Interview with Kashayar Mahdavi - CEO of Telnic Limited, the people behind .TEL

I’ve never actually done an interview on this site but in this case I felt it was important. I myself, am not entirely sure what to think about .tel names, especially when it concerns the reseller market.

So, I’ve decided to ask a few pointed questions to Khashayar Mahdavi, the CEO of Telnic. He was kind enough to provide thorough answers.

Please explain how the .tel extension works differently than other extensions. For example, what makes it different than .mobi names?

The .tel is the first domain that is dedicated to communications and that allows people to store, publish and update online all their contact information and keywords under their domain name, without the need for a website.   This means .tel it has a totally different purpose than other domains.  Instead of linking domain names to IP addresses of websites, we’re storing and publishing contact information directly in the DNS.

For example, telnic.tel  does not return an IP Address as with other domains. It returns the contact information and keywords that our company chose to store directly in the DNS. You can then click on one of the contact details provided (tel, email, fax, location, website, etc…) and immediately reach us.

We believe that .tel the biggest innovation since .com because of this new purpose and service, and we expect it to spur innovative monetization strategies and drive significant growth in the domain name industry.  We’re bringing a different and new value to the domain name market which will benefit everyone.

How can my audience (professional domainers) profit from .tel names?

The .tel adds several monetization opportunities that investors should appreciate which widen the ability for a domain developer to generate revenue in parallel with traditional website-driven monetization strategies.

The .tel spreads the risk of investing over multiple methods of generating revenue, such as PPC and premium rate numbers for voting and betting services.  There is also value in owning vanity names, whether business or consumer focused.  It’s also possible to run a commercial directory service under a .tel domain and, of course, it is possible to provide links to revenue generating e-commerce storefronts.  Additionally, due to the unique content published in a .tel domain, pairing it with existing investments in .com and other domain names will lead to better SEO – a key goal in revenue generation.

Why are they so expensive?

.tel domains aren’t expensive when you compare the services I’ve just described to other services which offer similar functionality.  The .tel domain simply cannot be compared to other domains. However, when General Availability begins on March 24th, the price for a .tel domain will be about the same as any other domain available today (about $20 per year). Furthermore, all existing domains have hidden costs of web hosting and ongoing development, which do not exist with .tel domains. So once you remove the hidden costs, a .tel domain is much less expensive than a traditional domain.

Concerning Landrush prices, Telnic has made the decision not to auction any domain names, making even the best of names available on a first-come, first-served basis at a fixed price. We consider this to be the fairest method and the best way to support entrepreneurs wanting to create a new business behind their .tel. So, for example, anyone can register NewYork.tel for a 3-year term only for $375. Had we chosen to auction these names, at what price do you believe NewYork.tel, LosAngeles.tel and Dubai.tel would have gone for? Surely more than $375 for 3 years and no hidden costs for web hosting or development.

Don’t you think that bloggers and individuals would be more likely to get .tel names if they were less expensive?

People will be able to buy their .tel domains during General Availability starting on March 24th at around the $20 per which offers great value for the price. We are already seeing pre-booking activity for General Availability.

How has your launch gone so far? Have you registered more, less or about what you expected?

During Sunrise we had over 10,000 applications despite the very restrictive Sunrise policy we implemented that only allowed applicants with trademarks with national effect and fully validated documentation to apply. Thousands of .tel domains were registered including such companies as: Microsoft, Google, CNN, MySpace, FedEx, Sony, Ferrari, Starbucks, NYPD, Apple, Marriott, Nestle, Visa, Lucent, DeBeers, Exxon, Harvard, Old Navy, Red Bull, Xerox, Hard Rock Café, Alamo, L’Oreal, Lotto, PartyPoker, Philips, HBO, RIM, Vogue, Virgin Media, Rolex and many more. These registrations represent a broad cross section of industries and geographic regions.
Furthermore, we have seen a lot of good press throughout the world, indicating that people are thinking about this in a very serious way. The .tel has been covered on CNN, Bloomberg, BBC Online, Herald Tribune, The Financial Times, The New York Times and many more.

Please describe your transfer model which affects resellers. Is it a simple auth code model like used in most major extensions or do domainers need to fax a ton of signed paperwork?

This is a simple authcode model.

Any last thoughts or comments you would like my readers to know?

All great innovations have been met with healthy skepticism.  The .tel is no different as it truly brings a different use for domain names.

The .tel is now creating new opportunities for the domainer community, as well as a new ecosystem that includes non-traditional players entering the domain name industry, such as social networking sites, directory service providers and Voice over IP companies. Some have already begun the process of becoming an ICANN Accredited registrar as they see the potential of the .tel as a communications hub for businesses and individuals.

We believe that these non-traditional players will be a driving force of growth for .tel domains and the domain name industry as a whole and lead to a new value being assigned to domain names. This can only help the domaining community realize a different revenue stream and harness richer profitability as consumers continue to modify behaviors and purchasing habits in this fast-paced online world.

Why I’m betting the farm on ccTLDs - Why country-code domains have value and what they should mean to your domain business.

I’d like to open by insulting you, if you don’t mind. I’ll try to make up for it later if you stick with me. I think it’s foolish and bad business to ignore ccTLDs. Any responsible business person should know this one fundamental rule: To grow your business you need to either take market share from the market leaders or expand your market.

ccTLDs are a way to expand your market. I am in no way suggesting that you should ignore .com names but you should consider it your responsibility to understand where you can expand whether you are ready for it or not.

