent of Intel and Verisign, with different means and tactics employed by each depending on the industry. Though having said that, there’s already an unbelievably unfair advantage towards .COM’s shelf-space presence, and no, established websites being on .COM is not a good reason.
The three things I have not seen anyone pointing out:
1) Almost every mobile phone keyboards have a discrete .COM key. This is unfair and should be completely removed as this is more or less equivalent to a shelf-space in physical world. (this was understandable before the new gTLDs, but not anymore)
2) Ctrl+Enter. Why does .COM get a preferential treatment on every single PC? The same thing exist on Mac too, only a different combination of keys.
3) Many many registrars defaulting to .COM. For example, on many registrars if you just search for a single word with no extension written at the end of the search, it will most probably default to .COM, or it will say ‘Sorry .COM is not available here are some suggestions’.
So while Verisign is not paying any company to get more shelf-space (like Intel was doing), they have the work done for them free of charge without even asking, how lucky! Obviously, this is where a regulator should step in and make the playing field more equal, just like in almost every other industry.
I agree with your third point about Verisign complying with the pricing and other things like that, however for your second, well Intel could also outright purchase AMD, but that would be too obvious, and companies like Intel and Versign are ‘smarter’ than that, so they use different tactics to conceal their intent, and this brings me to your next. ” .WEB has literally zero market share”.
You have repeated this same phrase a few times already, and I am not sure if it’s deliberate or not, but you seemingly try to equate .WEB with just a ‘single’ extension again and again. Let me just say that I believe the entirety portfolio of Donuts cost them between $100 to $200 million (this figure may require clarification) and note some other company besides Verisign went up to just below $135 million for this one extension. If that doesn’t tell you the value of .WEB, then I am afraid nothing will.
On that point, imagine, .XYZ was mocked by industry veterans like Konstantinos and many more, and that extension with ONE applicant has proven to be quite aggressive to some extent, so just think about the potential of .WEB. These two extensions have one thing in common, they are short and they are general-purpose, and general-purpose is way more valuable when it comes to growth and power. Personally, I prefer bank.loans vs bankloans.web, but how many good names match the .loans extension really? Donuts’ entire registered domain number is just above 2 million, this number could have very well been achieved on day one for .Web by that same exact registry.
“Wait a second! What? A company is already big; therefore we must prohibit that company from launching even 1 new product?”
My above answer addresses this, but also I want to add once more that the domain industry is NOT a free market. There are limited amount of domain extensions in this market, and worst of all, unlike in a normal marketplace, you can’t come up with something new to dethrone a competitor. There’s no Tesla-like innovation possible, heck in some cases, you have almost no control over your own properties (see .Doctor). Verisign should have been disallowed to gain .WEB not because they have no right to grow or expand, but because just like how Comcast had no right to acquire Time Warner, Verisign should not have the right to acquire the best possible general-purpose new gTLD, but at least for Comcast/Warner deal, someone else theoretically could have come up with a new service or cable company with patents of their own to compete and maybe dethrone the old leader, but when it comes to domains, well that’s it! The second round and third round will mostly be about scraps and there’s no room for innovation or new stuff. Yes, one can try and pit .WEBS against .WEB, but I’d say one has to be a full-on lunatic, and a complete delusional to do such thing.
My very last point on this whole thing, and this is a response to your last point, which is actually something that works against your own argument.
First, like I mentioned, Apple works in a free-market with a potential of virtually bringing unlimited number of new products and inventions, and this is unfortunately not the case with domains (explained above), but even discounting this point, Apple should be allowed to become richer and richer as long as they make new products, such as iPhone, to the marketplace.
This is all fine, but the moment a worthy competitor started to appear against their precious iPhone, what did Apple do? Bullying. Does the similarity ring a bell to you of a company we’re discussing here?
Steve Jobs was said to have stated that he would destroy Android with all his might, he wanted to have a monopoly, and no, not that one from the dictionary, a real world monopoly. Oh I know, I’d probably be the first person who would say that neither Samsung nor Google were fair and ethical in their approach to their platforms, but at the end of the day, Apple wasn’t happy with facing competition, so they bullied the far smaller company at the time as a mean to wipe out the entire competing operating system.
