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(Editor's
Note: The .fr
extension (the official country code for France) recently
begun a deregulation process. The formerly tightly-restricted TLD
belongs to a country of 11 million Internet users and represents one
of the world's largest economies. The first stage of deregulation
extended registration rights to any French-registered organization
(previously one needed to demonstrate Trademark rights before being
able to register a domain); the second will open registration to
anyone with a French address (like Germany's .de, foreigners
will likely be able to register .fr domains through a proxy
program).
To tell you how the liberalization of .fr will impact the French
domain market and what new opportunities might result, Francois
Josse, the Country Manager for Sedo France teamed up with
Meredith Croyle, a senior broker on Sedo.com's English team,
to produce a new article on France for our ongoing "Domains
Around the World" series.)
Introduction
While
the .fr registration liberalization is great news for French
companies and residents wanting to register
their ccTLD, the main questions for the secondary market are
(1) will a .fr market develop? and (2) will this liberalization
encourage awareness of the secondary market in France in general?
The answer seems to be buy and park now, sell later, and
we�ll have to wait and see.
Overall
Structure
The
.fr ccTLD (including .tm.fr, .asso.fr, .nom.fr, .com.fr, .prd.fr,
and .presse.fr ) is operated by French
Network Information Centre (AFNIC), a non-profit association,
governed by French law. Registration of .fr domains has been highly
regulated with AFNIC�s aim being to maintain �the Internet with
confidence�. In line with this policy, AFNIC has placed heavy
regulations on .fr domain ownership, which reflects their aims to
keep the .fr ccTLD French-specific and maintain valid ownership
identification records.
While
these two aims are certainly admirable, the heavy regulations have
resulted in a virtually non-existent .fr market, with regard to
registration as well as buying and selling. In response to internal
demand for more liberal .fr regulation policies, along with ccTLD
success in a number of other European countries, AFNIC has decided
to liberalize .fr registration. This liberalization will take place
in 2 phases. The first phase went into effect in May 2004, and
involved the opening up of .fr registration to any registered French
organization. The second phase will open up .fr registration to all
French residents.
A
Brief History
In
the past, .fr domains could only be registered by entities located
in France. Furthermore, companies were limited to registering
domains reflecting a company�s official, legally documented name
and/or trademarked term(s). In addition, AFNIC strongly discouraged
the buying and selling of domains. Their aim was a .fr TLD only
applicable to French companies with legitimate, legal claims to a
domain. The resulting stunted growth of the .fr market might also
have been a factor influencing generally negative perceptions by the
French public of a for-profit domain market. On the other hand,
AFNIC�s strict regulations could be a result of that perception- a
classic chicken and egg scenario. Either way, we are left with two
main characteristics of the secondary market in France: (1) there is
currently little movement within the .fr market and (2) low
awareness of the secondary market among the general population.
French
Market Share
Currently
French domain owners tend to favor gTLDs over their own ccTLD
as a direct result of AFNIC�S heavy regulation of .fr registration
and transfer. Consequently, with little movement in the secondary
market in general and even less in the .fr market itself, France
markedly lags behind other ccTLD secondary markets such as .co.uk
and .de. Historically, .fr registration has been about 2.5% the size
of .de registration and 3.9% the size of .uk registration (source: zooknic.com).
With .fr liberalization, more companies and individuals will
be able to register .fr domains, so these numbers stand to change in
the near future. Considering that France has one of the highest
percentages of Internet users in Europe, the comparatively low
number of .fr registrations suggests a ccTLD market just waiting to
take off.
Figure
1: Growth in the number of .fr domains registered - Note
the sharp increase following liberalization.
