eNom joins competitors in offering easy domain reseller option.

Joining the ranks of Go Daddy and Tucows, eNom is launching a domain reseller package that includes a web storefront for non-techies. (Update: Instant Reseller will replace the former PDQ program. See comments for details.)

eNom’s system, called “Instant Reseller“, is essentially a reseller-in-a-box package that includes a fully hosted website and customized storefront, a shopping cart feature, order fulfillment and credit card processing capabilities. Previously, resellers needed technical expertise to integrate these features separately.

Instant Reseller costs $249 per year. Tucows’ OpenSRS has a one time $95 activation fee, and then generally charges $3 per domain registered/renewed as a transaction fee. GoDaddy’s Wild West Domains program has three packages that cost between $99 and $229 per year.

Like Tucows, eNom built its registration base on a reseller network. GoDaddy has generally sold direct to the public.

The United States Patent and Trademark Office issued U.S. patent number 7,644,117 to The Go Daddy Group for its reseller programs earlier this year.

…for some domains, anyway.

A lot of the talk around new top level domain names is the lack of pricing controls on providers. A company that launches a new TLD can set prices however they wish, and owners of existing TLDs worry that this idea would then be applied to their domains. Have a successful domain? You could get hit with a $1,000 renewal bill.

But let’s look at the other side for a moment. My guess is VeriSign would like to offer variable pricing — on the downward side. There are literally millions of .com domain names that could earn pay-per-click revenue each year, but not enough to cover the $6.86 (plus 18 cent ICANN fee) to justify registering the domain name. As a result, instead of getting at least some of the value, VeriSign gets $0 from these unregistered domains.

What if VeriSign could offer some of these domains for less than $6.86 (or $7.34 starting in July)? It could capture the value from these millions of domains, even if it’s not the full amount. If a domain makes $4 a year, it could sell the registration for $2. It could even work out a revenue share deal with registrars.

Think this is crazy? Well, one domain name registrar (that has its sights on the registry market) has received a patent on this idea. Demand Media, owner of eNom, got a patent last year for such a system.

In Demand Media’s model, there would be multiple tiers of registration. So if I’m paying $2 for a low tier registration, and someone comes along willing to pay full price, they could get the domain. But in the mean time, the registry is earning $2 and I’m earning $2+ in pay-per-click.

Of course, the politics of this may make it difficult for VeriSign to pull this off. If they can offer one type of .com domain for $2, couldn’t they offer all domains for that price? More likely would be “volume” deals with certain registrars, as most registries offer today. Or perhaps another variation on this model would be less controversial.

What Demand Media can do for the domain name business.

[This is the second part of a two-part story on Demand Media. See part one here.]

For many years, Demand Media has been a mystery to the domain name industry. It’s a big player, for sure. It snapped up eNom and then BulkRegister, making it the second largest domain name registrar in the world. Its registrars have 10 million domains under management, and Demand Media owns a nice portfolio of its own. The company also acquired domain parking company HotKeys.

But what does that have to do with Demand Media’s burgeoning content business?

Demand Media is creating the tools that will help the domain industry do what everyone is talking about: develop their domains.

In a blog post last November, HotKeys founder and Demand Media VP Michael Blend explained the connection. Demand wants to take the same tools it used to create a top 20 online media network and bring the magic to domain owners. It believes there’s an opportunity to bring value to the 100 million undeveloped domains.

Will it work? When Demand was just a collection of media sites and domain registrars, it didn’t add up to much. But now that the company has a full fledged content army and social tools, it is beginning to show the potential to make it happen.

It’s not as simple as just taking a few articles that would have been published on eHow.com and publishing them on a virgin domain name. There’s no search engine juice, and the revenue model breaks down. But RichContent gives us a hint of what’s to come. Demand Media has good social media tools, which, when combined with good content, can power the web.

