For that
reason, three-letter domains have always been among the most
prized possessions in all domain extensions. Every one of the 17,576
possible combinations all disappeared in .com, .net and .org
long ago. Because of their popularity, the threes have been like a
"canary in the coal mine" for the new global extensions, .info
and .biz.
Miners
used to place a canary in the shaft and as long as the canary was
alive, they knew there were no poisonous gases around and it was
safe to go about their business. In the domain industry, many of those
evaluating the prospects for the new extensions felt comfortable ignoring
them as long as three-letter domains were still around and available
for a cheap registration fee. After all, if such a desirable domain
category was still untapped why get excited about the rest of the
namespace? Alarm bells are going off now because the domain
canary just died.
Heading into
the last week of February 2004, there were still thousands of
threes available in .info and .biz (the best combinations were gone
but as long as any lingered their very availability was a
stigma for the entire extension as far as many investors were
concerned). Then things literally changed overnight. On Monday,
Feb. 23, the last available three-letter .info domains
suddenly disappeared. 48 hours later, the buyer who was
responsible for closing out the .info category registered more than 4,600
domains in one day to wipe out the entire remaining stock of
three-letter .biz domains. Who was that masked man?!
As it turns out
he was no stranger. It was Thunayan K. AL-Ghanim, widely
known as Elequa, owner
of one of the world�s largest and highest quality domain
portfolios (encompassing approximately 35,000 domains). His
moves sent shockwaves through the industry but it probably should
not have come as such a surprise. He already held thousands of
three-letter .coms, .nets and .orgs before claiming about 2,500
three-letter .infos and the 4,600 .biz. Adding those .biz domains to
the 200 three-letter names he already had from the 2001 land rush
gives him close to 30% of the world supply!. Elequa
told DNJournal.com �three letter domains are the best
investment, They generally get more traffic than even rare
two-letter domains and who doesn�t type three characters even by
mistake from time to time?�
Though
he characterizes three-letter domains as a good long-term
investment, making an �investment� was among the last of
the many reasons why Elequa made those massive purchases. Since his
reasoning has thoroughly flummoxed observers on both sides of the new
extension debate, we will address that riddle first. Those who
believe in a bright future for .info and .biz were completely
surprised (but delighted) to see such a big name .com investor
entering their space. They believe he made a bold move that will pay
off in a big way down the line. Those who see value only in .com
believe that he wasted his money. After all, since .biz and .info
are so new there may be no type-in traffic for years to come, thus
no way to recoup his investment with pay per click (PPC)
revenue�and since Elequa has often stated publicly that he does
not sell domains, he won't be getting his money back by selling them
for a profit either. So what was he thinking?!
That
brings us to the crux of the matter. Elequa does not think like you
and I! We think about how to maximize PPC return on our investment
or the likelihood of a profitable resale,
or perhaps suitability of the domain for a commerce project that
would generate revenue from a website. In short we think like
accountants. He thinks like an artist (which he is � both a
painter and a sculptor). Elequa sees the Internet as one big canvas
and domains are his paintbrushes - the tools used to apply a rainbow
of colors (well-designed content) to his web canvas. He just stocked
his artistic supply closet with thousands of unique new brushes!
Elequa
told us �for the record this is not my source of income, it is
rather a hobby that has turned into a passion! People who
think I am planning to eventually sell don�t know how much time I
have spent in front of my PC putting together the pieces I want for what I plan to do. I am on track to a final destination and I
will get there!� The metrics we apply in search of a
paycheck are meaningless to someone who has a vision in mind and the
resources to turn that vision into a reality.
Elequa's
grand plan involves the eventual transformation of his Future
Media Architects (FMA) into the Internet equivalent of one
of today�s major television networks. The difference is that NBC-TV,
for example, produces programming that is then distributed by
hundreds of affiliated stations around the country. Elequa wants to
own the network and all of the affiliates as well. That is
why he is stockpiling so many domains (and so many easy to remember
three-letter names). �I am constantly coming up with new ideas and
I want to always have a wide range of domains on hand so I can
immediately select one that suits my purposes,�
he said.
It really
shouldn�t come as such a shock that Elequa would eventually add
new extensions like .biz and .info to his palette. After all one of
his first big developments was MP3.TV,
using the Tuvalu country code that is much despised among
domain investors as a �phony� global TLD (Top Level Domain).
Despite their disdain, he has done well indeed with a site that has
become a magnet for music fans.
It proves once
again that beauty is in the eye of the beholder. Many also view .biz
as an �ugly� extension, a slangy term not suited for serious
business. Elequa looks at the same term and sees something
�abstract� rather than ugly, an unusual hue that can be used to
make an attention-getting statement. Interestingly enough, as you
will see later in this article, some large businesses are starting
to look at it in that way too.
OK, so let�s
say you can learn to live with .biz. What about the �quality� of
a lot of those letter combinations he bought � all those Q�s,
Y�s, X�s and Z�s? While people in English speaking
countries see those as a lost cause, those who want to get on the
net in the rapidly emerging Asian markets would have a different
view. Q, X, Y & Z are commonly used letters there. Elequa has
always taken a global view of domains and that is why he took all of
the avilable threes in only the Global TLD�s while
leaving the diminishing supply of three-letter combos in the .US
country code untouched.
