My thoughts on the coming gTLD BATNA
POSTED BY Rick Latona IN Web Sites

I remember the Singapore ICANN conference like it was yesterday. I remember the sign in the airport saying drug traffickers will be executed and the intense heat that hit me when I walked outside.

Mostly, I remember the atmosphere at the ICANN convention itself. Everyone was excited about the big change about to happen in the domain industry and a few well entrenched players were terrified.

I was 26 at the time and it was my first trip even out of the country...

Clearly I'm not talking about the meeting just held in 2011 where ICANN approved the creation of at least 1000 new top level extensions. I'm referring to the 1999 ICANN meeting. The first ICANN meeting. The meeting where they broke Network Solution's monopoly on the .com extension and opened it to any registrar that could qualify and pay the fees.

I was there representing the web server company I was part of which included amongst its investors Network Solutions themselves. We were registering 10,000 to 70,000 domains a day for our clients at Net Sol's rack rate of $70. I'm pretty sure the only site registering more than ours were Internic.net and possibly register.com. We made nothing on the transactions. What a bum deal. That's another story.

While I didn't attend this year's meeting I assume from reading other's stories that the feeling was very similar. Posts that mention the domain world is forever changed and standing ovations, as an example.

I can't help but to wonder, as I read the news coming out of that small Island nation, if the ICANN board picked Singapore for symbolic reasons. Not that the same people are even involved. Esther Dyson was chairwoman during that momentous occasion in the 90s.

Did the domain world change in March of 1999? It most certainly did. Has it just changed again in June of 2011? Absolutely.

I assume, just like the first Singapore meeting, it'll take some time for everyone to feel the effect. Registrars didn't come online immediately and neither will these new gTLDs. Most reports expect it to be 2013 before consumers will be able to register new names under the extensions.

These extensions are certainly coming and some companies will do very well. Those that will benefit greatly include:

- Consulting companies like Minds + Machines and Right of the Dot,

- Infrastructure companies that you can outsource registry operations to like Afilias and Neustar,

- Registrars with large amounts of consumers and small businesses like GoDaddy and eNom.

- ICANN themselves will have a hard time spending all the cash they'll have to work with. First class flights and luxury hotels can't be expensive enough for them to spend it all.

As for the new registries themselves, I think you'll see a lot of business models come around. There will be some that will give away domains for free that will have an advertising model. You'll see extensions with a social media play and extensions with a mobile play which will be quite different than .mobi. There will be many different ideas and models, some of which will be brilliant, many of which will be terrible. Either way you look at it, the market will be flooded with options.

I don't think the values of premium .com names will be hurt much in the next three to five years because they are still rare and have a lot of power and honestly, they are tough to sell now but sales still do happen occasionally. Essentially, I expect it to stay the same for some time to come, new gTLDs or no new gTLDs.

I do think it's important to think about the reason that ICANN has done this. It's not only about money for ICANN and the other parties, although that had a big impact. The "theory" behind it all is that ICANN does not want small business people to have to pay big money for a domain on the aftermarket. The internet continues to expand and will continue to expand and the available options for domains needs to expand along with it. It's simple supply and demand theory. They just radically increased the supply.

Long-term, .com names have a tough battle. As consumers start to pay more attention to the extensions they see advertised, companies will find it easier to brand something other than .com.

And as any experienced negotiator would tell you, never underestimate the power of the BATNA or the Best Alternative to a Negotiated Agreement. It's the buyer's other option. While you are trying to sell insertname.com for three million dollars, the other party could be thinking to themselves that they could get (.insertname) for $175,000. That, my friend, is a BATNA.

  • Ricardo

    Rick, you have never been good at domaining. You really don't understand the dynamics of this business.

  • http://www.domainnamewire.com Andrew Allemann

    Is the BATNA really .TLD? I think the BATNA is another .com, or perhaps another second level domain in another gTLD.

  • http://www.domainnamewire.com Andrew Allemann

    Is the BATNA really .TLD? I think the BATNA is another .com, or perhaps another second level domain in another gTLD.