It backfired, Samsung and Android became way better known from all this, so in a way, Apple lost, but here, Verisign won, so instead of criticising ICANN for allowing this to happen, let’s do as you suggest and give a big congratulation to ICANN (and Verisign).
@B4B,
There comes a point in many debates where 2 people must simply agree to disagree. We could go on, and I could discuss to the points you’ve just raised; but I don’t foresee our viewpoints ever converging.
Let me just address 1 point, which shows how far apart we are in outlook.
You mention how phone and computer manufacturers have offered consumers a built-in shortcut for .COM. One might point out that the vast majority of websites visited by the average consumer during the past 31 years have been .COM sites. So if any shortcut was to be designed, obviously THAT would be the most handy shortcut for the most people. To me, it seems like an appropriate feature for manufacturers to have offered their customers; and it’s an exercise of free will on both sides.
Yet you see this as a sign of Verisign’s “malicious monopoly”. And you insist, “this is where a regulator should step in and make the playing field more equal, just like in almost every other industry.”
Clearly, we have fundamentally different ideals when it comes to monopoly, the free market, coercion and freedom generally.
@Joseph,
When I said “My very last point on this whole thing”, I really meant it, because I too thought the same way. Though throughout this whole debate, the one thing that had me quite a bit bothered was how out-of-context you took some of my points.
Case in point: the one thing you have addressed about my comment through your above response of yours.
I clearly and coherently stated that .COM having more digital shelf-space is not exactly Verisign’s doing (I called them lucky, not malicious), so why would you put that under the claim I made about Versigin being malicious? I clearly talked about two points to back that ‘malicious’ claim, one was the public auction as opposed to the private auction (and I explained why this was malicious), the other was a potential detachment of .WEB from new gTLDs, and sort of using .WEB against new gTLDs and not the other way around. I also said that Verisign may very well choose to use the extension differently as there’s a bit of speculation there on my part in regards to this point.
So as you see, I am only repeating myself, and this has been something I have had to do time and time again because instead of addressing a point I had already made and explained, you’d go on about repeating your own initial claims, or just put a statement of mine out-of-context without taking my actual response into account whatsoever.
My last thing, for the sake of clarification, I don’t consider the points I made about the shelf-space / digital presence were about to be Verisign’s faults or even their doings to begin with, they just happen to be in a very comfortable position, and the way I see it is similar to how Microsoft was forced to give choice by regulators for the search engine of their own free Internet Explorer programme on Windows. Obviously, there are some differences, but regulators saw that since Windows is the most popular OS, and IE is built-in, then a choice of the search engine should be provided to the consumer, despite the fact that all of those programmes and services were created by Microsoft themselves, and they had the free choice to do whatever they desire with their own stuff. Similarly, all those automatic unfair .COM advantages should at least be given as options to the consumer when you set up your phone/OS/etc so that the playing field is even amongst all the TLDs.
So yeah, those three points were in response to the shelf-space argument you brought up, you said they all have the same visibility and I gave you examples why that’s not the case, but then you change the topic and claim that I have apparently called Verisign malicious for this, a completely false statement and one that’s very much unrelated to what I was saying.
So with this I will end my part, but just know unlike many here, I have no horse in this race. I tried to be as objective as possible, and I have been observing everything in regards to this industry very closely to understand how things will possibly pan out, hence I decided to express my analysis on this whole situation here.
On an unrelated note, I don’t think it’s possible to win a debate on the internet, even if you do.
It may not be possible for either of you to win the debate against each other, but people like me reading what both of you write might be influenced one way or the other, as many of had never given the topic much thought to begin with.
@Eric Borgos,
Good point. I have half my conversations with other domainers in public. Basically for 2 reasons: (1) so that I can expose myself to more criticism and learn where I’m wrong; and (2) to give others a chance to eavesdrop on what I and someone else each think, allowing silent readers to form their own opinions or chime in.
