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Demand Media Wants to Introduce New Domain Names

Demand Media wants to offer new top level domain names using its eNom registrar.

The owner of the world’s second largest domain registrar, eNom, plans to apply to ICANN to offer new top level domains.

That’s the only plausible assumption based on the company’s one-sided comments to ICANN about the proposed new gTLDs. The comments were filed a couple days late, but are very thorough and cover every module. The company was in favor of every provision that will help Demand Media gain a competitive edge and complained about every provision that might hurt it.

Demand Media has experience promoting TLDs. The company has a partnership for .TV to promote the ccTLD, which it pushes through its eNom registrar channel.

In its cover letter to ICANN, Demand Media stokes ICANN’s ego, writing amongst other things “We believe these TLDs will inject innovation, investment, and new competition to the DNS to the strong benefit of consumers, businesses, Governments and the DNS itself”.

It also claims that “failure to stick with a Q2 2009 commencement for application submission will put some of the anticipated competition and innovation benefits to consumers at-risk”. If you’re wondering what difference Q2 versus Q4 will mean for innovation, the next sentence explains that it’s more an issue of hurting Demand Media:

“Like many others we have investors and business plans that rely on timely implementation of this process.”

The company’s comments focus on terms it feels would be too onerous on registries, such as quarterly audit rights (it wishes for semi-annual). Demand Media also has a number of concerns about the process for awarding the domains. For example, it says that if two companies apply for the same TLD, they should be able to form a joint venture to offer that domain rather than challenge each other to be the sole company offering it.

Here are some other comments by Demand Media.

Don’t require separation between registry and registrar. The company wants there to be no requirement of legal separation between registry and registrar. Since Demand Media owns registrar eNom, it wants to have full range to leverage eNom promoting the TLDs.

It also states that “Applicants may wish to have a specific corporate entity enter into the application process for tax, liability, or a number of other reasons…retaining [language disallowing this] could act to significantly suppress the number of applications that are submitted, especially those…by applicants who are affiliated with organizations with the native financial and technical wherewithal that would make them the ideal sort of applicant.” The company knows what it’s saying. Just look at how it set up AcquireThisName.com.

Just say ‘no’ to pricing caps. Demand media doesn’t want pricing caps. If it were only looking at new TLDs from a registrar perspective it would either want caps or not render an opinion. Obviously it only cares because it hopes to introduce new TLDs. The company references the concern of many people that the “equal treatment” clause in registry contracts would allow VeriSign to introduce variable pricing to .com. Demand Media argues this wouldn’t be the case because “we think the size and tenure of .COM is more than adequate justification for non-equal treatment regarding pricing and other provisions.”

Charge a high access fee, but offer high margins. Demand Media is in favor of the $185,000 application fee for a new TLD, arguing that it has been justified. It doesn’t like the ongoing $75,000 a year fee, saying it’s unjustified. In other words, the company wants the price of admission to be high so it faces less competition applying for new TLDs, and then the ongoing costs to be lower.

Here’s a summary of where constituents stand on new TLDs. See a pattern? Those that will make money want it and those that will lose money don’t. If you asked the man on the street, I suspect he’d say “no thanks.” Or perhaps “What’s a top level domain?”

Trademark owners – opposed
Domainers – mostly opposed
U.S. Department of Comerce – opposed (Ironically, this is the same group that created the charter with ICANN on which ICANN bases it’s mission to include adding new TLDs.)
Potential new registries – in favor
Trademark lawyers – in favor

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  1. RKB says

    I don’t think US gov is going to follow thru on its opposition to ICANN problems regarding variable pricing, pricing caps, and new TLDs. I have serious doubts given its past track record.

  2. mike says

    Everyone should move their names out of enom now. Their interface sucks anyway. No way to mass modify auth codes. Very tiresome trying to get auth codes one by one.

    Customer service is the worst in the industry. Takes days to hear back from them and then you only get a cut and paste answer.

    And now this. Every real domainer should move out. At this point Godaddy is better.

  3. Andrew says

    @ Marc – I suspect there are a number of trademark lawyers who are opposed, but I think trademark lawyers also stand to benefit financially. Even the lawyers who are filing briefs on behalf of their companies will ultimately benefit through job security.

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