Elliot Noss, the President and CEO of Tucows has responded to our post of a few days ago regarding the YummyNames.com, the site Tucows set up to sell some of the domains it acquired from it’s customers after they expired.
The comments from Mr. Noss are unedited.
Our comments will follow but feel free to comment:
“””””I wanted to weigh in here and provide my view very specifically. apologies in advance as I am famously long-winded (stop laughing berryhill)
first. what do we do? we have been very open in what we are doing, what our grace periods are and how we implement them. we have been open about it since we started in 2006. we review names for brandability and revenue potential. we provide, if I am not mistaken, the longest grace periods in the industry and, again I believe, are perhaps the only registrar to honor redemption grace period on names other than as dictated to us by the auction providers. I would note here that in negotiating with the auction providers (and we have spoken to all of them) they are clear that they are not interested in us allowing an auction to be subject to a grace period for the benefit of the original registrant.
after the grace periods we retain names in our discretion. what we do not choose to retain (I believe this to be over 98%) goes to auction. what does not go to auction is dropped.
I would note that our grace periods and our specific practices are clear and available. we do not play hide the peanut. we do not have sister companies that take ownership. we understand many other registrars are a little more opaque in their practices.
second, in my view there are only two differences in what we are doing and what a registrar who has all their names flow into auction is doing. before the differences though, the more important point, as many of you have noted, is the similarity, that the registrar is capturing the excess economic value.
the two differences are timing and path. in terms of timing, a registrar who sends to auction sells the name to a wholesaler who will then either keep it in a large portfolio for revenue or wait for the best-use end user to buy it. most often both are true. the registrar gets money immediately at what will usually be a lower level than if sold to an end user directly. the registrar trades money for timing and certainty. by the way, after doing this for three years what we are doing may or may not be better.
the other difference is path. in an auction the domain most often flows through a domainer before reaching an end user and will sit in a domainer portfolio collecting revenue in the interim (or not), just like it sits in our portfolio.
third, I think it is instructive to look at the history of the drop. there have been three clear phases, the wild west, the primacy of the auctions and the last couple years.
in the wild west guys like scott day, gary chernoff and frank schilling flourished and those who knew the secret handshake benefited.
in the primacy of the auctions guys like rob hall, paul stahura and clint page flourished and there was a higher degree of standardization, but not if you were the registry (who got hammered) or ICANN (who were inundated with hundreds of “registrar” applications from the same entities in an orwellian arms race).
the situation of the last few years is a further evolution with the markets becoming more efficient.
the one thing I will guarantee going forward is that the market for secondary domain names will continue to evolve and will continue to evolve towards efficiency. I will also note that in rapidly evolving markets smart entrepreneurs skate to where the puck is going. when the market evolved from stage one to stage two scott, gary and frank did not whine and complain, they figured out how to thrive in the next phase. when it evolved from stage two to stage three, rob, paul and clint did not whine and complain. they figured out how to thrive in the next phase. people who look back on how rapidly evolving markets were and try to legislate or wish them back in to existence are sort of like the music industry looking at the Internet.
an interesting historical note. we were one of the last registrars to get into taking advantage of expiring names. in 2004, before NSI launched their original snap names auction for their expiring names, I tried to get the registry and the large registrars to agree on a framework not unlike some of what was discussed above. in that framework I stressed the rights of the original registrant. I was met with derision from registrars and domainers, greed from the registry and apathy from registrants. it was only long after it was clear to me that I would be unable to effect change in that direction that we went down the path we did.
lastly, I think this whole issue is a sad distraction. registrars and domain owners (and we are both) have common cause in two respects, registrant rights and fighting against overreaching IP interests. Tucows has an unmatched record on these two issues. you did not see our names handed over to the state of kentucky.
we have spent more time, money and effort on transfers, whois and so many other registrant rights issues from the dawn of competition than any other registrar. both the ICA and the ALAC recognize that. we have spent more time and money fighting IP interests inside of ICANN and the courts of two countries (and of course in UDRPs) than any other registrar. we have the most generous grace periods, the fairest and most transparent transfer rules and, by the way, some of the VERY largest domain holders as customers.
I am more than happy to dig into this stuff deeper. I have no doubt many who are here disagree, but at least hopefully this will help us focus on what it is we disagree on.””””