[CPWG] The crux of the COM issue

Mon Jan 6 02:36:27 UTC 2020

Evan,

I'd suggest that you are overstating the evils of domain investing and
overstating the "cleansing" effect of increasing domain name registration
and renewal fees.  The aftermarket would be little changed even in the
absence of domain investors.  Raising prices on .com domain names a few
dollars wouldn't change the dynamics driving the domain aftermarket, but it
would allow Verisign to extract hundreds of millions of dollars from all
.com registrants for no justifiable reason.

You wrote:

"Let's be absolutely clear. From the pure PoV of non-registrant end users,
domain investing is evil. It is a disease that extracts value out of the
Internet rather than adding value. It impedes the ability of legitimate
providers of Internet goods and services to affordably acquire useful names
to identify themselves to end users.

"I got in the queue to buy it before you" does not constitute innovation.
Domaining is transparently the Internet equivalent of ticket scalping and
deserves all the public loathing that scalping attracts."

Thirty years into the commercial Internet, the inherently valuable domain
names, especially in .com, have all been registered, most by existing
companies.  Inherently valuable domain names are akin to land in
Manhattan.  Suggesting that acquiring such domain names is the same as
scooping up a perishable service right like a concert ticket is a poor
analogy.

Many aftermarket transaction occur between "mainstream" companies and don't
involve domain investors.

Facebook bought fb.com for $8.5 million from the Farmer's Bureau.
Block.One bought voice.com for $30 million from MicroStrategy.  Other
examples-

GSK (Glaxo Smith Kline) selling 908(.)com the other day.
iDrive Inc. sold Driveway(.)com to Lithia Motors, Inc. the other day
Elon Musk buying X(.)com from Paypal
Sterling Jewelers, Inc. (parent company: Signet Jewelers Limited)  sold
Gold(.)com recently and Ruby(.)com
Evite, Inc. sold Postmark(.)com
NBC acquired Peacock(.)com from an individual with the surname Peacock.
Micro Focus Software Inc. sold Mercury(.)com
Dropbox, Inc. sold Loom(.)com
Pearson Inc. sold NN(.)com, AW(.)com and more
Microsoft Inc. sold ProjectCentral(.)com, Firefly(.)com, Zoox(.)com,
Jellyfish(.)com and many more.
Travelzoo sold Fly(.)com

MarkMonitor is offering hundreds of domains for resale on behalf of its
corporate clients -
https://www.markmonitor.com/domains-for-sale/top-level-domains/

Catchword Branding, a leading branding agency, offers 1,800 of its "reject"
domain names for sale on its Just the Word web site -
https://justtheword.com/.

Should these companies not be able to sell their domain names for market
prices?

Inherently valuable domain names are valuable corporate assets.  It is
impractical to suggest that the domain name aftermarket could be
eliminated, or that companies should not be able to sell their assets for a
mutually agreeable price.

ICANN has entrenched the very domain speculating that you decry on a
massive scale through the new gTLD program.  Those registries have taken
over the role of domain speculators, but instead of on individual domain
names, they have done so for entire name spaces.  The new gTLD registries
acquire the rights to a name space and then premium price the most
desirable domain names based on what they believe the market price for
those domains to be.  It is perplexing that setting market prices for
domain names is loathsome when done by domain investors but admirable when
done by new gTLD registries.

Domain investors fulfill the function of investors/speculators in any other
market - providing ready liquidity.  Domain investors are often not the
original registrants of domain names.  When I buy domain names, I'm usually
buying from prior registrants who no longer have a need for the domain name
and wish to quickly convert the domain name to cash.  Domain investors
often act as intermediate owners - acquiring from companies that wish to
sell a domain name, and incurring the pricing and timing risk of providing
ready cash with no certainty of return, and then, if successful, reselling
to another company that wishes to acquire that domain name.

It reflects a misunderstanding of domain investing to equate it with ticket
scalping.  Poor understanding leads to poor policies recommendations.

An argument that price increases on hundreds of millions of registrants
worldwide are justified on the basis that 1) a freely operating aftermarket
in domain names is illegitimate and that 2) raising registration and
renewal fees on all registrants would suddenly free up highly valuable
domain names and make them available for registration at a base
registration fee is not well grounded in the facts.

My understanding is that the registration and renewal fees charged by
Verisign are not set by market forces, contrary to your suggestion:

" I am amused at the reaction of those who are quite happy to let market
forces determine selling prices but scream when anything close to that
logic is used to determine their buying prices."

Regards,

Nat Cohen

On Sun, Jan 5, 2020 at 5:38 PM John McCormac <jmcc at hosterstats.com> wrote:

> On 05/01/2020 22:08, Evan Leibovitch wrote:
> > On Sun, 5 Jan 2020 at 16:59, John McCormac <jmcc at hosterstats.com
> > <mailto:jmcc at hosterstats.com>> wrote:
> >
> >     But it gets back to one simple question. Who decides what people can
> >     or cannot register?
> >
> >
> > I'd be happy with something based on the regime already in widespread
> > global use for trademarks: first-come, first-served, accompanied by an
> > aggressive use-it-or-lose-it policy. To this I'd add restrictions on
> > usurious resale markup.
>
> And that gets into the argument over which "trademark" from which
> country has priority. :) Getting a bad flashback to the .EU fiasco and
> those iffy Benelux deposit "trademarks.
>
> Rather than a resale markup, a business plan and probationary period
> during which some real usage of the domain name for a service or website
> might be a better way to do things. I think that .BERLIN actually has
> this as part of its regulations and it is one of the stronger new gTLDs.
>
> Regards...jmcc
> --
> **********************************************************
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