In the domain of the daft

Many moons ago I was responsible for internet domains for the bit of News Corp I worked in. This was more accident than design: I suggested we needed to register a few domains defensively and they told me to get on with it.

Because of this I couldn’t avoid getting embroiled, until I gratefully handed the job over to someone else a few years later, in the outer edges of the quite politicised world of domains, and as my involvement straddled the creation of ICANN I saw the whole thing descend into a horrible mess of vested interests and an almost total absence of any focus on what users and customers actually need and want.

This is exemplified by the creation of new Top Level Domains. In the beginning (at least when I was doing it) there were really only three “generic” ones – .com .net and .org (and a few others like .edu .gov and .mil which were only available to very limited categories of organisation).

These carried with them some guidelines about what they were supposed to be used for, all of which were routinely ignored. There were and are also “country code” domains – .uk .fr .de and so on – allocated to individual countries and administered however they fancied.

The thing which brands owners realised, in my case early enough to avoid major problems, was that in order to prevent someone else registering a domain which could be used to damage your brand or which you might want to use in the future, you needed to register it yourself. This was far cheaper than trying to sort out problems later. So most companies and brands have lots of domains registered, including common mis-typed spellings, very few of which they actually use other than to re-direct to their actual websites.

The birth of a scam (aka new gTLDs)

Since domain name registration is a commercial business, those in it realised they were on to a good thing here. If customers are forced to massively over-buy the thing that you’re selling, you’re on to a winner. Conversely, if you can register a domains which you think someone might be interested in later, you can sell them on for a massive markup. So domain speculation became an industry too.

The disconnect between what’s good for domain owners, users and the domain business is becoming obvious already.

The problem was that with so few “generic” TLDs (only one of which – .com – really matters) the opportunity to keep on selling hits a wall at some point. Supply is constrained. This created a nice secondary market – even mundane domains these days have to be purchased from speculators at massive mark-ups. But it doesn’t sustain forever.

So ICANN, the body which oversees such things, started to create new TLDs. You might have heard of some of them – .info maybe, or .name? .mobi, conceivably? .xxx but you wouldn’t admit it? But probably rarely used one knowingly. Especially not the last one. If you register domains for any brand, you probably have a few kicking around, doing nothing and costing money.

Of course someone trying to protect their brands needs to give serious thought to registering every time a new gTLD is issued, just for the sake of an easy life and to avoid nasty problems. Ker-ching! Good news for domain registrars (they have also developed a variation on the scam whereby brand owners can get first chance to register, for an inflated fee of course, when a new domain is launched). Good news for the small number of people and companies who need a domain and genuinely can’t get hold of any version of it for their use. Terrible news for brand owners and everyone else, for whom the change makes no difference at all except increasing costs.

ICANN, pushed along by the vested interests of the domain registration industry (and their own need to continue to exist and charge fees, no doubt) has been slowly issuing new gTLDs for a few years. But it’s still a pretty small list – only 22, some of which are restricted to certain industries.

A wizzard wheeze

So they came up with the excellent wheeze of opening it up much more radically, letting anyone apply to register any word as a gTLD. The fee is steep – $185,000 just to apply versus a few dollars for a standard domain (ker-ching! – they got 1,930 applications bringing in a cool $241,250,000). The ongoing fee is at least $25,000 per year (ker-ching!). And the cost to anyone wanting to protect their brands is whatever the new registrars want to charge (ker-ching x 1,930!).

They announced the list of applicants today and it makes for depressing reading. Far from opening the market up and removing bottlenecks, it reads like a series of land-grabs by speculators and over-ambitious mega-corporations with way more money than sense.

Here we have Google, staking its claim to 101 new gTLDs – at a cost of over $18m (ker-ching!) including such core Googley ones as .love .boo and .gmbh.

Amazon would claim to own .news .wow and .you among a total of 76 ($14m – ker-ching!).

And who is this? Top Level Domains Holdings Ltd – a listed company focused on exploiting this space. 92 domains ($17m – ker-ching!). Have you ever heard of Donuts? They made 307 applications ($56m – ker-ching!) via a series of subsidiaries and have raised $100m to exploit this new market. They clearly see gold in them there domains. It’s a goldrush!

Who wins?

So how is this good?

Well, one good thing is that domains are finally now available in chinese and other non-roman alphabets. Definitely a good thing – the internet is global after all.

Other than that, it’s kind of hard to see much to be happy about. I’m not sure the average internet user will be rejoicing at the plethora of new sites and services on offer (not least because this will create new addresses for sites, not new sites), and as now will probably barely notice the domain having clicked through from a search engine.

Some claim that this is a huge opportunity with “limitless” opportunities but I can’t see how any of them are enabled by the new gTLDs (Canon, for example, could give all their customers a website just as easily on a domain if they really wanted to). Maybe a few new ideas will emerge, but it seems unlikely that this will herald a new age of wonderousness and expansion for the internet.

Let’s hope this fails

To me this is just the perpetuation of a scam. The domain name registration system went very badly wrong at an early stage, and it can be traced back pretty directly to the inception of ICANN which totally failed to bring any sensible oversight and allowed this mess to develop (but, hey, they got sent nearly a quarter of a billion dollars today, so they will doubtless be able to smile through the pain).

I only hope that this whole fandango is a disaster and most of the money spent will be lost. A massive oversupply doesn’t usually do much for markets which have thrived on (relative) scarcity, so perhaps the best we could have hoped for is what has happened – so many new TLDs that they all become worthless.

Sensible companies will now increasingly decide that rather than trying to protect their brands by registering in every TLD, they should just ignore most of them. Just like many of the existing 22 TLDs, if they’re not used they will just not be relevant. If they become the homes of cyber-squatters and scam artists then they will become a badge of caution and users will avoid them.

What on earth ICANN will do with a quarter of a billion dollars remains a  mystery. But I’m sure they’ll have fun doing it.

The best outcome, I’m afraid to say, is that most of the money spent today turns out to have been wasted, the companies who wasted it will collapse or lick their wounds and move on, and we’ll stop the absurdity of having a centrally sanctioned and organised scam at the heart of the internet’s infrastructure.

And I’m very glad I don’t manage domains any more.

(With apologies for drifting a bit off the subject of copyright)

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