Telnic: A $35 Million Investment Gone Awry
Monday, November 10th, 2008
Luck seems to be running out for investors in .tel registry. And it hasn’t even launched yet.
A new top level domain, .tel, is getting ready to rollout in the first part of next year. The registry behind the domain — Telnic — has raised a stunning $35 million in outside capital before even launching the domain name.
.Tel isn’t a traditional domain name where you register it and then put up a parking page or web site. Instead, your .tel domain name is sort of like an online business card with your contact information. You don’t create a web site; it’s all hosted on the DNS. Essentially, .tel will be a yellow pages and white pages.
Here’s the problem. The concept behind .tel was created about a decade ago. That’s before MySpace, Facebook, and a myriad of other social networking technologies made it big. Telnic applied for .tel from ICANN back in 2000, according to a recent BusinessWeek article.
The top level domain finally got approved and now it has been rendered pointless.
Why should people pay to have a “business card on the web” when they can get a free one through a number of other sites?
There’s a network affect here. If everyone has a .tel domain name, the scheme will work. But right now no one has one, and the odds of more people signing up (and paying) for .tel than Facebook is minuscule. If I want to get in touch with someone, odds are better that I’ll find them searching on Facebook than going to someone.tel. (Incidentally, .mobi faces a similar challenge in trying to change behavior. It has to get to a critical mass — quickly — to succeed.)
The fact that your information is managed in the DNS is cool, but end users don’t care. They can’t tell the difference between someone setting up an online address book in the DNS versus on a web site.
Betting $35 million on Telnic is like saying “We’re going to create another cool social network. It will be limited in interaction, but we still need to get tens of millions of people to sign up. Invest $35 million in us on the outside chance we pull it off.”
But that obviously wasn’t the original pitch. Back in 2000 this was novel. But the TLD approval process at ICANN didn’t help Telnic’s chances. By taking so long to approve the application, time passed Telnic by. Now the new top level domain name process is launching, which means that anyone could launch a competing top level domain and launch it in a couple years’ time. And that TLD could be a lot cooler than a short hand term for an antiquated work like “telephone”.
There is a chance — however slight — that .tel will succeed. Telnic will have to do a few things perfectly to get this to work. First, make .tel integrate into third party applications better than Plaxo, LinkedIn, Facebook, and MySpace currently do. Second, it should give away .tel domains to individuals and hope to make money on businesses instead. It must get to critical mass quickly, so that I have a reasonable belief that typing in myfriend.tel will get me what I want. Third, it needs to pray that Facebook doesn’t kill it overnight by creating some sort of online vcard.
Related posts:
No land rush from me. Not even a land stroll.
Stupid concept.
It’s called a contact us page.
They will never get critical mass. Speculators will rush in and something like my.tel will sell for $10k but then it’s over.
Right up there (or should I say down there) with .pro .aero .travel etc.
My kids look at me blankly when I mention dot mobi (as they are calling up all sorts of websites on their iphones and ipods). I’m sure they would think dot tel is very old school as they go to update their Facebook page and send text messages to friends. I’ve just had to explain to the Yellowpages rep why my company is eliminating our Yellowpages advertising. Customers are finding us through our own efforts on our own websites. Sounds like I could have the same chat with dot tel.
Well at least they threw a good party in Cairo
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[...] registration for the new .tel domain name is underway. I’ve been a vocal critic of .tel, even suggesting that the $35 million investment in .tel registry Telnic should be written off as a loss. I don’t want it to fail and hope that time proves me wrong. I just think the odds are [...]
Finally – a sane article on the online address book market.
You can get a free online address book listing at WikiWorldBook. This enables you to be easily found via Google, and messaged via the website.
The website’s message gateway then allows users to be contacted without having to reveal their email address. After checking any messages for spam, the message system forwards on the messages to the registered user’s email account, so they don’t have to return to the site. Uniquely, the person contacting them doesn’t have to be registered, thus enabling people to reconnect as easily as possible.
Online address books are different from social networking sites which are walled gardens, so you have to be a member to make contact.
[...] Telnic: A $35 Million Investment Gone Awry [...]
I think this article and the responses are missing the point about .TEL.
.TEL is a domain which connects to all communication methods. The technology behind it has many useful applications and has the potential to be enormous in my opinion.
The person that pointed out that there are contact us pages on website is confused by what .TEL offers. Take this scenario for example. It is the year 2015 and I am in my car trying to find the telephone number to my friend. Accessing his easy to remember .TEL is quicker than accessing a webpage and looking for the ‘Contact Us’ page. It is also easier to remember than remembering his telephone number.
Here are 31 reasons to consider when making a decision on this technology:
http://www.webtrafficconsultants.com/tel-domain-name-advantages-list.htm
All they nay sayers on this thread completely miss the point.
.tel isn’t in competition with anything on the Internet today. There’s nothing like it. You simply can’t compare it to any existing domain service.
Those who suggest you use an existing online service ignore the fact your account is owned by that service, and that service can change the terms on you as they see fit. With .tel you own your record.
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