Pricing and investment arguments are wrong.
Ethos Capital and Internet Society are working overtime to spin the deal to sell .org for $1.35 billion as a good thing. There are certainly some good things about it, but I cringe when I read certain talking points.
One is around pricing. Yesterday, from ISOC board member Mike Godwin:
But could it be at the public’s expense? What about the argument that the prices for domain-name renewals will soar? This argument ignores common sense — you don’t take over a successful business and price most of your customers out of the market or spur a mass migration to an alternative product. Not only would that permanently destroy any faith in .ORG — the business you just bought — but it also would undermine TLDs generally. (I’ve suggested, not entirely jokingly, that the proper response if anybody tries to extort huge renewal fees for .ORG is to launch a mass one-time conversion to the .WTF top-level domain. I’d happily lead any charge in the .WTF Resistance.) In any case, demand for TLDs isn’t inelastic, despite what the deal’s critics say — there are hundreds of TLDs and customers aren’t locked in. It takes only a few minutes of studying PIR’s year-by-year financials to see that jacking up domain-name renewal prices in the way the critics fear would be suicidal for PIR or any other registry that depends primarily on predictable renewal rates, and it would destroy the value of .ORG as well. I don’t think any of the companies that sought to buy PIR were dumb enough to invest a billion dollars in buying the .ORG business in order to destroy it.
And from Vint Cerf:
Moreover, as a for-profit company, PIR has a clear rationale for not driving away its customer base by any excessive raising of prices. Given current .org pricing, a 10% increase in price would be less than $1. Even if an organization had registered a dozen .org domain names, it is hard to believe that such an increase would be viewed as unsustainable for most non-profits. Of course, companies that hold domain names in the tens of thousands for speculative purposes might find such increases more troubling, but I don’t have much sympathy for that business model in the context of the organizations the .org brand is intended to serve.
This thinking ignores the economics of domain names. Godwin suggests that .org customers aren’t locked in. OK, then ISOC should figure out what would be involved with switching from InternetSociety.org to InternetSociety.charity. It would cost lots of money and time, and the headaches from switching email would last for years. True, there is price elasticity to domain demand. But for renewals, it takes a huge price increase to change demand.
Cerf is correct that most charities won’t blink an eye at a $1 increase in the cost of renewing their domain name, at least in the first world. But this assumes that Ethos and whoever owns .org in the future won’t raise prices more than 10% per year. Calling on Godwin’s words, jacking up .org renewal prices would not be ‘suicidal’ to .org. Even if renewals were $100 a year, it wouldn’t be worth the pain for most non-profits to switch.
The other issue I have is with the idea that Ethos can invest in .org to create new products and services for non-profits. It certainly can, but there’s no reason PIR can’t under the current arrangement. Cerf writes:
Second, when the operation of .org was transferred to the Internet Society, it created the non-profit called Public Interest Registry, or PIR. PIR’s primary objectives were, first, to operate .org and, second, to provide significant support for the Internet Society by essentially allocating any surplus from the operation of PIR to fund the Internet Society’s work in promoting a more accessible and secure Internet. This amounted to about $50 million a year, which was hugely helpful to the Internet Society but limited PIR’s ability to invest in improvements to the operation of .org or even the creation of new products and services for the non-profit community.
The idea that Public Interest Registry is cash-strapped because it has to send its profits to ISOC doesn’t hold water. PIR has been able to increase prices 10% per year for the past decade but hasn’t always done so. If it raises prices 10% this year, it gets another $10 million in its bank account that ISOC isn’t depending on. That’s not enough to invest in new products or services?
This isn’t to say the deal isn’t good for ISOC. Godwin does a good job explaining that domain name revenues aren’t certain, and this endowment gives ISOC certainty. That’s a selling point for ISOC and its constituents. But let’s be honest about possible ramifications of this deal.
I agree 200% with Vint Cerf : companies using a .ORG (or two) DON’T CARE about a small price increase. Only domainers do and domainers are not true representative of “usage”.
NOT TRUE.
Guess I’ll have to say it again. I’m an end user first, “domainer” second.
My “BUSINESS MODEL” is not to buy and register hundreds and sometimes over 1,000 domains for speculative selling/leasing. My business model is to buy and register that many domain names for END USE FIRST, for driving traffic, pursuing or discovering new advantageous uses, etc. As one who is only *secondarily* a “domainer,” I also list only *some* of them, but that virtually always is *not* the primary goal or use.
