By Ron Jackson
Editor/Publisher


Last fall as individual registrars started rolling out their own auction services for expiring domains, Pool.com announced a new Open Listing Service (OLS) that sought to bring multiple registrars together on a single exchange so that buyers would not have to track and participate in auctions at so many different locations. 

As the concept progressed, the organizers soon determined that an even broader purpose needed to be served by such an exchange. By April 2005, OLS has morphed into a new platform called GDNX (Global Domain Name Exchange) that serves as much more than just a marketplace for expiring domains. 

GDNX CEO Tony Farrow told us, �OLS and GDNX were designed as different solutions for different problems.  Over the last six months, significant growth in the secondary market has put more emphasis on the need for a service like GDNX, a stock market for domain names. Now more than ever, we need an effective mechanism to manage the secondary market, whether it is an expiring domain or one put up for auction by a registrant.  In fact, our experience with the OLS helped guide the development of GDNX."

Tony Farrow
CEO of GDNX
(Global Domain Name Exchange)

"At the ICANN meeting in South Africa (in December 2004) we focused on confirming the real registrant pain points,� Farrow said.  �What emerged was a need for a more transparent system, easy-to-understand interfaces and a complete view of domain inventories. These lessons were critical in building a solution to meet the needs of a secondary market, which is actually beginning to supersede the primary market. We needed to raise the bar and help develop an industry first � simple, standardized business practices.� 

Farrow explained, �by merging the resale, expiry and deletion industries of the secondary market in a stock exchange (bid/ask) format, GDNX offers a single, comprehensive solution. It legitimizes the market and provides members with a trusted, structured environment to buy and sell all top-level domain names without building many unconnected markets within the industry.�

At the moment the aftermarket remains splintered with multiple drop catching services operated by various drop catching companies and individual registrars. Farrow said, �the vision of GDNX is to prevent the market from further splintering while easing the entire registration process. By providing a virtual clearing house for the industry, GDNX can replace the current confusing, complex environment with simplified, standard practices that benefit all of its participants.  It�s also designed to preserve and protect existing relationships and contractual protections between registrars and registrants. The establishment of the GDNX also prevents the add/drop abuse of domain warehousing.�

One thing domain owners will like about GDNX are the low commission fees. The buyer and seller each pays just a 2% fee to complete a deal on GDNX. Most of the costs are underwritten by membership fees paid by participating registrars (who get to keep 100% of the proceeds from sale completed on their sites). As popularity increases for the platform Farrow anticipates high volume will allow GDNX to keep prices extremely low for buyers and sellers. 

In the past, Verisign, the operator of the .com and .net registries, has tried to corner the expiring domain market (the stillborn WLS being the prime example). Farrow still casts a wary eye toward the giant registry. �VeriSign continues to try to extend the reach of its monopoly,� Farrow said. �It is a bad choice for the total community of registrants, registrars and others who are building the value of the Internet.� 

Farrow added, �From the WLS to the CLS � a Central Listing Service � they have sought to lock-in domain name activity. Everything is not a registry service.  We strongly believe that registries have little to no role in this marketplace.  VeriSign�s CLS proposal is limited � it addresses the expiring domain space and for just two TLDs (com and net). It also doesn�t address competition within the auction vendors.  Registrars should be able to decide which auction service provider they wish rather then being forced to use a single solution such as CLS.  Without competition there is no regulation to enforce service, features and pricing. By serving the resale, expiry and deletion elements of the secondary domain name market in one transparent exchange, the GDNX can offer the most efficient solution with optimized valuations and significantly lower transaction costs.� 

All domain extensions are welcome on GDNX and Farrow said GDNX memberships are open to all ICANN-accredited and ccTLD-accredited registrars and in some cases even large portfolio owners. Members can list domain names on the GDNX at multiple stages of the domain name life cycle, both Active Market and Expired Market.  

In conclusion, Farrow said, �GDNX is an open exchange to bring together the largest possible number of buyers and sellers, and the largest variety of names and TLDs.  It ensures all domain name registrants and registrars are fully protected by existing trusted relationships and contractual protections, including those required by ICANN.  Through their member registrars, end users can access all available domains for sale and build other services such as valuation estimates. End users, through their member registrars, also have the option of three different formats to sell their domains: fixed price, auction and bid models.� 

In an industry where the tide seems to shift daily, Farrow believes GDNX has built a solid foundation that will stand the test of time.