Lets Set The Record Straight; My 5+ Year Journey Through New gTLD’s

As the year closes I thought it would be a good time to take a look back at thedomains.com and what we have had to say about it since we started writing about it over 5 years ago.

For many, you first heard of the new gTLD program on theDomains.com.

Seeing that a monumental change to the naming system was coming we have written about it every step of the way

Readers have all kinds of opinions on the new gTLDs.

I think its fair to say its the most divisive issue in the domainer community not only in 2013 for for the last several years.

As for Mike Berkens, some see me as one of the biggest supporters for new gTLD’s.

Some call me a centrist, while others think I am a cheerleader.

One of the good things about writing a blog, is the writer is on the record.

Everyday.

However readers have a short memory.

The fact is I was not a proponent of the new gTLD program.

Quite opposite I was on the record against the program.

I fought the fight, submitted comments to ICANN during open comment periods and wrote against the program, the number of new extension being released, how the program was structured and being run and to this day most people in ICANN view me as a critic of the program and of ICANN.

Anyway as I said I’m on the record, so lets review the record.

Back when the process started I was against the program and stated that opinion succinctly, made my objections known with ICANN in public comment period and with dozens of posts on TheDomains.com

I have put together a “Timeline” of the early days, when most thought this program would never come to fruition.

When I  published my first post about the coming new gTLD’s it was June 2008.

That’s over 5 years ago.

My first post was back on June 22, 2008 in a post entitled; So Are You Ready For Hundreds of New Domain Extensions?, which I wrote in part:

During the ICANN Meeting in Paris this week, ICANN announced that it was seriously considering whether to opening up domain names to endless variations and approve hundreds of new extensions including .berlin, .paris, .quebec .cat (for Catalonia) and one for the big apple, .nyc

We’re talking about introducing potentially thousands more names,” said Paul Levins, executive officer of ICANN”

“The addressing system hasn’t fundamentally changed since its invention. These changes have the potential to have a huge impact on the way we express ourselves on the Net.”””

The application fee for a domain name has not been set, but candidates estimate that it could range from  $39,000 to $390,000.

Icann is also prepared to set up an auction system if competing groups bid for the same name.

With hundreds of new extensions what would the effect be on the valuation of existing extensions?”

Our guess, .com’s maybe become even more valuable as confusion will reign when people have too many choices, they will naturally default back to .com’s.”

County codes would be much less valuable as every major world city will get their own extension.

Extensions like .info, .biz will suffer.

.Net’s I think are also in jeopardy of devaluation.

.Org’s I think will be have the most stable valuation after .Com’s

One thing is for certain.

For trademark holders,  domainers and anyone else who want to protect their brand, its going to get very expensive to register hundreds maybe thousands of domains using different extensions.

And if companies are allowed their own extension, what a money maker it would be.”

There were 181 responses to that post and this reader summed up the sentiment expressed by almost everyone:

“”If 300 new extensions are added, I am predicting that 300 extensions will fail; bring them on. There have already been extensions that were added that didn’t do well.””

Many readers offered predictions:

“I agree with many of you that these new extensions will only enhance the value of .com’s, but I think a lot of you also miss the mark in another area: .info’s.””

“You can flood the market with as many $2,000 cars as you want but the demand for $500,000 Ferrari’s and Lamborghini’s will not be affected. You can sell sex.biz, sex.bz, sexdotwhateverextensions you want but sex.com still sold for $14M last year.”

“How many years have .net, .org, .info, .biz, etc along with the dozens of ccTLDs been around? And yet, when you look at reported .com sales, they just keep appreciating.”

“You can flood the market with thousands of TLDs but the average Joe and Jane still only knows .com when they think of the internet. The vanity and niche TLDs will be nice and all but the small business end user and big corporation alike will want the .com for their internet presence. There is no substitute for quality no matter how much fluff there is out there.”

“Bottom line, you may be dead by the time this happens.”

That was the 1st post but hundreds of post follwed:

6/24/08 Some raise concerns over ICANN Plan for “New” Extensions

6/26/08 ICANN Opens Flood Gates To New Extensions

6/27/08 Guest Post by Seb, Fight Against New Extensions”

6/29/08 Maybe Getting that New Domain Extension Won’t be That Easy

8/16/08 If you make this kind of money, why not sponsor a registry ?

8/30/08 New Domain Extensions: Registries Should be Required To Give Trademark Holders Their Domains.