@B4B,
The goal isn’t to “to win a debate on the internet”. Personally, I enjoy thinking aloud. We’re just having a conversation. And I don’t try to win a conversation. At best, in a debate, 2 people identify their common ground and their differences more precisely.
For example, I don’t believe regulators should force phone manufacturers to rip out a .COM shortcut. In my view, companies ought to be allowed to introduce products or features which they feel – rightly or wrongly – their customers may use and like.
I’ve re-read what you wrote; and abolishing that .COM shortcut by fiat is what you explicitly advocated. Maybe you don’t regard this as part of Verisign’s “malicious” behavior. You exclaimed “how lucky”, and I took that for sarcasm. But it seems I was wrong in assuming you viewed this as a secret Verisign plot. My mistake.
Malicious plot or not, you have declared that .COM shortcut to be “unfair”. Not only unfair but fair game for regulators – something to be abolished from on high. It seems that you regard .WEB in the same way. May I ask, is there anything new – anything imaginable – which might give Verisign any advantage whatsoever … that you’d permit? Or must this company be curbed and punished at every turn?
We have a basic philosophical difference here. As far as I can tell, you believe it is the duty of government to step in and forcibly level the playing field. If any company succeeds a bit too much, then regulators must begin cracking down not only on that industry leader but on companies in separate industries that choose to give their brand an advantage. Phone companies must tear out their .COM shortcut. Barnes & Noble bookstores probably ought to eject Starbucks cafes, since Starbucks is already too well known. In fact, government must compel them to do so.
Many people in the world do share your attitude in these matters. Personally, I incline toward free enterprise. I’m all in favor of interference by regulators when a company is doing something that clearly harms the general public or when the company is engaging in anti-competitive behavior, which stifles innovation and choice. However, leveling the playing field is something I’d vigorously oppose. It feels a bit pompous to call such overregulation a threat to liberty, but that’s how I see it; and I’ve never minded appearing pompous.
Real life business points , refreshing
Thank you
@Joseph,
I agree with you that this is all about having an intellectual conversation here while understanding our differences, so my last phrase was just a light statement without any hidden meaning behind it.
Anyway, I just wanted to say that you’re making quite a lot of assumption about me. I am all for a free market, one in which Starbucks, Apple, Barnes & Nobles, Verisign, among many other companies become bigger and richer by practicing a fair business model. Since the introduction of the new gTLDs, .COM has actually become bigger, but have you seen me criticising Verisign or ICANN regarding that? Heck had it not been for .WEB, in 10 years time, if the new gTLDs were completely irrelevant, and .COM was at 200 million domains, then for the most part, I would just call it a fair play since at the end of the day consumers are free to make their own choices, so to me the idea of unfairly curbing a company just because it has become too big is simply absurd. So I do believe that you and me share the very same philosophy on this regard.
Though you have blown the whole .COM digital shelf-space points I made (as a response to your claim) way out of proportion. This is a non-issue in the grand scheme of things, and this whole conversation didn’t start because of that, far from it in fact, so while I could further clarify things, I feel like there’s no reason to harp on about it.
I do, however, have a big disdain for unethical, and anti-competitive practices especially when it’s employed by an industry leaders (to gain monopoly). Typically it’s fear that pushes these companies to act that way, but nevertheless, these practices should be examined and regulated since otherwise, the corporate world wouldn’t be much different from feeling like having roads with no speed camera and no traffic lights.
I am genuinely appalled that at this stage, why anyone would defend Verisign for this acquisition despite the fact we have evidence they have already acted like a bully toward the new gTLDs, plus, their very first involvement with .WEB was to ensure no private auction would occur, simply to hit the gTLD operators financial power. What Verisign will do with .WEB is unknown at this stage, but it’s almost guaranteed they will do their best to ensure it won’t do the other new gTLDs any favor, if not downright go against them with a slogan like ‘difficult to choose from +1000 new options? We’ll make it easy for you with just one’.