SO WHAT WE HAVE HERE – INCLUDING WITH VINT CERF – IS MINDLESS SHORT SIGHTED “EITHER/OR” THINKING.
Otherwise known as the so utterly basic FALLACY of FALSE DICHOTOMY.
Does anyone know where mindless shortsighted “either/or” thinking and lack of vision gets you?
This famous little girl alone can tell you all you need to know; I like to call her “the oracle of Old El Paso”:
https://www.youtube.com/watch?v=vqgSO8_cRio
PS: and it should go without saying, though maybe it doesn’t for those who are primarily or only domainers, that one of the “etc.’s” involved is that the cost of defensive registration alone adds up.
PPS: and “defensive” registration is about far more than defending a tm; it’s about defending a business idea at all whether there’s a tm or not.
Very hard to know what is what when these people come out “supporting” price rises. Jovenet is trying to get work as a new ltd consultant and I’m guessing is linked with Donuts and all these guys (or at least hopes to be).
What is Vint Cerf’s play in this? He must be connected to registries in some way?
Vint Cerf was the founding president of Internet Society
These arguments by all these Crooks coming out to defend a shady deal.Just because they have not been caught in these shady deal doesnt mean they are not greedy cooks.
These deal shows how shady in nature most people become when their selfish interest is what matters.
Where were the write ups and arguements from them before money exchanged hands.Karma will catch up with all of them and they better realize it extends to their innocent kids for the actions they are involved now .
Vint Cerf has been highly respected as one of the fathers of the internet. I hope the payoff is worth the loss of reputation when it comes to defending this deal.
Such an important internet figure essentially selling out and defending a private equity takeover of such an important public resource as a good thing. $$$… Pathetic.
Brad
I can answer that for you now: the answer is no.
The comments from Vint Cerf are all about PIR and what they are proposing and planning to do , realize there are no contractual agreements or clear signed documents stating what they will do.
“Ethos has proposed to create a Stewardship Council to advise the Board on key decisions that could affect .org users or the Internet ecosystem. It is my understanding that Ethos intends for the Stewardship Council to have considerable authority. ”
So this may happen and lets all consider how much power these Advisory Boards have historically shown in the past . Zero
“Ethos is also proposing to set up a Community Enablement Fund for the purpose of underwriting efforts beneficial to the .org community”
So like the .net fund ?
“Stewardship council” sounds like a PR move. They are proposing to run it as a for profit and I have little doubt the company will make business decisions.
NOT TRUE (Vint Cerf).
Guess I’ll have to say it again. I’m an end user first, “domainer” second.
My “BUSINESS MODEL” is not to buy and register hundreds and sometimes over 1,000 domains for speculative selling/leasing. My business model is to buy and register that many domain names for END USE FIRST, for driving traffic, pursuing or discovering new advantageous uses, etc. As one who is only *secondarily* a “domainer,” I also list only *some* of them, but that virtually always is *not* the primary goal or use.
SO WHAT WE HAVE HERE – INCLUDING WITH VINT CERF – IS MINDLESS SHORT SIGHTED “EITHER/OR” THINKING.
Otherwise known as the so utterly basic FALLACY of FALSE DICHOTOMY.
Does anyone know where mindless shortsighted “either/or” thinking and lack of vision gets you?
This famous little girl alone can tell you all you need to know; I like to call her “the oracle of Old El Paso”:
https://www.youtube.com/watch?v=vqgSO8_cRio
PS: and it should go without saying, though maybe it doesn’t for those who are primarily or only domainers, that one of the “etc.’s” involved is that the cost of defensive registration alone adds up.
The TLD’s; .COM, .NET and .ORG are priced much LOWER than the nTLDs for which claims are being made as the obvious “choice” for people to choose if they don’t like COM/NET/ORG prices increases.
That can only occur when COM/NET/ORG prices are GREATER than the other “choices” the market has.
In other words, COM/NET/ORG can raise their prices dramatically to match the alternatives. Which is at least a doubling of their current prices.
One the needs to consider that lower COM/NET/ORG prices might actually be holding down the prices of other TLDs. If COM/NET/ORG prices go up others can raise prices as well and there will be no significant change to registrations.
Prices WILL go up, and go up dramatically.
https://opensrs.com/services/domains/domain-pricing (enterprise)
COM $9.00
SE $22.00 <—-
TOP $7.50
NET $11.30
ORG $11.30
SHOP $27.00 <—-
INFO $14.00 <—-
APP $15.00 <—-
The .ORG and .COM registry WILL be increasing prices to at least $20. Other TLDs will raise their prices in response to .ORG and .COM raising prices.