12/8/08 Last Chance To Comment To ICANN On Proposed gTLD’s

12/13/08 Open Letter to ICANN: Our Take on the New  Domain Extensions

In that post we stated in our open letter to ICANN which we also submitted to ICANN during the comment period on the new gTLD’s:

So here is our opened letter to ICANN and our submitted comments:

In addition to our own comments which appear herein, we would like to support and endorse the comments made by  George Kirikos of Leap of Faith Financial Services Inc. to ICANN posted on November 23, 2008 Mr. Kirikos comments are well founded, and right on point.

We specifically adopt the following positions of Mr. Kirikos, in his comments:

The introduction of new gTLDs by ICANN, will create mass confusion in the public, increase by many fold the already existing problems of trademark infringement, phishing attacks, and increased spam. The new extensions threaten the stability and security of the entire internet.

The only applications that should be accepted by ICANN are those few which will be a net benefit to the broader internet and not just simply because the applicant ponies up $185,000

No contract be approved that would allow for tiered pricing

Tiered pricing has reared its ugly head on several occasions, in the last VeriSign contract and again for the renewal of the .org, .info and .biz contracts.

We also agree and specifically endorse Mr.Kirikos comments regarding tiered pricing where Mr. Kirikos states Due to the equal treatment clauses in existing gTLD contracts, and the removal of price controls, the Base Agreement represents a Trojan Horse that can be used by existing gTLD registry operators to engage in tiered pricing.

As Mr. Kirikos notes the ICANN staff who oversaw the drafting of this base agreement demonstrated either a) utter disregard for the protection of registrants, ignoring the outcome of a debate from 2 years ago when the same contractual flaws existed in the .biz/info/org draft agreements, or b) incompetence for not understanding the interconnectedness of existing gTLD contracts that would be impacted by these new draft contracts, if adopted, or c) both. We agree that this is the equivalent of ICANN staff allowing SiteFinder or other past contentious issues to be in the base agreement, and should be treated as such, namely a grave breach of the public trust.

We believe that this topic should be barred from any contract either in this process or in future consideration of any new or revised contracts.

This issue has been dealt with, discussed and decided.  Enough is enough with this already.

Allowing a registry to separately price each domain, on a arbitrary and subjective business, places each domain holder at tremendous risk of losing their domain, based on its own success.

The more successful an online business gets the more value the domain has and by allowing a registry to set a price based on the successful use of a domain, is clearly unfair and punitive to domain holders.

We also agree and specifically endorse Mr.Kirikos comments regarding 1.2.1, that the eligibility requirements appear to be overly broad. ICANN has a history of allowing dubious applicants to become registrars from companies associated with spam or fronts for criminal entities. The standards for entry into the root, a more serious obligation than that of a registrar, should be set much higher than that for registrars. These standards should include at a minimum civil and criminal background checks on its management and major shareholders.

We also agree and specifically endorse Mr.Kirikos comments regarding section 1.2.2.1, that history has shown that open gTLDs (like .biz or .info) have been failures. Open gTLDs should not be permitted at this time, and should be deferred until future rounds.

We also agree and specifically endorse Mr.Kirikos comments regarding section  1.2.2.2, the “Contract Execution and Post-Delegation” that the language must be made stronger. ICANN routinely approves all material changes to community-based applications. This represents a reward for “bait-and-switch” applications, whereby the applicants promise one thing, but then after their applications are accepted, devolve into something very different from what they initially promised. Severe financial and other penalties (including mandatory redelegation or tendering to other prospective registry operators) need to be in place to ensure that applicants live up to their contractual obligations, and not be rewarded for these kinds of games.

We also agree and specifically endorse Mr.Kirikos comments regarding section 1.2.5, that applicants will tweak their agreements to favor themselves, thereby creating Trojan Horses that affect registrants in other gTLDs.

The need for universal standard agreements that cannot be altered except through well publicized long processes with actual written notice to all existing gTLD registrants, so that they can make informed public input, is essential.

We also agree and specifically endorse Mr.Kirikos comments regarding section 1.3, that IDNs can and will be used for phishing, TM infringement, consumer confusion and malevolent purposes. Strong safeguards must be in place to prevent these activities.

We would go further and ask that ICANN consider allowing all valid trademark holders to receive their trademark for each extension for the normal registration cost for each new gTLD.

