New top level domain name applicants in contention sets have two remaining options for resolving who gets to “own” each string: Settle it amongst themselves or participate in an ICANN “auction of last resort”.
So far a trickle of contention sets have been settled via private auctions (the first option), and the ICANN auctions are set to begin next month.
On the face of it, the private auction is the way to go. The “losers” in such negotiations walk away with a bunch of cash.
Yet some new TLD applicants don’t like that model. There are two main reasons I’ve heard that new TLD applicants don’t want to participate in private auctions.
First, some want to delay as long as possible to bleed their competitors dry. They’re spending cash every month, and the longer it takes the less money they have to win an auction.
Second, and more common, is the desire to not set a precedent for round 2 of new TLDs. If companies pay off their rivals this time, won’t those rivals apply for even more domains next time with the hope to get paid off again?
In comes the Domain Name Association with an alternative plan. Under this plan much of the final bid amount will be directly invested in furthering new TLDs through marketing and other mechanisms.
I understand this alternative has been discussed for a long time. It makes sense and I think it will gain traction.
The model still allows for some sort of payoff to losing bidders, to be determined by all auction participants. It also is auction provider-agnostic.
Some of the biggest new TLD applicants (including private auction holdouts to date) are members of Domain Name Association. Presumably some are on board for this plan.
Can you imagine the marketing impact a unified spend of tens of millions of dollars could have on new TLDs overall?