A look back at a watershed year for domains.
It’s time again for Domain Name Wire’s annual roundup of the domain industry. In 2006, the top stories were surging domain values and major investors entering the market. This year includes some familiar stories, but also includes new trends in the industry.
7. Registries increase prices. We new it was going to happen, but it still hurts. This year VeriSign increased the wholesale price of .com domains by 7% and .net domains by 10%. Other registries followed suit, sometimes with the simple justification that “everyone else is doing it.” Registrars responded by raising prices, with some taking the opportunity to tack on some extra profit margin. Prices will increase in 2008 again.
#6. GoDaddy takes some bruises. You have to commend GoDaddy on becoming what it is today — the world’s largest registrar. By a long shot. But being the biggest means extra scrutiny. And by the law of large numbers, they’re also most likely to trip up. This year saw a couple big screw-up. The first was the suspension of seclists.org, which garnered international press. It was a major screwup that could have been handled gracefully in the press. Instead, GoDaddy general counsel Christine Jones responded by saying GoDaddy’s terms of service say the company “reserves the right to terminate your access to the services at any time, without notice, for any reason whatsoever.” That didn’t make customers feel comfortable.
Next, in a story Domain Name Wire broke, GoDaddy deleted a domain because the owner had inaccurate whois information. The company handed it over to another customer who backordered the domain. Although a domain can technically be deleted for invalid whois information, this certainly isn’t a customer-friendly action. Other domain companies say they’d never do this. It appears that public pressure has caused GoDaddy to change its practices. It now suspends domains for invalid whois after attempting to contact the owner. This seems reasonable.
# 5. Domain prices continue to soar. 2007 was a great year for domain sales. DNJournal reports that every single domain in its Top 100 list for the year cleared 6 figures. Moniker sold Porn.com for $9.5M and had a record auction in NYC selling over $10M in domains. Will the upward trend continue? As long as the dollar remains cheap and demand for domains grows, I’d bet my money on it.
#4. Domain auction upheaval. At the beginning of the year it seemed that Moniker was the master of live auctions and SnapNames ruled the expired domain jungle. But then things got interesting. Oversee.net bought SnapNames. Major registrars, including eNom and Network Solutions, used a change-of-control clause in their contracts with SnapNames to defect. These two registrars formed a competing service NameJet. MelbourneIT then defected to Afternic.
On the live auction side, it seems that everyone is throwing their hat into the ring. DomainTools had a flawed but successful first auction that introduced good online bidding technology. GoDaddy held its first live online auction but it was a flop, thanks in part to high reserve prices. Oversee.net is getting in on the live auction scene with its first SnapNames Live auction at DomainFest this month. Earlier this month, we saw another game changer: Oversee.net bought Moniker. We’ll see how that changes the landscape in the coming year.
#3. Mobi. 2007 was the year of .mobi. You couldn’t read a message board or go to a domain conference without discussing the domain. It all started with Rick Schwartz’s $200,000 purchase of Flowers.mobi in 2006. From that point forward, people jumped on the bandwagon and claimed this will be the next great domain. The rationale is simple: there are more mobile devices than computers, and people are increasingly using them to access the internet. Maybe so, but ads on mobile devices don’t convert well…yet. This is one that will play out over time. .Mobi ended the year in controversy after Sedo voided its most successful auction to date, including the sale of Music.mobi for $616,000.
# 2. The death of a registrar, and a close call for a registry. What happens when a registrar loses its accreditation? It gets ugly, especially when the registrar’s employees appears to have committed crimes. In 2007 we saw the death of RegisterFly. GoDaddy stepped in to take over the management of RegisterFly’s domains, but many customers lost access to domains in the interim.
A registrar is bad enough, but can you imagine what would happen if an entire registry, such as VeriSign, went bust? The registry for .travel almost called it quits this year. Thank god no one cares about .travel. The registry was saved (for now) with a small investment. Hopefully recent changes to .travel registration rules will make it more profitable.
#1. Attacks on the domain industry and the crackdown on typos. Whenever people make money, jealous people start to chip away at it. This year saw a growing number of attacks on legitimate domain owners. But much of this is due to some not-so-ethical domainers. And that relates to a second trend — 2007 was the year that owning trademark typos became unpopular. One problem is that some of the biggest domain companies, including iREIT and Marchex (NASDAQ: MCHX) own a lot of trademark typos. iREIT just settled a lawsuit with Verizon involving typos.
This year saw the birth of CADNA, a lobbying group representing big companies that are fed up with trademark infringement. Like many lobbyists, this group appears to be making up stats to further their cause. It doesn’t help their cause that at least two of their members, Dell (NASDAQ: DELL) and Verizon (NYSE: VZ) are participating in their own forms of typosquatting. Both companies, along with computer manufacturer Gateway, are redirecting typo domains to their own ad-supported portals.
Another growing trend involves large companies participating in “Reverse Domain Hijacking”, whereby they file bogus UDRP claims. Major League Baseball’s California Angels went after the owner of Angels.com this year. Then there’s Hulu.com, which the owners of LuLu.com think is confusingly similar to their own name. Don’t forget about Florida Weekly. The list goes on and on.
Unfortunately, this trend of bad press and attacks is something we’ll likely see continue. Typosquatters make lots of money and give the industry a bad name. There’s still lots of press about bad domainers, and jealous observers are upset they missed out on the goldrush.
So there you have it, Domain Name Wire’s 2007 review. Disagree? Let it rip.