There is no reason that a trademark holder should have to pay a premium, that is an amount well above normal registration fees, to obtain and protect a trademark.

We have already seen in the rollout of the .me extension many clearly trademark terms sell for thousands of dollars and tens of thousands of dollars to other than the trademark holders.

This is an embarrassment to all those in the domain industry and it is ICANN failure to pass rules to prevent registries from auctioning off trademarked terms, that allowed this to happen.

To date the highest price paid for a .me domain is Toyota. Me for $90,000 to a company with no right to the domain.  Moreover several of these .me domains that sold in the thousands of dollars have already been taken in WIPO proceeding.

Allowing registries to sell domains of famous trademarks and keep the profits from the sale, is a basic flaw in ICANN policies, which undermines ICANN credibility and the entire domain system.

If a trademark holder is entitled to a domain, like pepsi.drink, then they should not have to pay a premium to obtain it.  It is already costly enough for large trademark holders to pay for all the defensive registrations, without charging them 5x-10x the price of a normal registration.

We also agree and specifically endorse Mr.Kirikos comments regarding the Attachment to Module 2, page A.

This draft contract itself opens up the 2-year old issue of tiered pricing for existing gTLD registrants, due to the lack of pricing controls in these draft agreements.

We also agree and specifically endorse Mr.Kirikos comments regarding the Attachment to Module 2, page A11, the lifecycle of a registration should require the redemption grace period, for the protection of registrants. Currently ICANN has created a mess at the .com and.net level for expired, non-renewed domains. Due to ICANN failure to pass and enforce rules on how a .com or .net, domain should be dropped by a registrar, we have a wild west situation where each registrar has can and has  decided what to do whatever they want with an expired domain.

Some registrars, like Tucows.com pick whatever domains they want to keep from their customers expired domains, place them in their own name, without allowing them to drop.  Tucows.com by its own admission has obtained hundreds of thousands of domains, by taking ownership of expired domains and  warehousing them.  Tucows.com has already set up a site to sell some of these domains to the public, Yummynames.com.

Enom.com also appears to have taken expired domains of its customers, placed them into a sister companies name and is selling them through and affiliated site, AcquireThisName.com

Other registrar send their expired domains to either namejet.com or snapnames.com where they are auctioned off to the highest bidder.

Other registrars like Godaddy, hold their own in house auctions, setting different starting prices, going into the thousands of dollars, based on the traffic a domain receives and the earnings of the expired domains on a PPC page owned and operated by  the registrar.  Included in these domains are many domain which are obvious trademark infringing domains, full of PPC ads containing the trademarked term.

Allowing a registrar to charge a minimum price based on a earnings of trademarked terms, clearly places registrars in the position where they make money off of trademarks.

Examples of this, just  from the last couple of weeks, are edhardyclothing.com, an expired Godaddy registered domain, which sold on TDNAM.com, for its minimum price set by the Registrar, Godaddy.com ,in the amount of $6,880.  The second domain DishNetwork.net (DIshNetwork.com is the official site of the company) sold for the minimum bid of $2,880.  In essence Godaddy got paid for the revenue generated from trademarked terms appearing on clear trademark infringing terms.

The wild, wild west situation has one root cause and that is ICANN’s failure to adopt and enforce uniform rules for the expired domains.

Now with new gTLDs there must be clear and unmistakable rules for deleting domains for which the renewal fees go unpaid.

We urge ICANN to take this opportunity to adopt such rules for both the new gTLDs and existing .com and .net domains, that forces all registrars and registries to drop expired domain, after a standardized grace and redemption period so that the domain can be registered on a first come first served basis,  or adopt a central drop service which a deleted domain would go to the first person to backorder a domain.  A registry or registrar should not be allowed to keep the domains of its customers nor should it be allowed to profit from the sale of trademarked domain names and other expired domains.  Each registrar should not be allow to create its own rules on how expired domains should be handled.

Finally we think it’s only fair that ICANN announces in advance if any adult extensions will be permitted, without requiring applicant to pay $185,000 to find out.

We all know the history of the .xxx extension, which was ultimately not permitted and voted down basically on moral grounds, upon the demands of the US commerce Department.  If the .xxx extension was rejected on moral grounds ICANN should issue a statement that such an extension or .sex, .porn, .adult, will or will not be allowed.  To require many companies to pay $185,000 non-refundable fee to find out ICANN’s policy is unfair and to all applicants and may discourage additional applicant who fear losing $185,000 and therefore do not apply.

