January 2008                 DNJournal.com               The Domain Industry News Magazine

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Bulletin: ICANN to Kill Domain Tasting

ICANN is about to effectively end domain tasting. The minutes from the most recent ICANN board meeting have just been released and long-time ICANN observer Brett Fausett immediately spotted a major policy change that should stop the controversial practice. Fausett wrote on his widely respected Lextext blog that "the ICANN Board passed a new resolution that will impose ICANN's per name fee on all new registrations, regardless of whether they are deleted in five days. This ought to stop domain kiting dead in its tracks. Why? It changes the economics of tasting. Four-day names now come with the same ICANN fee as 365-day names. The resolution does not say when it will take effect, but you can imagine it will be soon." 

I am personally happy to see ICANN take this action (the vote was unanimous) as I believe domain tasting is an unintended wholesale abuse of the five-day grace period that has given the entire domain industry a black eye. While no

Attorney Brett Fausett
reported ICANN"s plan to end domain 
tasting on his Lextext blog Jan. 29

implementation date has been set, Fausett said the latest date it would begin is with the next budget cycle, starting on July 1, 2008.

  

Could a Recession Actually Be Good for the Domain Business?

Believe it or not the answer may be yes. I say that after seeing how the mainstream press jumped on the news that $3.1 million worth of domains were sold during the SnapNames Live auctions at this month's DOMAINfest Global conference in Hollywood, California (our complete wrap up of this event will be published on our home page by the end of the week). 

At a time when the general economy appears to be headed for (or is already in) a recession - and the real estate market is basically in a depression - writers could not resist a story about a corner of the economy that is booming despite uncertain financial times that are derailing a lot of other businesses. That bright spot in an otherwise dreary landscape is  of course domains - the world of virtual real estate that has been on an unbroken tear for over four years now. 

Within hours after DOMAINfest ended, the Los Angeles Times (free registration required to read) had a very positive story in print about what had just gone down across town at the Renaissance Hotel where the web's land barons had just finished a three day meeting. Fortune Magazine writer Paul Sloan (who 

If the domain business continues 
to flower in a harsh economic 
environment, mainstream media will
spread the news.

was part of a panel discussion I moderated on the closing day of the conference) quickly followed with an article called "Are Domains Recession-Proof?" As soon as I got back home I got a call from New York Times technology writer Brad Stone who is also working on a piece about the domain boom. Still another article popped up in Australia's Sydney Morning Herald with the same theme - domains are rocking while everything else is rolling over. 

All of this positive attention is why I think it is possible that in the long run, a recession in the general economy could be beneficial to our business. Sure, many mainstream articles have been written about domains in recent years, but if this industry is able to continue thriving in bad times reporters will flock to the story like bees to honey. The upcoming T.R.A.F.F.I.C. West conference is likely to accelerate this trend as they have a live auction scheduled that is loaded with powerhouse names that are sure to generate sales that will turn even more heads. 

Real world real estate has tanked but buyers are 
still flocking to live domain auctions to buy virtual real estate. Scene above is from this month's SnapNames  Live auction at at DOMAINfest in Hollywood, CA

As these mainstream articles start popping up everywhere, the man on the street will finally learn what domains are all about. They will learn what we have known for years - that good domains have been phenomenal investments, that as ecommerce platforms they strip away much of the high cost of doing business, that they are the cornerstones of new media enterprises that are turning the traditional media world upside down, that those with targeted traffic are unparalleled tools for converting sales and bestowing mind share "ownership" of entire classes of good and services (a la Hotels.com, Cars.com, etc.). I could go on, but you get the idea. 

Certainly we may see some hiccups along the way in 2008 and there are a lot of forces still in play that could impact this business negatively, but at this early stage in the new year, I am feeling optimistic about the near term future and certainly feel blessed to have my boat docked in what may be one of the few safe harbors out there right now. Just a few years ago who could have ever dreamed that the speculative world of domain names would come to be viewed as a safe haven when other investments are turning sour? That is how the outside world is starting to view us and that is a very exciting turn of events that bodes well for those who have invested their time and money in this space.

The Flip Side of Coin: Those Who Are Getting Hurt Will Want To Take What You Have

As domains continue to display their muscle a lot of people who missed the opportunity domain investors saw and acted on years ago are now bent on getting their hands on those assets and if they think they can do it without paying fair market value for them, they will certainly try. In fact, in a   recessionary economy they will try harder than ever as they will have a greater need for new income streams. 

Whether it be reverse hijackers, over-reaching trademark interests or common cyber-criminals, a lot of eyes are on the prize - domain names. Organizations like CADNA (The Coalition Against Domain Name Abuse) are lobbying right now to try to get laws changed to make it

easier to take away domain names. A favorite tactic being used by those who covet your assets has been demonizing all domain owners, not just those who are guilty of TM infringement. There are also efforts afoot to change the UDRP process - whatever it takes to put you at a disadvantage in the battle that is looming ahead. 

As I noted in last month's newsletter when I detailed how the Internet Commerce Association was formed and who was involved, it is fortunate that a handful of people in our industry recognized the threat at hand and helped organize a viable trade group to represent the industry (in the interests of full disclosure, I am currently on the ICA's board of directors but was not one of the founders). The ICA has a full-time Legal Counsel and experienced Washington D.C. lobbyist in Phil Corwin and a well-known and respected Executive Director in Michael Collins. They are the only paid employees of the non-profit ICA and they are keeping an eye on and acting to try to counter any proposed measures in the U.S. Congress and before ICANN that are harmful to domain owners.

ICA Executive Director Michael Collins and 
Legal Counsel Phil Corwin seek support for the 
industry's trade association at DOMAINfest Global earlier this month.

However, without broad based participation and financial support from everyone in the domain community the ICA will not have the clout and resources it is going to need to stand toe to toe with the much better financed and organized opposition. It may not even have the resources it needs to continue beyond this year because the original founders (who have donated more than half a million dollars out of their own pockets to get the ICA off the ground) are not going to be able to continue paying the freight for everyone else - nor should they be expected to.

Corwin and Collins talked honestly about the need to act now during a 

session at DOMAINfest Global last week and they will appear again at T.R.A.F.F.I.C. West in Las Vegas in February (they will be arriving there fresh off a trip to the ICANN meeting in India where they will make sure your interests are being looked after with the web's governing body). If you haven't done it already, I hope you will give them your support at T.R.A.F.F.I.C. West or, if you can't be there, by contacting Michael through the ICA website at InternetCommerce.org

This is not a closed organization for industry insiders. It was founded to give everyone a way to get involved and work together to collectively defend the rights and assets of domain owners. Anyone can join and if you are so inclined, run for president or another office in the association. Regardless of the role you wish to play, the critical need is for us to all play - otherwise the game will surely be lost and quite possibly many livelihoods along with it.  

Those who know me know that I am a natural optimist, but unless we band together and collectively fight to preserve our rights and assets we could be undone by threats that in my opinion are far greater than any recession could be. 


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