Anyone
who has visited an FMA site like DJ.net
or FMA.com
knows they are are uncommonly artistic developments. But for those
still struggling to get past the dollars and cents aspect of his
three-letter buying binge, this might help put things into
perspective. He registered about 7,000 .biz/.info domains for
a total outlay of around $40,000. As those who follow his
frequent purchases in our weekly Domain
Sales column know, it is not at all uncommon for him to
spend that much on a single domain.
This
time the expenditure allowed him to do something he loves more than
anything else � create. In this case he instantly created a
market by removing supply from the 3-letter .biz/.info
supply and demand equation. Even though as new extensions the demand
is currently relatively low, there is enough demand that when
you pair it with zero supply, prices start rising. Average
high bids on three-letter .infos have roughly quadrupled at Namewinner
in recent days (Namewinner does not chase .biz drops).
Where other
tycoons have tried to create and corner markets to make a financial
killing, Elequa had different motives. �I saw a market could be
created - so I created it!� he said. At the same time he
created a windfall for current holders of similar domains and
annoyed a small cadre of .com aficionados who see any
.biz/.info success as a threat to the value of their domains. In our
opinion, new extension success will have little impact on .com
values. We see a tiered market developing, just as there is in
virtually every other product category. There are luxury cars,
mid-range automobiles and low-end models. All can succeed because
there are people in the market at each level. As more and more
businesses and individuals go online they will want an option that
matches their needs and budget.
We have all
seen what Elequa did, now we can try to figure out what it means for
the market as a whole. Many are convinced that it will be looked
back on as an event of historic significance for the domain
industry. Richard Meyer of Washington, D.C. suburb Ellicott
City, Maryland has a respectable portfolio of his own (more than
5,000 domains in all major extensions). He told us �this is a
landmark situation and we were all sitting in the front row watching
it. It is something I will remember for many years to come. For this
industry, it compares to Nixon taking the U.S. off of
the gold standard. Most people don't realize what that meant but it
affects us to this day. It�s the same thing with the three-letter
names. It doesn't affect most people but it does affect the domain
business. I think this is the best thing that has happened
for .info and .biz since they went public�.
Certainly the
.info registry, Afilias,
and the .biz registry, Neulevel,
both welcomed Elequa�s interest in their extensions. They will be
even happier when they see live sites on some of his new domains as
both believe development is the key to long-term health for their
TLDs. Representatives from the two companies told us that just
over two years after their debut things are going very well. Of
course they would be crazy to say anything else publicly but
they do have some stats to back up their sunny dispositions.
.Info got out
of the gate first, debuting to the general public in September
2001. Heather Carle, the Afilias Director of
Communications said �since then .info has grown
to become the sixth largest TLD in the world with well over 1
million registrations. It was the the first generic, unrestricted
TLD to be launched since .com and it is being accepted worldwide.�
The weekly DNJournal.com sales reports show especially high interest
in .info in Germany and the registry�s stats back that up.
Carle said � Germany has over 22% of the total .info registrations
and a third of the 400,000 live sites currently online�.
Overall,
52% of .info registrations have been made in Europe with 39% in
North America. Carle said
�.info's have been registered for many purposes, however a large
majority of sites are dedicated to information resources such as
transportation, travel, media, causes, as well as teams and events.
Some examples are La Soci�t� de Transport de Montr�al
at STM.info,
the Spanish Tourism Board site at Spain.info,
Stanislaus County's media relations site for the Scott
Peterson trial at PressUpdate.info,
the Sanitation and Social Services Department of Qu�bec
site on West Nile virus at VirusDuNil.info
and the 2003 American Football World Cup
site at WorldCup2003.info.
Since
continuing development is part of Elequa�s big plan, Afilias is
happy to have him onboard the .info bandwagon. Though development is
the registry�s #1 priority, they can�t help but reveal a bit of
pride over the rising tide of .info prices in the aftermarket. Carle
said �We are pleased to see that individuals are placing a
significant value on .info
and look forward to it's continual development as the information
destination on the Web�.
Of
course we can�t let the registry have the only word on the
products they sell, so we contacted one of .info�s pioneering
developers, Dr. Robert Connor, to get his thoughts on where
.info has been and where it is headed. As a professor at the University
of Minnesota who has done a great deal of research on a variety
topics, we knew Connor would give us both sides of the story.