This situation has again be dealt with, and the answer is either such extension will be allowed or they won’t.

But of fairness this policy must be made clear, before accepting applications, and 185,000 non-refundable dollars.

We respectfully request that our comments, along with Mr. Kirikos be given great weight in determining the future of new gTLDs and the handling of current extensions.”

1/3/09 ICANN Publishes It’s Annual Report: Here is Ours

My position: In proposing the new gTLD’s,  ICANN has placed the stability of the internet at risk for their own financial gain.

I go through many  reasons the roll out of hundreds or thousands of new extensions in a short period is bad idea.

I suggest that ICANN limit new extension to no more than existed in the previous year, so if there are 22 TLD’s (before .xxx) they should have a maximum of 22 new gTLD’s in year one and 88 in year two and so on and so on.

2/18/09 ICANN: Roll Out Of New gTLD’s Running Behind

2/21/09 Thinking About Applying For Your Own gTLD? It Could Cost You A Lot More Than $185K

4/21/09 Pool.com Starts Accepting Pre-orders For Domain Extensions That Don’t Exist

6/1/09 Hate UDRP’s: Say Hello To Something Much Worse, The Uniform Rapid Suspension System (URS): Get Ready To Lose Your Domains

6/1/09 ICANN GuideBook 2.0 Comment Report: Still No Price Caps

6/2/09 The ICA’s Take On The Uniform Rapid Suspension & What’s it’s Going To Do About It

6/4/09 Verizon Testifies To Congress Against the New gTLD’s

One year in and my resolve was still that the new gtlds were not the right call.

There are lots of companies lining up to sponsor a new gTLD’s

But Verizon’s point is the same as the point we have made before, there is little to no demand from consumers; those wanting to operate websites using the one of the new gTLD extensions. Demand from suppliers is a whole different matter than demand from consumers.Hopefully, Congress can see that difference in their analysis, and support having ICANN drop the plan altogether, as many non-domainers have called for .

6/6/09 .NYC Is A Hot Commodity 

We said back then: Most of our stories about the new gTLD’s are negative, as we think the releasing of hundreds or thousands of extensions are trouble for the net.

However, there are definitely some of the new proposed extensions for which there is a lot of interest.

7/25/09 Does The Internet Need A Non-Profit Extension? .NGO Is Proposed

7/30/09 Front Running On Proposed g’TLD’s: Companies Are Getting Trademarks On g’TLD’s

8/10/09 The Battle For .Eco & Just One Example Of The Nightmare ICANN Is Creating

2/14/10 2 Hours On The Panel Its Clear That The New gTLD’s Are Just About The Money

3/13/10 Our Prediction: Who Will Make The Most Money Off The New Extensions? Hands Down, Godaddy.com

6/6/10 ICANN Predicts 500 new gTLD Applications & A $2M Profit, but It’s Budget Is Flawed

We called out ICANN for not including any anticipated revenue for new gTLD auctions.

11/11/10 Our Take On The ICANN Registry/Registrar Decision: The Big Guys Win/The Small Guys Lose

2/21/11 House Rep. Promises Hearings On New gTLD’s: “We Want To Ask Them Why It Is Necessary & Important To Do That”

3/15/11 RIGHT OF THE DOT.com, My Take On The New gTLD’s: The Next 25 Years & How You Can Profit

Monte and I formed Right Of The Dot.

At this time its became quite clear to me that the new gTLD’s were going to be a reality and felt that I needed to be involved.

I was not the only domainer to come to that conclusion.

As we all know now Frank Schilling jumped into the space in a big way applying for more than 50.

Radix which is owned by the Directi/Skezno folks applied for 31

Jay Westerdal applied for several as did Ray King.

Other domain investors have invested into new gTLD’s behind the scenes.

As for myself I own over 75,000 domains I always found it strange how people thought that I would be hoping for the failure of existing extensions and the 75,000 domains I own when owning none of the new extensions.

So simply put, my involvement in the new gTLD’s is a result of the program, not my desire for the program.

My message throughout the 5+ years New gTLD’s has been they have  the potential to be a disruptive force to domain name space as we have known it  for over 25 years.

If they are coming and if you’re in the domain business you better figure out a way to get involved, because you think it will be widely successful or just as a hedge against the domain assets you hold.

