Welcome to 2010. Now What?

Welcome to 2010.

A new year and a new decade.

What’s in store?

Here are the greatest challenges I think we will face this year as an industry.

Legal.

The Kentucky domain seizure case is still ongoing and just a couple of weeks ago the Commonwealth said they are now going to add individuals and companies as additional defendants to the suit.

Just this month, the state of Utah has proposed its own law which would attempt to regulate domain ownership.

Look for additional states and local jurisdictions to attempt to regulate the Internet, especially if the Kentucky action is somehow ultimately upheld.

One US federal governmental agency this year sent out an order to registrars to terminate domain registrations of over 100 domains that were selling prescription medicine over the net, without any court hearing or opportunity for the domain owners to be heard.

And in China over 5,000 people were arrested this year on a crackdown on porn, while China heavily regulated the content on or banned completely sites like YouTube.com, Twitter.com and Facebook.com so its not .com investors that have to be concerned but those who own ccTLD’s which are subject to regulation of the sponsoring country.

Both WIPO and UDRP administrators have proposed quick and cheap resolution methods which they would like to implement this year, which will only increase the amount of filings against domain holders.

As it stands today WIPO and UDRP decisions have little uniformity and as we have noted before, decisions are becoming an ever increasingly just a crap shoot placing domains in jeopardy.

Finally CADNA is still pushing for additional federal legislation along the lines of the Snow Bill.

As I have said many times the only real defense domainers as a group have is the Internet Commerce Association (the “ICA”) who has made a lot of progress standing up for domain holders rights.

A membership in the ICA will certainly the best investment you will make this year to protect your investments in domains but don’t be surprised to see you legal bill increase in the coming years.

New TLD’s.

We still don’t truly know what the effect of 10’s or 100’s of new extensions will have on value and demand of current TLD’s. We can all make our predictions, but until these new extensions are launched en mass, we can only guess and opine as to the outcome.

More troubling is we still do not know all of the possible “side effects” that the new rules ICANN is setting out for the new extension will have on all current extensions, as all registries, including existing ones, want to be treated the same.

Increased registration costs

Verisign has already announced at 7% increase in registration and renewal fees for .com’s starting on July 1. For those domainer who only keep domains which pay for themseleves with PPC earnings, those earning will have to increase 7% just to break even. Those domainers who are heavily dependent on PPC revenue may renew less domains, especially is they do not have a good strategy for sales. Anytime costs increase and revenue does not follow, its troubling.

Apps, Tablets, NetBooks, Smartbooks, Facebook, Twitter and other new technology.

What effect will new technology have on domains?

What effect will the new smaller generation of computers have on domains?

In 2010 Apple will launches its new Tablet computerand a smaller version of Netbooks called Smartbooks, will also be hitting the shelves. Some believe these machines will be used less for direct navigation and more for accessing sites like Twitter, Facebook which themselves have a ton of applications, which may make direct navigation even less possible.

Facebook and Twitter have become to a large extent, self sufficient portals containing their own Apps.

What will the short and long term consequences of the shift to smaller machines and bigger portals be on domains and there value?

Less type-in traffic to domains?

Seems to be a reasonable conclusion.

Will the increased popularity and avaliabity of Apps help or hurt domain values?

That the subject of tomorrow’s post.

Yet there can be no doubt that new technology may change users habits which could negatively effect domain values. On the other hand if your holding domain that going to be the name of the next great App or technology you may hit the jackpot.

Finally although not a issue just for our industry, you should all tax note that the “Bush Tax Credits” expire at the end of this year and capital gains rates as well as ordinary income rates are bound to rise in 2012, so you should consider that in your business planning as dollars you receive in 2010 maybe taxed at a lower rate than those in 2011.