  • http://twitter.com/NYParisLondon NYParisLondon

    Rick,

    I'm sticking with NATNA: No Alternative To A Negotiated Agreement.

    http://1-800AUCTION.COM

    Premium .COM and brilliant brands will always do fine.

  • Ofrager

    The "theory" behind it all is that ICANN does not want small business people to have to pay big money for a domain on the aftermarket.

    ICANN looks at a domain as an address similar to the role a phone # plays in a business.

    Problem is that a small business isn't buying a domain. They are buying their future-- a brand that can make a significant difference in the time and expense it takes to achieve success. It's because of the need to match the address to the brand, they turn to the aftermarket. ICANN wants it the other way around- settle for the brand that matches an available cheap domain. That's a bad business decision that will cost more than the big money needed to pay for the right brand. The name is the most critical component in a business. Today it should be an accepted cost of doing business with plenty of proof sources why it's worth it.

    Zappos which changed it's name early on doesn't want to be Zappos.shoes. They want to be Zappos a customer service leader that just happens to sell shoes. That's what made it a billion company competing with others selling the same products at the same price.

  • Jeffcool

    I think we should not forget that internet has also users. Not only domainers and companies. Users are already confused by various existing Tlds. The only Tlds they understand clearly and have a chance to remember are .com (they know it's used for about everything worldwide or not) and ccTlds (they know it's used for national services). Said so, my guess is that such a wide opening for new user-confusing Tlds will mostly have the effect to strengthen .com and ccTlds as THE obvious references (we all need lighthouses in a storm) and weaken all other Tlds including .net and .org (not even talking about .biz .info .mobi .tel .name .jobs... which are interesting to notice by the way that there were already more than enough Tlds alternatives with lack of success). All those "secondary" Tlds will likely be merged with the incoming Tsunami. I agree this is hard to predict what will happen but this is what I believe and just wanted to share.

  • Mark Yin

    "While you are trying to sell insertname.com for three million dollars, the other party could be thinking to themselves that they could get (.insertname) for $175,000."

    Now this is a bang-on view of the situation, IMHO.

  • http://www.newyorkstocks.com William

    I disagree that this post betrays a lack of understanding of the dynamics of domaining.

    Certain points can be debated, particularly the idea that .com's will flatline at best (I think they'll either plummet or get even stronger) but his opinions are backed up with solid analysis and reason.

  • Mike

    not sure if I prefer pro.com or running a business calles .pro

  • Anonymous

    That's the situation until a couple years down the track when the decision is insertname.com or alternatively get .insertname for $2000

  • Garry

    "The "theory" behind it all is that ICANN does not want small business people to have to pay big money for a domain on the aftermarket."

    Rick you're an idiot if you think ICANN gives a shit about small business people. Surely you were just stating this theory and not buying into it.

  • Anonymous

    Gary, I absolutely think that one of their objectives is to keep costs down for the little guys. Have you been to their meetings? There are a lot of do gooders there. The open source, free internet types have a strong voice. I've been to about 10 meetings. Call me an idiot but I stand by my point.

  • http://www.itsSri.com Sri

    I want to share a real example here. I am developing the website for "some school name". The .com was not available so being in India, we registered someschoolname.in as well as the .net and .org. I went to the school to demo the initial setup and even while I mentioned to the school principal that the name someschoolname.com was not available so we had someschoolname.in, she typed someschoolname.com in the browser.

  • http://bankwikileaks.com nick

    how about this - im in love with .coms yes but .mes of late especially with the whole torrent business - imagine all those people who are going to atdhe.me , demonoid.me and who knows soon piratebay.me - These are millions of people who are understranding that hey.. i dont need a .com to build a website.. Heck if this guy is selling me the .com for 5k - then this $50 domain doesnt sound so bad. haha. I know right. And imagine how pretty the guy who owns Poker.me is sitting right now. Come Back .. Latona Come back. <3

  • http://%/Endworld2 Alexander

    buy@viagra.online" rel="nofollow">......

    Need cheap generic VIAGRA?...

  • http://%/Endworld3 Alexander1

    buy@aloe.vera.gel" rel="nofollow">......

    Need cheap generic VIAGRA?...

blog comments powered by Disqus