ICANN Predicts 500 new gTLD Applications & A $2M Profit, but It’s Budget Is Flawed
Courtesy of our friends at Mind +Machines, it appears ICANN has based it budget on its prediction of 500 applications for new gTLD’s on the initial roll out.
The document showing this is ICANN’s New gTLD Program Budget.
As M+M states, ICANN estimate of 500 applications doesn’t take into account duplicate or conflicting applications.
“If we suppose that 25% are in conflict, that would leave us with approximately 425 unique TLDs applied for. Subtracting a further 10% who drop out, that leaves 382 new TLDs that we can expect to see delegated.”
Other findings from the ICANN report:
The majority of gTLD applications are expected to be “straightforward,” with no need for complicated and time-consuming procedures.
ICANN expects the Independent Objector to file objections in less than 5% of the total applications.
ICANN expects just 5% of applications to fail the initial evaluations, and another 5% to request refunds prior to the end of the evaluation stage (some of these refunds would be due to conflicting applications but that seems low to me if 25% of the application will be conflicting)
M+M concludes that the report indicates that ICANN is intending to pass approximately 90% of the applications.
As I read the budget, ICANN failed to take into account any contested extensions, most of which will be resolved by a auction with the high bidder getting the extension.
Without any of these auction revenues included in the budget, ICANN is still showing making a profit on the 500 new gTLD extensions of $1,846,000.
However as we all know there will be some contested extensions which will be resolved by auction, with all that additional revenue going to ICANN.
Any budget which does not anticipate any such revenue is flawed.
The most causal observer will conclude that some contested extensions will go into auctions whose high bids will wind in the seven figures.
Moreover I believe ICANN stated on many occasions that the new gTLD process is to be revenue neutral.
How can it be revenue neutral if it is already showing a $2 Million dollar profit without taking into account any auction proceeds?
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@michael – Thanks for the credit.
I predict that we won’t see too many auctions. There’s too much incentive to work out some deal before — otherwise, instead of the money staying between the parties, it goes to ICANN.
I’m not sure that ICANN’s auctions allow for a deal to be made during the auction, between the two remaining bidders, for instance. It could be that once the auction starts, it’s either win it or go home. Either way, there are sure to be some drama and tense moments as the contenders make their deals.
Antony
1. What exactly is ICANN “selling” ?
2. BTW, In [RegisterFLY] court documents, ICANN claims they do not solicit or sell anything. Has that changed ?
3. With $47,000,000 in non-profit “reserves” in the bank and weekly cash flow
which clearly exceeds all abilities to fabricate places to spend it, why would
ICANN put any of that at risk ? ICANN does not appear to be 20 year-old
silicon valley tycoon wannabees willing to go “All In”.
4. Since 1998 when the ICANN Experiment was started, the world has changed.
Do you think 15 year old business models for launching new TLDs make sense?
Are the vocal advocates just fronts for a $2,000,000 spin of some wheel ?
Will this all result in several “brokers” taking their $200,000 fee for pumping
the game and orchestrating the “planned deals” openly disclosed?
5. What exactly is ICANN “selling” ?
6. In two years, will people have a new game they are pumping ?
At first blush the Budget appears to show a “profit” of only $184,000 but at the beginning they tuck away $42 million in “contingency or reserves” so the real cash boost to ICANN will be around $40+ million. Dont forget as a “non-profit” they need not to show such a thing. That $42 million, at least as I see it at first blush will go straight to reserves. Hmmmmm.
Stuart
In the budget on the top its indicated that all figures are stated with ,000 so the profit is like I said over 1.8M not 184k.
With the new DNS the selection of TLDs is Automated (Untouched by Humans).
What exactly is ICANN “selling” ? another Proof-of-Concept Market Trial ?
The number of slots has been expanded from 2048 to 4096.
http://www.icann.org/en/comments-mail/icann-current/msg00342.html
10514 INC
9264 ONLINE
7288 NET
6472 USA
4481 GROUP
4101 WEB
3891 TECH
3077 UK
2762 DESIGN
2570 SYSTEMS
2542 IT
2415 US
2378 SOLUTIONS
2322 LINE
2209 LAW
2171 CONSULTING
2161 INFO
2033 SERVICES
2027 WORLD
hate to be pedantic Mike but if you look at the net revenue it is $41,739,000 less cost $41,555,100 which leaves “profit” of $ 183,900.
on the form is show 184 (,000).
I read “500 new tld’s” and I ask myself is everyone crazy? Seriously.
3 or 4 new gtld’s, maybe.
500? Retarded.
but just to repeat, ICANN’s ‘REAL” profit is the over $40 million they keep as “contingency”, very clever….
WHAT “cost”?
That’s complete bullshit. They are going for what we all know is the single largest cash grab they’ve ever attempted…. for a mere “$184k” not too f’ing likely
Costs are listed in the budget
creative accounting.
Mike,
I think it is 184 point 6 or 184.6 so add 3 zeros and you get $184,600
As a historic note, ICANN (not IANA) was ONLY created to do Proof-of-Concept TLD Market Trials. That served several purposes:
1. It proved new TLDs could be added. Some did not believe there was demand. Some claimed there would never be domainers or a “domain name industry”. Many .COM advocates still do not care about (acknowledge) other TLDs.
IDNs will be a tough sell in many camps. They are easy to filter out for other
reasons.
2. Another purpose for ICANN was to buy time for the new DNS, which is now
being automated and de-regulated. [The good news is, that has happened. The bad news is, that is happening but ICANN is apparently not going away.]
3. A third purpose was to attempt to move DNS and protocol development
away from government domination, funding, etc. [The good news is that has
happened. The bad news is a Socialist Cyber-Governance structure has
replaced that, making it worse than before. The same bad actors moved
from one system to the other. ]
One over-arching result is that 99% of the actors/players have been “outed”.
It now costs about $100,000,000 per year to provide adult supervision for
them. They are well-known and kept well-away from any critical DNS or
.NET evolutionary technology.
According to the FAG
://icann.org/en/topics/new-gtlds/draft-rfp-redline-12nov10-en.pdf
“A process external to the application submission process will be employed to establish evaluation priority. This process will be based on an online ticketing system or other objective criteria.”