As Michael mentioned in this very blog, for Verisign, this was a smart move, as they have now cemented their leading positions for many more decades. The onus was on ICANN, and my analogy for them acting like a PMC which provides weapons to all sides of the war since it benefits them is what I believe worth looking at. ICANN should pay for allowing such practice, not getting paid for it.
@Eric
Thank you for the comment.
I do believe in this industry, many, including the powerful individuals/entities, are just used with taking ‘losing position’. For example, every time an absurd UDRP case happens, you’ll see a few lines of criticism at best and then everyone accepts it as if ICANN can do whatever it pleases.
I just hope that through this whole conversation, some have been convinced that we shouldn’t accept everything that happens in this industry by just saying ‘it is what it is’ without any thought and examination behind it. ICANN, Versigin, and even industry veteran shouldn’t just get away with any bad practice just because they are powerful. (for that last point, I suggest checking out the fascinating Fusion documentary behind the blackmail/money extortion website known as “mugshost”)
By the way, I loved reading many more of your blog posts, very honest and quite informative.
@B4B,
Yes, Eric Borgos is always refreshingly candid and open – which, in this cutthroat industry, is like a rain shower in the desert.
Was it you, B4B, who circulated that Fusion video report on Mugshots.com? Worth a watch, definitely. There’s an undercurrent of extortion and hostage-taking in the domain industry typified by cybersquatters; but it resurfaces in other business models too – arguably .SUCKS and Mugshot removal. I wish that habit of thinking would vanish from the industry. It never will. But many domain investors are eager to distance themselves from it.
By the way, B4B, I’m not actually sure who you are. That doesn’t affect the merits of anything you’ve said. It just feels odd not to know with whom I’m speaking. So if you’d like to privately tap me on the shoulder and say, “Hey, it’s me”, I’d appreciate it. Not to expose the man behind the alias, or anything. Just a hello.
Even after reading everything you’ve written, I still can’t see any reason why Verisign ought to be denied the opportunity to launch a new product like .WEB. Especially since you’re not objecting to .WEB as such. Really, I’m not aware of any instance – in any industry – of regulators prohibiting a company from introducing a new product simply because the company has already been successful.
You have produced examples of regulatory oversight from other industries, but they don’t seem to match these circumstances at all. For instance, you alluded to the case of Microsoft being forced to feature multiple search engines within its browser – not just its own. Let’s think about that for a second. The logic there would be that Microsoft has 2 roles. They not only offered a product (the search engine); they were also the dominant outlet for accessing search engines (the browser).
What matches that here in the domain industry? Registries offer a product; and registrars are the outlet for accessing that product. But Verisign doesn’t have those 2 roles – just the first. So the comparison breaks down. Your example is valid, but it ought to be applied elsewhere.
For instance, Uniregistry is a parking platform, a market place, a registry, and a registrar. Is Uniregistry a monopoly? Not at all. Frank Schilling might want to be dominant in all those areas, but currently his business still faces plenty of healthy competition. So there’s no need for regulators to interfere. Just as a theoretical example, though, we might see Uniregistry do what Microsoft attempted. If Uniregistry (the registrar) had as much market share as Microsoft’s once had with Internet Explorer … and if Uniregistry (the registrar) were to stock ONLY domains using TLDs from Uniregistry registries, excluding all competitors, THEN we’d be facing a situation where anti-trust regulators should intervene as they did with Microsoft.
This isn’t happening. Not being a registrar, Verisign can’t do what Microsoft did – not even theoretically. Uniregistry could, if it were as dominant as Microsoft once was. But it isn’t. Furthermore, Uniregistry gives shelf space to TLDs from virtually all registries – not only its own products but TLDs from Verisign, Radix, Minds + Machines, Donuts, Rightside, et al. That’s also what we see at the dominant registrar, GoDaddy. So there’s really a very healthy amount of diversity and choice out there.
Your primary argument seems to be that Verisign is evil – “malicious”, a “bully”. And your solution, as near as I can tell, is to deny Verisign the ability to launch new products. If .COM is really saturated, as some believe, then this would ultimately starve the company to death. Is that fair? Is that free enterprise?