Connor, whose sites include Minnesota.info
and HealthInsurance.info
said �I was attracted to .info because it has meaning in many
different languages and providing information is a key
function of the internet. It is also a genuine generic TLD approved
by ICANN with no restrictions on registrant use and of course
the .com namespace was pretty crowded.�
Connor added, �The progress of .info is not as good as it could
have been, but it is a lot better than many people thought it would
be. There are some negatives. There was a rocky rollout with many
bogus trademark registrations. My August 2001 research estimated
that 15-25% of .info sunrise registrations were not for genuine
trademarks. This range was later confirmed by the magnitude of the
actions taken by Afilias to address the problem. Another problem,
perhaps related, is that many people are holding prime names without
developing them. They hope to get a free ride on increased .info
values from other people who do develop .info names. This holds back
the progress of the namespace.�
�However, there are also many
positive signs,� Connor said. "One is the growth in active .info
pages. In July of 2002, I did a Google search for .info pages
and it yielded around 750,000 .info pages, which was 1% of
the number of .com pages. In February of 2004, this same search
yielded around 4,500,000 .info pages, which is around 4% of
.com pages - a 400% increase. These overall stats are
supplemented by anecdotal evidence of .info use - for example, MTA.info
in New York, DontTrashCalifornia.info
in California, and Stop-Discrimination.info
in Europe. Another positive sign is the results of my poll of
133 domain investors from 34 different countries that shows strong
interest in .info, especially in Northern Europe. A third positive
sign is the upsurge in .info sales prices as documented by the
Domain Name Journal.�
Connor concluded �On balance, I don�t think that .info will ever
replace .com, but that its future as a viable namespace looks pretty
good. The registration of all three-letter .info domains is
newsworthy and will probably spark attention from people who buy
domains for resale. I also think that it is likely to yield a
positive return on the registrant's investment. However, I do not
think that it will be anywhere near as important to the future
progress of the .info namespace as the continued development and
public advertising of active .info sites.�
In
November 2001, two months after the .info rollout, .biz took
center stage. Domain name investors have not greeted .biz warmly
with a number of reasons stated for their negativity. Most don�t
like the term itself. The .biz registry, Neulevel, also has usage
rules aimed at preventing outright speculation in the names and
encouraging development. While the view among some industry insiders
is pessimistic, there is evidence that the real world marketplace
may have a different take on things.
We
just saw the most impressive display of .biz advertising we have
ever seen in the March 2004 issue of PC World magazine.
The huge web hosting company 1And1 has a 16-page
full-color section in the middle of the magazine with the URL
1And1.biz
plastered in huge letters at the bottom of every single page.
A call to 1And1 offices connected us with company public relations
representative Rob Halpin. He said the company felt that the
.biz extension would help catch the eye of their target business
audience and also help them stand out from the crowd. In fact, Richard
Tindal, VP Registry at Neulevel/Neustar, says many
clients have told registry officials that a desire to break out of the
advertising clutter is a primary reason they adopted .biz.
Tindal
also said that �in the last quarter of 2003 and the first quarter
of this year, the rate of new registrations is up 60% over
the previous quarters in 2003 and 2002.� When .biz hit its
two-year anniversary late last year many names dropped, temporarily
pushing overall registrations back under the one million mark, but
Tindal says they have now risen back above that level. He also said
that the overall renewal rates for .biz are comparable to
.com.
As
for who is using .biz domains Tindal said �the overwhelming
majority of users are small businesses (less than 50 employees).
Over 35% of the registered sites are being used and that is growing
each quarter.� Tindal added that half of .biz registrants are in
North America (a considerably higher percentage than .info) with 35%
in Europe and 15% in the Asia-Pacific region.
We
increasingly see anecdotal evidence of small business use of .biz in
our own neighborhood. An air conditioning company truck goes by with
a .biz URL painted on the side or we drive by a small business with
a .biz web address painted on the window. They are small steps, but
final destinations are reached one step at a time.
One
early .biz investor/developer we know is so convinced the extension
is headed for the big time that he goes to extraordinary lengths to
keep people from knowing what he is up to in the namespace. He sees
publicity as a surefire way to attract competitors. He agreed to
share his thoughts only if he could remain anonymous. We think he
may have read one too many Tom Clancy novels, but we agreed.
He said �I participated in the .biz land rush because I was
already very familiar with the day-to-day usage of 'biz' in my
industry and could see the extension's instant connection with and
relevance for specialist B2B sites. Nestle.biz
is a good example of this.�
He
went on to say �developer interest in the .biz extension has been
encouraging. Do a Google search on �site:.biz
biz� and you will see what I mean. .Biz has held up
surprisingly well so far despite all the doom-and-gloom criticisms
leveled on it by domain speculators. Mainstream exposure by sites
like Billboard.biz
are kicking in to the surprise of these every same critics. In
my mind, the issue for .biz is not whether it will become a
respected extension embraced by the business community en masse, but
when. It is definitely looking like sooner rather than
later.�
Regarding Elequa�s buys our
undercover .biz developer expressed the hope that he will one day
see those domains go live. In any case he said �the fact
that a big player has "endorsed" the extension shows there
is glitter in the haze after all.� Elequa probably
couldn�t have put it in a more artistic way himself.
*
* * * *
Editor�s
Note: For those who would like to comment on this story,
we invite you to make use of our Letters to the Editor
feature (write to editor@dnjournal.com).
If you missed our previous Cover Story click
on the headline below:
Rick
Schwartz: Domain King or Royal Pain?
All
other previous Cover Stories are available in our Archive
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