The domain after-market is nearly as old as the internet itself. From domain and typo squatting through to legitimate ownership, the market for domain names has risen and fallen in line with the overall market.
1999 was regarded by many to be the peak of Web 1.0 and likewise 1999-2000 was the previous peak of domain sales. News that Business.com is on the market for $400million shone the spotlight on the domain sales marketplace again. For domain sellers it’s a party again like 1999.
Last week some $10million changed hands at auction for domain sales, with 16 domains being sold for 6 figures. Free Credit Check.com & Credit Check.com sold together for $3million, although as the DomainTools Blog points out this was at a relatively low multiple of around 7x yearly earnings. Seniors.com sold for $1.8 million and even Blogging.com raised $135,000. The exuberance in the market even extends to the spam infested .info domain, with Houston.info selling for $17,000.
Ultimately it’s up to the market to decide the value of anything; however the domain sales market appears to be outperforming the established site marketplace. Buyers of domain names seem willing to pay much higher multiples for a domain name than the buyers in the established sites marketplace are. A good domain name may have a wealth of untapped potential yet many of these domains are used by buyers as nothing more than spammy CPC advertising front ends powered by Google Domain Parking, Sedo and other similar providers.
It would be easy to suggest that the buoyancy in the domain market is indicative of an overall market boom that may inevitably lead to a bust, however the signs in the rest of the market would not suggest that this is the case. The money flooding into domains today is sustained by advertising that wasn’t as prevalent in 1999; the same advertising that sustains much of Web 2.0. Given that internet advertising still only makes up only around 7.0% of the overall advertising spend there’s still a lot of room for growth.. Whether domain name sales rates can stay at this high level though is yet to be seen. I’d think that they are getting close to a peak; the question is will prices plateau or decline once the peak is reached? Certainly if any readers are sitting on some great domain names, there has never been a better time to sell.
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New Internet addresses for general use could start appearing in the summer of 2008 under a timeline the Internet’s key oversight agency announced Thursday.
The Internet Corporation for Assigned Names and Numbers invited public comment on procedures for creating new names, the first expansion for general use since 2000. Names added since then have been limited to specific regions or industries.
“This is all about choice,” ICANN Chief Executive Paul Twomey said in a statement. “We want the diversity of the world’s people, geography and business to be able to be represented in the domain name system.”
Domain names are key for helping computers find Web sites and route e-mail. There are currently about 250 domain name suffixes, most of them for specific countries such as “.fr” for France. General-use names include “.com” and “.net.”
In 2000, two years after its designation by the U.S. government as the authority for overseeing Internet naming policies, ICANN approved seven new names, but only “.info” and “.biz” were truly for general use.
ICANN solicited additional applications in 2004 and has approved six regional or industry-specific names, such as “.travel” and “.asia,” while rejecting “.xxx” for the adult entertainment industry.
Also added were .jobs, .mobi, .cat, .tel and .coop.
Some ICANN critics have complained that the agency has been slow to approve new names and that the procedures have sometimes been arbitrary. Businesses and trademark owners, meanwhile, worry that more names will lead to more cybersquatting, the practice of grabbing names before companies can in hopes of selling them at a premium.
ICANN did not specify how individuals and groups would be able to seek new names, but the group indicated that the procedures would be streamlined to permit “a much wider variety of them to be added in a timely, predictable and efficient manner.”
An ICANN committee, the Generic Names Supporting Organization, still is reviewing the procedures. Once it sends a recommendation to the ICANN board, procedures could be adopted by year’s end and applications for new names could be accepted early next year.
Twomey said new names could be reviewed and added into the system in the June-August 2008 timeframe.
The new addresses are likely to be in English.
ICANN could wrap up the technical work on non-Latin scripts by year’s end, but it still must resolve policy questions such as who should decide what countries get what suffixes and how to make sure a domain in one language isn’t inadvertently offensive in another.
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Many owners of Internet addresses face this quandary: Provide your real contact information when you register a domain name and subject yourself to junk or harassment. Or enter fake data and risk losing it outright.