Again and again, you return to the fact that Verisign chose an auction mechanism in which its $135 million winning bid would not be distributed among the losing bidders. You regard this as “malicious”; but this was an option officially given to applicants by ICANN. Furthermore, this is the NORMAL scenario for auctions. It’s what we’re all accustomed to when we bid for domains or foreclosed homes.
Arguably, there’s something quite perverse about the other kind of ICANN auction. Competitors can – without even seriously wanting to win the auction – bid you up as high as possible, forcing you to overspend. And they’re rewarded for doing so, dividing the proceeds of your wasted money amongst themselves like a pack of hyenas devouring a carcass. It’s sensible to avoid that. You avoid shills who’d take money out of your budget and, as competitors, use it against you. You may say that Verisign is “malicious” for wanting to avoid giving its competitors money, for choosing the normal sort of auction in which shills don’t wastefully bid them up and up and up. Logically, though, isn’t it equally “malicious” the other way round – for other applicants to force up the bidding, taking money away from THEIR competition? Frankly, neither sort of auction is “malicious”. They’re both options with pros and cons. Versign didn’t abuse ICANN’s system by selecting an option ICANN officially offered applicants.
I’d never say that Verisign can do no wrong. Earlier I outlined 3 directions of anti-competitive behavior in which the company MIGHT go. And if Verisign ever were to indulge in such actions in a way that’s flagrantly harmful, I hope I’d be the first to criticize them.
When Verisign sued .XYZ – not the nTLD program as a whole, remember, just .XYZ specifically – it wasn’t without cause. .XYZ had certainly opened itself up to complaints of false advertising. No regulators were around to police such misbehavior unless someone complained; only a lawsuit could address the problem. There’s a real argument to be made saying that misleading statements by Daniel Negari harmed consumers. But registrants lacked the coordination for a class-action lawsuit, which is what I’d have preferred to see. However widespread the harm to naïve registrants might have been, it was probably far too small for most individuals to ever rise to the level of caring, let alone a lawsuit.
Another registry, though, might have been able to point to a more significant loss. If deceptive claims about .XYZ led to a reduction in .NET registrations, say. And that is what Verisign was pointing to, as I recall. Was it appropriate or prudent for Verisign to make that argument through a lawsuit? That’s arguable. But it’s hardly ridiculous – not if you remember what .XYZ actually did and said. Interpreting that targeted lawsuit as an attempt to sabotage the entire nTLD program isn’t really justifiable.
I’m also on record saying that many of the prongs of Verisign’s lawsuit struck me as flimsy, baseless, and ill judged. America has a litigious corporate culture, which I don’t admire. But that tendency extends to all the big registry operators. Within the past month, Donuts sued ICANN over this very .WEB auction. Donuts wanted to get a windfall by bidding up and losing .WEB; and I’m sure they’re very disappointed. They lost; but their claim that they were being cheated was thrown out of court, wasn’t it? Were they “malicious” to bully ICANN into giving them Verisign’s money? No, corporations often sue to get what they want because the benefit is huge in comparison to the cost. It’s the same with RDNH and the UDRP. Verisign’s claims about .XYZ’s false advertising seem far stronger to me – since I do believe .XYZ made fraudulent claims – than Donuts’s case against ICANN. But I wouldn’t characterize Donuts as a “bully” or “malicious”. Donuts, like Verisign, deserves to launch new products. And I expect them both to succeed.
In the case of .WEB, this is nothing but sour grapes by someone who was cheering for another team to win. Companies ought to be permitted to launch new products. Doing so isn’t anti-competitive; it’s simply competitive. During the 1990s the Chicago Bulls kept winning and winning. Believe me, there were Utah Jazz fans who wished some regulator would step in and level the playing field by forcing Michael Jordan into early retirement so that their team could win for a change. Fortunately that didn’t happen. Basketball stayed unfair, due to that man’s “malicious” talent!
Yes, the Fusion “mugshot” report was very interesting. You or somebody else posted a link to it somewhere a few months ago in regards to some other topic.
Thank you for the great article.
I’ll probably get a .web domain name once it is released to the general public.