Source: http://www.afnic.fr/actu/stats/evolution
Secondary
Market
However,
it could be quite a while until these numbers really take off and
translate into the development of a secondary .fr market. Lets
consider a sample timeline: .uk domains were first used in
the 80�s followed by the creation of Nominet
to oversee .uk registrations in 1996. Considering that the .uk
market has been liberalized since its inception and is just now
really taking off, those looking to buy and sell domain names would
do well to register now and sell later. Most significantly, Nominet
never discouraged buying and selling of .uk domains, while AFNIC
will basically not approve a transfer if money is known to be
changing hands. There is no indication that AFNIC will be changing
this policy of discouraging a secondary .fr market.
The
Future and .fr Parking
As
the secondary .fr market could take some time to get going, parking
.fr domains is a great intermediary option. Since the 1st phase of .fr
liberalization was put into effect, the number of .fr domains parked
with Sedo has grown by over 150%, with revenue growth up 300%!
Once the 2nd phase of .fr liberalization is implemented and .fr
domains begin to be registered in greater numbers, parking could be
the perfect solution for those waiting to develop their .fr domains
as well as those waiting for the .fr market to develop further.
Sedo�s parking program combines geo-targeted language-specific
landing pages with a rapidly growing number of French advertisers to
make sure that each visitor sees relevant ads in his own language.
Even if your familiarity with the French language is limited to bad
memories from high school French class,
Sedo�s optimisation technology will automatically select the right
keyword as long as you�ve put the domain in the correct catalogue
category on our website.
Sedo
is working hard to expand awareness of the secondary market among
potential French domain buyers and sellers. Along with the .fr
liberalization, we will continue working to raise awareness of the
opportunities in the .fr market as it grows and develops. Already,
our .fr parking
program has shown incredibly strong growth, and we plan to see
that growth continue. Moreover, .fr domain sales overseen by Sedo
have increased dramatically as well. The past six months have seen
over 20 .fr sales, a huge leap forward considering that the entire
18 months prior saw only three .fr transactions. Despite this
growth, the number of .fr sales still trails French-language .com
sales, and 20 .fr sales pales compared to 116 .co.uk sales and a
whopping 1,330 .de sales during this same six-month period.
On
the positive side, the fact that the .fr secondary market is in an
early stage means that it is a great time to get good deals on
purchasing .fr domains. In our chart showing a selection of recent .fr
sales, we see that in the .fr extension even very valuable
commercial terms such as �cigarettes�, �Alps�, �market�,
�condom�, and �pearls� have been selling for low four-figure
and even three-figure amounts. In the .de or .co.uk TLD, these same
terms would most likely sell for amounts well in to the
five-figures. For example, party.co.uk sold at the same time
as party.fr for 15,000 GBP. (The French word for �party�
is f�te, but many French recognize the word �party� as well.)
Compare 1,100 EUR for Hostels.fr to the $4 million
paid for Hostels.com (including the developed website and
business) back in 2003. (Again, it should be noted that the French
word for �hostel� is auberge de jeunesse, so language of the
term was naturally also a factor.)
FIGURE 2: Recent High Profile
.FR Sales
|
DOMAIN
|
PRICE
|
DATE
|
Meningite.fr (�meningitis�)
|
$16,047
|
12/04
|
Cigarettes.fr
|
� 400
|
9/04
|
Alpes.fr (�Alps�)
|
� 4,000
|
2/05
|
Marche.fr (�market�)
|
� 1,600
|
10/04
|
Hostels.fr
|
� 1,100
|
12/04
|
Preservatif.fr (�condom�)
|
� 580
|
9/04
|
Party.fr
|
� 800
|
8/04
|
Perles.fr (�pearls�)
|
� 400
|
9/04
|
Source: Sedo.fr Recent Sales Data
|
Conclusion
With
the .fr market
opening up, opportunities for quality new registrations will be
numerous, while opportunities to sell might be a longer time coming.
Again, this is a result of low secondary market awareness in France
and that market�s discouragement by AFNIC itself. So the moral of
this story may be register/ buy and park now, sell later.
Our thanks to Francois
Josse and Meredith Croyle for their work in producing this article. If you would like to comment, write [email protected].
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