Here are two ways Demand Media could enable domain name owners to get more out of their domains in the near future:

Fast content - as domain owners launch web sites, they need content. It needs to be compelling, too. Demand Studios can offer content targeted to individual domains, as well as provide the tools to quickly publish it. It can also create a syndication network, driving SEO value back to the new web sites.

Perpetual parking - domain parking companies only focus on today’s click. The real play is to captivate visitors and turn them into long term revenue sources. One way to do this is to get their e-mail address and send them follow up newsletters with ads. Demand Media has the scale (and tools via Pluck) to create relevant content-based newsletters across tens of thousands of topics, bringing recurring revenue to domain monetization.

Demand Media doesn’t yet have the magic bullet for domainers who park their domains. But it is building the engine, and certainly ranks at the top of the list of companies that could turn domain monetization on its head.

Deal or no deal? eNom leaves money on the table.

Back in February I made an offer on a domain at AcquireThisName.com, an eNom affiliate. It wasn’t a great name, just a brandable that a friend was interested in. eNom wanted $6,000; my friend’s final offer was $400 since we were so far off.

Flash forward to November and eNom is letting the domain drop, likely to earn little or nothing for the domain it could have had $400 or more for. Here’s an email I received from the company:

Hello Andrew,

You were previously in contact with Acquire This Name about purchasing the domain name [redacted.com]. While we were not able to reach a sale agreement for the domain at that time, we want to let you know that the domain will soon be available in auction thru (sic) NameJet.com. If you are interested in bidding on the name in auction, please visit the domain redacted.com for more information. In general, the bid minimum bid price for the domains at NameJet start between $29-69 USD.

Feel free to contact us if you have any additional questions.

Regards,
Your AcquireThisName Team

I know $400 isn’t much. But it goes to show that a bird in the hand is worth two in the bush. Had eNom made a reasonable counter offer, they probably could have sold the domain for $1,000. When you have a brandable name with few potentially interested parties who have other options, it’s worth trying to close a deal rather than lose it.

Critical customer mistakes often blamed on domain registrars.

When online backup service CrashPlan.com went down earlier this month, the company was quick to blame its domain name registrar GoDaddy. Code 42 Software, which runs the CrashPlan.com service, tweeted about how GoDaddy “mistakenly removed our root nameserver entry”, “inappropriately took over our DNS”, and did a DNS “hijack”.

What Code 42 Software never tweeted was that it had mistakenly let the domain name expire. The outage was Code 42’s fault, not GoDaddy’s.

None of the previous five e-mails GoDaddy sent to Code 42 Software alerting them to the impending expiration got the company’s attention.

The myth that GoDaddy was to blame then spread across the web. One commenter on an unrelated CNET story wrote that “GoDaddy somehow hosed their domain.” (Code 42 Software did not respond to a request for comment for this story.)

Domain registrars frequently get thrown under the bus when one of their customers makes a mistake. In another case, a registrant of a popular web site had their non-Go Daddy email account compromised, which allowed an attacker to steal their domain name by transferring it away from GoDaddy. The customer publicly blamed GoDaddy, even though the problem was with the customer’s e-mail security.

GoDaddy deals with the brunt of attacks like this, given its massive size and mass market strategy. But other registrars feel the heat, too. Earlier this year fingers were pointed at eNom when several high value domain names were stolen. The real culprit? The customer used a weak password, allowing the thief to access their account.

Companies with popular web sites have a number of added tools they should use to protect against many of the most common domain problems. Moniker and Fabulous offer domain locking tools with added security. GoDaddy offers Protected Registration. Companies should also subscribe to DomainTools’ Registrant Alert to find out about potential theft quickly. The sidebar of this story has other tips for protecting your domain names.

The difficulty for domain registrars is how quickly misinformation spreads across the web. It doesn’t matter that it was Code 42’s fault that CrashPlan.com went down. It doesn’t matter that it wasn’t the registrar’s fault that a domain was stolen. Just the accusation, combined with the viral nature of social media, can damage a registrar’s reputation.