A ccTLD is a .com for the country in question, but not only in the obvious ways. There’s more to it. The names I’m talking about here are names that are making money now and are worth money now. There is no guessing work. I’m not a profit because the future is here and I’m stating what should seem as obvious today.

I have no faith and wouldn’t place my bets on .mobi, .info, .tel or any of the other common gTLDs. Don’t lump me in with those believers or mistake the points that I’m about to drive home as an endorsement of those extensions. I would lump in with the gTLDs the branded ccTLDs that attempt global reach. .TV names do nothing for me, neither do .me names. Now let’s get to the meat of the article.

A name like usedboats.co.uk is usedboats.com for The United Kingdom. What are the odds that someone in Wales would buy a used Master Craft from someone in Los Angeles? Not good. On the subject of shipping, there is a reason why eBay and Amazon have specific sites for specific countries. It’s not just boats that are unreasonable to ship.

Then of course there are the billing and language issues. You get the point so I won’t beat it into you.

A contrarian would point out that much like a .com could be mobile where you wouldn’t need a .mobi name a .com could also be globalized for local languages, billing and shipping. That’s true but it’s also been proven that consumers in these countries do gravitate to their local extensions more and more. They see them in the streets. The signs are littered with them.

There are still more pluses which make ccTLDs more than worthwhile which you can’t do with the .com equivalent.

There’s the search engine element. It’s been proven time and again that Google gives preference to ccTLDs when searches are performed at Google’s own ccTLDs. Go to google.co.uk, google.de, google.jp, etc and test me on that one.There’s traffic and revenue to be had if you work it. I’d be willing to place another wager that I can have boxing.com.ph get more traffic from the Paquiao crazed Filipinos than Boxing.com gets; given some time to work on it.

All of what I’ve mentioned still hasn’t touched on the best part. They make money! Time and again I find myself able to hand-register names that are profitable from day-one. It’s because of these points that I’ve mentioned that this is so.

Do a little bit of math which will open your mind. Look at how many .com names are registered then compare that number with the few hundred thousand .mx names that are registered. Isn’t it now reasonable to think that there are hundreds of thousands if not millions of more names worth registering down there? With a hundred million Mexicans predominately under the age of 30 I think the answer is obvious.

Since you guys are going to ask anyway I’ll go ahead and comment on the two extensions that are harder to predict are .us and .eu names.

.us names have never held a special place in my heart as I feel in the United States the citizens expect a .com. I’d rather market a site with a .net name here than a .us. However, I do see them as having some value much further into the future as the world gets more savvy on the naming system, which it will. I won’t buy .us names though because long-term to me means 2-5 years. With a .us name you would need to wait closer to 20 years to see any real significant value and I expect to be sitting on the beach in .mx by that time and nowhere near a computer (yeah right).

Now comes .eu. This extension is much harder to predict. For one thing, it isn’t technically a ccTLD but to me it is. As an amateur historian I can’t help but compare the European Union to the early period of the United States. When my home country was first formed, the 13 colonies which became states were much more like countries than anything else. New York had an army, The Carolinas had armies, etc. These were self governing nations in every sense. The federal government had very little power. It was over a period of many years where each incoming administration slowly chipped away at the rights of the individual states and lead to what is now the all-powerful federal government of the United States of America. It is my belief that the same will happen in the European Union but much faster. Everything happens faster now than it did before. *editor’s note - count yourself lucky I kept that rant as short as I did. In short, I believe in .eu names. I don’t currently have a portfolio of them worth bragging about but this will change quickly. The European Union is nearly the same size in both populace and economy as the United States; so concentrating on it as well is effectively doubling the size of your market. It would be foolish to ignore it.

Foolish is what we can’t afford to be in these trying times. There’s a real opportunity here and it isn’t as speculative as you may think. The majority of ccTLDs already have value and their stock is rising fast.

How to .Tel the Difference

One of the more interesting companies I’ve talked to during this ICANN meeting has been Telnic. On December 3rd they will start their sunrise registration of .tel domains. There are a few notable and fascinating things about this extension worth discussing.

The domains won’t be used for websites, per se. You won’t actually be using A records, C-Name records or MX records. You won’t have a hosting company. There will be no FTPing or html pages of any sort.

It’s always when you think you know a thing or two that someone turns everything upside down on you. While even rookie domainers quickly learn what A, C-name and MX records are, even the most savvy of us have never heard of NAPTR records. From what I understand, they are DNS records that can contain phone numbers, email address, links or other communication services.

In other words, they are using the central name servers to propogate out to the world’s DNS servers all of the content that any .Tel will display. If you visit hotels.tel you will be pulling the content from a name server near you, not from a hosting company.

Their goal appears to be to become the yellow and white pages of the 21st century. Besides business opportunities for people that want to setup and sell listings for hotels.tel or taxis.tel, they hope that companies will jump on board with names like microsoft.tel and post all of their contact information. As an individual you could put up your contact information along with links to your Facebook and/or linkedin.com profiles.

The jury, as they say, is out on this point. I think its important to distinguish .Tel from .mobi domains. The purpose of .mobi domains is to point to properly formatted mobile websites while the purpose of .Tel domains is to point to contact information and keyword for individuals and businesses and all information is immediately clickable for a “click-to-call” feature.

The technical aspects of how they are pulling this off, however, is nothing less than astounding. Someone may come up with very clever ways of monetizing a service like this if they think way outside the box like Telnic has.

They are not auctioning off premium names and will not be running a lottery system. When they start their landrush they want it to be a free-for-all. Those who snag the obvious premium names like hotels, taxis and common first and last names will certainly have sellable names on the aftermarket.