Mike O'Connor shared a link.
badge icon Admin · 6 January 2019 ·
I humbly submit my old friend Rick's latest post for consideration by a) any committee working on the "next round of new gTLDs" question and b) anybody working on an ICANN budget/finance committee. I completely agree with his conclusions and am envious of his Bad Attitude.
My First Ever Review of all Top 10 New GTLD’s. PLUS The List of 350++ New GTLD extensions that will go BYE BYE!! The Birdie in the Mine is DEAD!! | The Domain King® RICKSBLOG.COM
This was the 4th largest recorded cash domain sale ever! (Purchased for $42,000 in 1997) It is important to note that this domain had career earnings in excess of $15 Million via pay per click earnings and never had adult content)
66 23 comments
Bill Manning icann could do great things if it dumped its registry business.
Barry Shein As anyone who knows me knows I was always skeptical of this gTLD round.
1. It seemed to have no actual purpose, just a mindless land rush "because we can".
A purpose might have been, for example, addressing the real world fact that trademarks are based on using a name in trade AND associating that name with a product or service. Which is why there's no problem with Delta Airlines and Delta Faucets co-existing, no likelihood of product confusion.
Not only was this ignored but the nGTLD program actively worked against any such solution by creating the TMCH which allowed a TM holder to block (e.g., by first refusal) other potential TM holders with absolutely no regard to product or service category. And more subtly URS etc. and "premium" domain names worked similarly against this potentially useful goal.
2. $185K was far too little, it was a number cooked up by a table full of people who by their makeup imagined they could come up with $185K but was sufficient to exclude others they didn't want in "the club" with little regard for the ecosystem per se. It was a membership fee.
That backfired horribly when entities who could toss around $185K like it was lunch money showed up, pushed the system into auctions, and in many cases locked out those who thought $185K was reasonable, and in many cases thought they were pursuing a worthwhile goal, as TLDs went for millions (see my criticism of the article below.) 3. Premium names was a pure corruption of the system. I would love to see a disinterested, outside group review this.
I could go on, I often do.
I would criticize one major point in the article:
By turning gTLDs into a pure commodity with little purpose beyond a shiny thing some might like to own and trade (like beanie babies) their franchises were best modeled by a Black-Scholes model, essentially as bonds. So for example if an entity put $5M into a new gTLD and sold as few as 12,500 of them for (for argument's sake let's assume that's pure profit, if you don't like that double that number and assume 50% profit etc) for $20 each that's $250,000 or a 5% return which exceeds for example US 10Y treasury bonds by about double.
It was an easy annuity, in a phrase, thus favoring not entrepreneurship, innovation, or heaven forbid the interests of the internet community, but instead those who were just looking to park a few million in cash. I am sure that's how it was pitched to the monied interests who showed up.
Unfortunately I would try to explain this from the start and TBH generally be met with blank stares and drool dripping on shoes which convinced me this was an exceedingly amateur operation at least until the pros showed up and the feeding frenzy began.
My point is that the author's analysis misses the point by invoking a pure popularity contest analysis. Who cares? It paid better than a bond or bank CD, there was no real motivation to view it otherwise, so its fate was sealed. What caused this? That's easy. An incestuous governance structure almost completely dominated by would-be interested parties.
As I said, it backfired as money opened up chinks in this structure and the rays of light of reality blasted away the amen-chorus fantasies. 1
Richard Sexton What land rush? All they've done is lose money because the icann fees are about a million times too high and completely unnecessary.
Expanding a rent extraction scheme that 404'd half the net is of little marginal utility.
It's naturally contracting. In the end it was just a mess.
(Fade to Vader's theme)

Owen DeLong All of the gTLD rounds have had one purpose as near as I can tell... Build a giant ICANN slush fund.
Barry Shein It's not even all that giant in the scheme of things.
Elaine Pruis An analysis of the healthiest 10 new TLDs would be so much less sensational! But who wants to read an article that is devoid of all caps and bolded statements. Using volume as the sole measure of success is archaic. 2
Rubens Kuhl Which are those 10, so we can make them suffer the same fate of all the others ?
Hans Petter Holen Financial stability is a success criteria (I want to know that my name works tomorrow, next month, next year etc.) To a large extent, the domain business is a volume game.
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Richard Sexton ny domain you have to renew or if goes away is worthless. We did better than that once and we should, can and will again. I notice you don't need to renew .arpa domains. We'll just use that.
Barry Shein When the US was founded near-universal property taxation and freehold were considered essential as a check against a rise in a land holding aristocracy, particularly multi-generational.
That is, if you owned a property and did not use it productively it would become a costly asset. More important in a largely agrarian society but important nonetheless as a concept and subsequently translated to other assets. Analogously there's nothing wrong with charging to hold a domain over time.
But this illustrates, for example, a deep flaw in the idea of "premium" domains.
At the very least if registries were allowed this they should have been "taxed" based on their own offering prices. As it stands it's evidence of a corrupt system.
Richard Sexton "there's nothing wrong with charging to hold a domain over time." Not if it's not yours. Whereas the intellectual property system is means to protect when that take physical form, the domain name system is the only one where where somebody other than the author benefits from this which is unprecedented, arbitrary,capricious and reversible.
James Bladel Interesting analysis, but hard to distill his points when the post resembles a political chain email forwarded by a crazy uncle. 4
David Piscitello Many of his top 10 are perennial top 10 spammiest TLDs.