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If you play the ICANN game, expect to get burned

More wasted money and resources. Get used to it.

It’s never pretty seeing the sausage get made.

It hasn’t been pretty seeing the new TLD program launch.

A handful of companies invested a lot of money early on as they worked to help form ICANN’s new top level domain program. As the program creation process dragged on they spent money on salaries, office space, etc. As it became clear that the process was going to take longer than expected they ended up laying off staff.

I recall talking to one new TLD consultant a couple years ago. He (half) joked about explaining to his family why they had to scrimp. He had been working from savings for years.

I didn’t feel too bad for these companies and consultants. They knew the game they were getting in to. They were creating a business based on an as yet to be defined process being developed by a non-profit run like a government agency. They were taking a risk with a potentially big reward, and those don’t always work out.

Now, however, ICANN has accepted over $350 million of new TLD applicants’ money and they’re still messing up.

During a session on new top level domain batching yesterday, an applicant stepped up the the mic to express his frustration. It doesn’t appear that the transcript is online yet, so I’m going to paraphrase.

“We never liked the digital archery system. But you told us it was required if we wanted to get in the first batch. So we invested three months of our engineer’s time to develop a system that would produce good results. Now you’re changing direction.”

This wasn’t some big applicant. I believe he said he’d applied for two domains. But to him, he’s made a substantial investment. He invested even more money to make sure he didn’t get screwed in digital archery, and this money was probably wasted.

ICANN did the right thing suspending (and hopefully canning) digital archery. But it waited too long. Countless people told ICANN there were problems with the system. We also had a high degree of certainty that ICANN would mess up the technical aspects of the system after what happened with TAS. Yet ICANN pushed on.

It seems that ICANN does this a lot. It wants to save face, so it doesn’t admit there are problems. Then the problems become too big to ignore. So it backtracks, but at that point even more damage has been done to both its credibility and people that are playing the game.

I don’t feel bad for new TLD applicants who invested lots of money early on before the process was settled; these were people who wanted to shape the process. And I don’t feel bad for companies that tried to make a buck off of digital archery.

But now that companies have given millions of dollars to ICANN, they should expect better.

Unfortunately, they should also expect to continue to get burned.

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  1. Jon says

    I have been convinced for a long time that the real goal of ICANN is not to launch new tlds but to get the whole thing in permanent legal limbo. That way there are continuing legal challenges and various claims from different directions/parties, and ICANN keeps collecting new fat fees from everyone and keeps “studying”, “analyzing”, “determining”, “addressing” them. Any time any third party brings up any issue, someone at ICANN is now being payed $ hundreds per hour to address this issue.

  2. Ron Jackson says

    One of the most memorable talks I ever heard at a domain conference was in Australia in late 2008 when Page Howe talked about how
    disastrous his company’s dealings with ICANN were over a decade ago when they attempted to get the .kids extension.

    After awarding a few new TLDS ICANN abruptly stopped consideration of any more, leaving the .kids application sitting at the top of the stack as the next one that would have been ruled on. No action was ever taken on it, leaving the years of work and piles of money poured into it to swirl down the drain. They were talking about this new TLD program at that 2008 show and Page declared that he would never again be involved in ANY venture whose fate was in ICANN’s hands. It was a real horror story that I wish everyone could have heard – might have saved a lot of people a lot of heartache today and in the months (and years) to come.

  3. Rob says

    i think icann have known from the beginning that most new tlds will not be successful, and they also know that the implementation has been botched too. this is just a great big revenue raising exercise, so the title of the article “… expect to get burned” rings true for me, i reckon it was the plan right from the outset. despite appearances, they know what they’re doing.

    if anyone knows how to raise millions of dollars and deliver virtually nothing, it’s icann. the dollars are more important than the domains.

  4. JP says

    ICANN is in an untouchable class. People can piss and moan all they want. Doesnt matter. I give ICANN credit for at least entertaining apologies and back pedaling as if it were web neccessary.

    Serious question here if someone can answer it: Aside from essentially an overthrow, what means is there to force some accountability on ICANN?

  5. Tell It Like It Iz says

    The gtld’s will ultimately fail. Every single one of them. Anyone who does not see that writing on the wall and still pursues them while investing hard earned money is a fool. No sympathy whatsoever.

  6. Vika says

    I think I’m quite critical of ICANN particularly in relation to how it handles the new gtld process. However, saying ICANN knew from the start new gtlds would fail from the start appears harsh on ICANN because the new gtld interest originated largely from industry players in the gnso side of the icann community, and not so much from ICANN the organisation.

    So, yes, ICANN (the organisation) studied the project’s feasibility over time & consulted widely, but largely because the interest was from the registry & registrar industry (gnso), not ICANN as an entity.

    It’s the guys who’re getting burned (registries & registrars) who primarily want to make money. Of course, ICANN the organisation then took advantage of this under the pretext of raising the entry barrier.

    I agree (though) ICANN is just not handling the whole thing right: waiting until late to make decisions on digital archery, the TAS failure, etc. Plus the R185k fee has always been excessive.

    What’s more concerning is the emerging news here in Prague that the canning of digital archery means more delays before ICANN can start evaluating the applications. Now that would be really, really bad for new gtld investors, but more good news for already existing TLDs as they get more time to increase their market size.

  7. A. Non says

    What that applicant who was complaining about ICANN changing direction didn’t say is that he runs Digital Archery Experts, which offered a digital archery service for $20,000. So he was really complaining that he wasn’t going to make money off the misery of other applicants.

    Things are not always what appear to be at first.

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