Help may be on the way as a key task force last week endorsed a proposal that would give more privacy options to small businesses, individuals with personal Web sites and other domain name owners.
“At the end of the day, they are not going to have personal contact information on public display,” said Ross Rader, a task force member and director of retail services for registration company Tucows Inc. “That’s the big change for domain name owners.”
At issue is a publicly available database known as Whois. With it, anyone can find out the full names, organizations, postal and e-mail addresses and phone numbers behind domain names.
Hearings on the changes are expected next week in Lisbon, Portugal, before the Internet Corporation for Assigned Names and Numbers, or
ICANN, the main oversight agency for Internet addresses.
Resolution, however, could take several more months or even years, with crucial details on implementation still unsettled and a vocal minority backing an alternative.
Under the endorsed proposal — some six years in the making — domain name registrants would be able to list third-party contact information in place of their own — to the chagrin of businesses and intellectual-property lawyers worried that cybersquatters and scam artists could more easily hide their identities.
“It would just make it that much more difficult and costly to find out who’s behind a name,” said Miriam Karlin, manager of legal affairs for International Data Group Inc., publisher of PC World and other magazines. She said she looks up Whois data daily to pursue trademark and copyright violators.
Privacy wasn’t a big consideration when the current addressing system started in the 1980s. Back then, government and university researchers who dominated the Internet knew one another and didn’t mind sharing personal details to resolve technical problems.
Today, the Whois database is used for much more. Law-enforcement officials and Internet service providers use it to fight fraud and hacking. Lawyers depend on it to chase trademark and copyright violators. Journalists rely on it to reach Web site owners. And spammers mine it to send junk mailings for Web site hosting and other services.
And Internet users have come to expect more privacy and even anonymity. Small businesses work out of homes. Individuals use Web sites to criticize large corporations or government officials. The Whois database, for many, reveals too much.
The requirements for domain name owners to provide such details also contradict, in some cases, European privacy laws that are stricter than those in the United States.
Registration companies generally don’t check contact information for accuracy, but submitting fake data could result in missing important service and renewal notices. It also could be grounds for terminating a domain name.
Over the past few years, some companies have been offering proxy services, for a fee, letting domain name owners list the proxy rather than themselves as the contact.
It’s akin to an unlisted phone number, though with questionable legal status. The U.S. government has banned proxies entirely for addresses ending in “.us,” even after many had already registered names behind them.
Critics also complain that such services can be too quick or too slow — depending on whom you ask — in revealing identities under legal pressure.
“Right now there’s no regulation, no accreditation, no standards,” said Margie Milam, general counsel for MarkMonitor, a brand-protection firm. “Some can take weeks, which can slow down investigations.”
The task force proposal, known as operational point of contact, would make third-party contacts a standard offering. Domain name owners could list themselves, a lawyer, a service provider or just about anyone else; that contact would forward important communications back to the owner.
Details must still be worked out, but the domain name registrant rather than the proxy would likely be clearly identified as the legal owner, unlike the current, vague arrangement. ICANN’s staff also pressed for more clarity on to whom and under what circumstances the outside contact would have to release data.
Although that proposal received a slight majority on the Whois task force, some stakeholders including businesses and lawyers have pushed an alternative known as special circumstances. Domain name holders would have to make personal contact details available, as they do today, unless they can justify a special circumstance, such as running a shelter for battered women.
“On the whole, society is much better off having this kind of transparency and accountability,” said Steven Metalitz, an intellectual-property lawyer on the task force.
ICANN’s Council of the Generic Names Supporting Organization plans public hearings in Lisbon, after which it could make a recommendation or convene another task force to tackle implementation details.
Supporters of the new proposal remain hopeful that resolution is near.
“A lot of public interest groups have been waiting a long time to see if this process actually works or if it’s just a charade,” said Wendy Seltzer, a non-voting task force member and fellow with Harvard University’s Berkman Center for Internet and Society. “If this turns out to have been for naught, you will have a lot of frustrated people.”
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