Looking at phone service, its hard to find anything much less that $30 per month or $360 per year. For a business, the domain name is what gets your phone to ring. I can easily see businesses paying $500 per year for a domain name …. Many years ago a yellow pages listing cost about that much.
It is not so much that anybody needs .COM, its that the world needs a domain name as world internet GDP continues to rise … Just look around at your local malls, as they continue to be leveled and replaced by high density housing …
As for creating new products and services, please hit me with a clue stick on this one. I go to a registrar and I reg a domain name. What “new” product and services are we talking about? The only one I can think of is variable pricing, and that is not a service to customers. Like businesses paying higher property taxes than residential, and residential paying more than agricultural. Like premium prices domains versus non premium priced domains, aka variable pricing.
New TLDS are not real choices that people have. Businesses need to be on .com, and that is why the US govt will always have the say on that extension.
Unfortunately non profits need to be on .org but have been forgotten by the government.
I think the cause and effect was US gov control providing stability to encourage growth of the internet. At this point I think its the market not the government that is in control. Just look at Gab, and alternative media, and the many government actions of censorship that have occured. The gov is not in control anymore.
I think that .ORG is going to raise prices for all the reasons mentioned. Even if its just 10% per year, that is guarenteed “interest” on their investment. I think they will milk it more than that. They will watch regs rates and find to optimal pricing at which people will pay and then prices will stabilize. I think part of that will be variable pricing.
Somewhere in there it will be clear that the world will keep turning, the shine will keep shining, and the rain will keep falling in the face of much higher .ORG prices. Not that .ORG is somehow no longer a monopoly … But the foxes are in charge of the hen house as we have seen.
Verisign will follow, and for the reasons you mentioned, the amount they can raise prices will be far more than .ORG.
I’d also suggest there are many large corps that would love to pay $10,000 per year base reg fee, in order to get rid of the mom and pops that compete with them. at $10,000 we can kiss goodbye individual blogs that some would rather see not exists.
High regs fees is the ultimate censorship technique. Again going back to phones and utilities, $10,000 per month for such costs is common. So a domain name being the same as 1 months utilities is “DON’T CARE about a small price increase” as Jovenet stated it …. And at $10,000 fee, the .COM zone could drop to 1000th what it is and income stays the same. Large businesses could absorb the increase, and might even be grateful if it kill off competition.
So to be more direct, .COM has the greatest independence to price increases of any TLD. Not that the resulting shift to large corp usage will be a benefit to the average consumer. Amazon has ended the life of a number of malls in my area, with high density housing now going in. In other words, starting a bricks and mortar business is great, and where exactly are you going to put it that is gets foot traffic?
The sale of PIR is going to be the test case.
The government controls .com pricing, it is a fact.
PS – one thing life has taught me which should be obvious to all by now:
If people can do evil, they will do evil.
Ergo, any promises, assurances or statements about pricing without accompanying controls is pure BS.
Yes, they are just running out the clock. Once they know its impossible for anyone to stop it, then the stories will change. They always do.
Next up will be Verisign, with PIR having made the path easier for them.
Registering domains to get web traffic is also a form of domaining, and domaining conferences and blogs usually have talks and sections for this too. Domaining is not just flipping domains.
It should be obvious without saying I’m talking about end user traffic to end user websites that I publish, not domainer traffic to parking and domain landing pages.
So no, you are “fudging.”
Charles- great point
” high reg fees the ultimate censorship”. 1000+ yr? or like
commer rentals- $ volume based
I believe large platforms will take the place for most low end use.
Separate networks. Less vulnerable to global attacks.
Seamless connections of such is what’s in the oven.
To your quest re: services,
I can imagine many
site services
security services
payment/donation services- huge
credit cards/reward donations
network services- large .orgs
directories
promoting/branding
venue services
conferences
Sponsorships
in USA and other countries
connected forums
High profile donations
recruiting / job boards
legal certs/compliance for different parts of the world
(China has some stiff requirements)
Also, yes tiered regs.
base – registered orgs
community use (pledged)
for profit use (no pledge)
I think it would be a huge mistake to require 501 docs
They probably won’t as the .ngo and ong. already has strings
.coop does too = high reg fee.
The silver lining- for profit use will support lower reg fees for nons.
There is a lot of big money that needs a place to go
millineals and gen Z are well on they way to a more giving economy.
Big biz catering to the future Gens know that social good isn’t a passing fad.
Cheers