Plain and simple.

If you want to go back to the record you can check out some more recent posts

The Top Policy Mistakes ICANN Made In The New gTLD Program

1and1.com New gTLD Pre-Registrations Blows Past 2 Million, Setting Off gTLD Pre-Reservation Panic

We talk about what a “pre-reservation” actually means and call out 1and1 for creating a problem down the line due to lack of disclosures.

How Premium New gTLD’s Might Help Sell Your .Com Domains

We talk about how new gTLD’s are presented in search results for available domain names and how the pricing of the early ones might give a boost to the sale of owned premium .com domains

UK Bans 1and1.com New gTLD Commercials As Being “Misleading

We point out we said all of this in our first post about 1and1.com commercials.

Is ICANN Going To Hold Registries; The $25K .Sucks One To What They Said In Application??

We call on ICANN to hold one applicant’s feet to the fire to the application they filed compared to pricing of their .sucks domains

Shocking; ICANN May Make Money Off The New gTLD Program

Yup we call out ICANN again for its accounting of the program

Anyway you look at it for better or worse, after over 5+ years in writing about the new gTLD they are here.

2014 should be a very interesting year.

We at TheDomains.com want to thank everyone for the support throughout the year and we wish all of you a health, happy and prosperous New Year.

Comments

  1. says

    Hello MHB,

    Fantastic !

    Because of the gTLDs being marketed, People are really focused on the differences and are really kicking the tires of the .COM Franchise Business Model.

    The Strategic .COM Business Model is a many faceted Gem. Once all the smart money Capital Markets Experts, realize all the angles, their vision will become very clear. Their vision coming into focus,will push valuations to levels only Rick Schwartz and Frank Schilling forsaw many years ago.

    P. S. The Investors Business daily( Institutional Capital Markets Experts) are listening in and many of their subscribers, are positioning themselves.

    Gratefully, Jeff schneider (Contact Group) (Metal Tiger)

  2. Raymond Hackney says

    I am real Kevin, Mike had mentioned in one post that one day he was going to take a look back, and one night I told him I would compile a lot of data for him and put together a timeline. So I did it under a post with me logged in and saved as a draft. So I compiled the data and wrote a few lines but the majority of the editorial content is Mike. I was just helping him out with a post that was a big project and since he leads a much more exciting life than me I did the grunt work.

    Happy New Year to everyone reading, Health and Happiness.

  3. says

    first the article was too long so I didn’t read it.

    second I think the whole new tld scam is a pyramid scheme.

    third I really appreciate your blog and your multi daily emails which I read avidly.

    thanks and keep up the good work.

    chris

  4. says

    … Had to comment back to Seymour.

    “and then ask. why is Rick Schwartz and Frank Schilling selling their dot coms? and according to Ricks blog he’s not planning to invest much in them either”

    … Why? Because why does he need to invest more? While it’s not a perfect example, consider someone who bought 100,000 shares of AAPL at $1.90 back in the 80′s. Would they really be buying more AAPL at $560 a share? Or would they be moving some of that money into cash?

    It’s not a perfect example — but when you hand registered something like eBet over a decade ago and then sold it for > $1 million — you’ve already got all the best deals sitting in your portfolio. You bought at the lowest and now it’s time to sell high to the people who didn’t think to buy early.

    Best wishes for a great 2014 to all.

  5. says

    Seymour, I’m not sure I follow your logic.

    When a vision comes into focus, that would seem to be the right time to sell.

    I don’t know Rick (obviously) though I read his blog occasionally. It seems to me he has a very smart and reasonable strategy of selling when the absolute right offer comes around. As far as I’ve seen, Rick is definitely not off fire-selling his names; when the right offer comes, he works it and takes it. There’s something to be said for the “Deal or No Deal” strategy of keeping your case forever, never looking inside … or taking the right deal to maximize your profits.

    He bought many/most of his names when people did not see as much value in names. He’s in the catbird seat. For sure, “Now” it is much much harder to find good deals on great names. Most people know what they’ve got and they’re not giving up a great one word .com for pennies anymore. IMHO, when he’s got an inventory full where his average cost is only a small tiny fraction of the absolute worth, it seems silly that he would spend his time looking for “more” when all he can do is average his cost up.

    Just my view of his position and strategy. Clearly, you disagree and that’s cool. ;-)

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