Crazy Domain Insane

July 29, 2008 on 9:35 am | In Business, Rants, Tech News by Josh Jones |

My early days at DreamHost.

There’s something I’ve always hated about the web hosting business.

No, it’s not the cut-throat competition, the crazy customers, or the California climate.

And NO, it’s not the 5-hour work week NOR the oodles of money either… those are fine.

It’s the domain names.

(And, by extension, ICANN.)

The problem with ICANN, as I may have mentioned before, is that they are an organization created to serve a need that just doesn’t need serving.

They do get things right once a decade though, like finally fixing the “domain tasting” problem.

But do they really need meetings in Fiji, Geneva, South Africa, etc…, along with a $20 MILLION annual budget to finally do what registrars had been telling them to since the Clinton presidency?

And now, ICANN’s made a bold new move that they claim results in “a massive increase in the ‘real estate’ of the Internet.”… the open creation of new TLDs (top-level domains).

So… what does this “open creation of new TLDs” actually mean.

Well, what it DOESN’T mean is that you’ll be able to go to any registrar and just register joshisawesome.believeit. Which is too bad, because if that were the case, everybody would finally have to belive it.

Believe it or NOT!

Nope. Instead, all that’s happening is now “anybody” can apply to start a new TLD… as long as they explain to ICANN how it will be used, prove to ICANN they have the technical prowess to run a registry, and pay ICANN an estimated $100,000 to $500,000.

Call me crazy cuckoo, but I believe that’s exactly how the new TLD creation process works now!

You know .info, .biz, .coop, .asia and all those other new TLDs? Pretty sure those went through a process exactly like ICANN is describing now for future TLDs.

In the announcement they did say that people aren’t going to be able to register trademarks (like .pepsi), nor offensive words (like .dreamhost), nor I assume TLDs less than 3 letters (like .i).

What exactly is changing here?

As far as I can tell, the only thing ICANN is saying is that they’re finally standardizing the process for applying for new TLDs. The goal I guess being to make it faster and easier to add more and more TLDs in the future…

Which is to whose benefit?

Have you ever met a person (or company) not involved in the domain name industry suggest the need for a new TLD? Ever? I haven’t!

There is honestly no demand for new TLDs (besides that for newly created countries, which are known as ccTLDs, and are not what we’re talking about here) from anybody who doesn’t stand to make money from the registration of domain names.

And that is because there’s only one thing that makes a particular domain name desirable for legitimate use: clarity.

Our president answering a question about .la domains.

That’s it. That’s why brand names and generic word domains are valuable, that’s why short domains are valuable, and that’s why no matter how many new TLDs are created, everybody still wants .com.

It is a huge obstacle for any TLD to offer a domain that is clearer overall for its intended use than some still available .com. Blame it on consumer ignorance, but I know I’d still rather have jjflowerslosangeles.com than flowers.la.

(And who types URLs anyway these days?)

Again I must ask, all these new TLDs are to whose benefit?

As far as I can see, the only possible beneficiaries are those actually in the domain name monetization industry.

More possible TLDs means more possible typos, more defensive registrations by trademark holders, and possibly some money to be made from the few suckers who don’t realize that flowers.la is not a clear domain.

What new TLDs will be made?

Hmm… we’re not going to be seeing company-based TLDs (e.g. .ibm, .coke) anytime soon; I doubt IBM is that interested in switching over from ibm.com. And since ICANN announced people can’t register trademark infringing TLDs, IBM won’t have to do it defensively either.

I guess I could see a case being made for TLDs that better categorize the type of site being visited, perhaps things like .blog, .wiki, .forum, .shop. Except, we’ve already got sub-domains for that!

In fact, www.blah.blog is exactly the same number of characters at blog.blah.com; all we’d be doing is switching a .com for a www. (And don’t try to say people would just use http://blah.blog/… that’d be even less clear!)

Not to mention, where you once had just one domain name to manage (and pay for), you’ve now got dozens… all with different registries, different rules, and probably different expiration dates.

Maybe there’s a case for making more location-based TLDs, perhaps things like .nyc, .sf, .miami, .toledo. But again, we’ve already got the country-code TLDs, and besides, isn’t the Internet supposed to be international? Just use local search to find local stuff.

(Can you really see people just guessing the URL “www.taxi.chicago” directly on their iPhone 4G. Ha, it is to laugh!)

I had no idea Ohio was even habitable!

What about price?

I don’t know if ICANN is going to just charge just a flat fee per TLD, or if they’re going to keep charging a per-domain fee like they do now. If it’s the status quo, then there is really no hope for interesting new uses of TLDs.

If, however, there is no incremental fee to ICANN for more domain names… welcome to the dawning of the age of domainius! Free domainius, that is.

Of course, any free TLDs would have to be tied to some particular application, otherwise squatters would immediately register every possible domain and put them up for auction.

I can see a free email provider getting .mail, a free blog host .blog, a free photo site .pics.

(There’s not that much of a benefit in having josh.blog as opposed to say, josh.blogger.com … but I guess since you’re going to be the 10,000,000th result on Google, you might as well go for the shorter URL!)

Express your unique individuality with a .blog domain today!

Auctions Smauctions

Did you see recently that the guy in charge of domain auctions at GoDaddy was discovered bidding up their own auctions?! That is some real bush league crap; to be totally expected throughout the entire domain name industry.

In fact, in case this blog post isn’t loooooooooong enough for you, let me now take a moment to relate a personal anecdote of mine about a domain auction.

Back in January, my wife was starting a floral design business, and had decided upon a name for it. Unfortunately, the obviously best domain name for her website was already taken, and being used by a squatter on sedo.com. Rather than dealing with them, she just registered a slightly longer variation that was still available.

Well, her birthday was coming up, so I decided to see what it’d cost to get that “best” domain. I went to the site, clicked the link to “make an offer”, and entered $100.

Immediately my bid was rejected!

It said the minimum offer the owner of this domain would accept was $777! Highway robbery!

After thinking about it for a little while, I figured, what the hey, it’s a birthday present, and I want to see how this thing works, so I made a (completely insane) bid for $777.

Automatically the system responded saying the owner had made a “counter-offer” back… $7770!!!

(How iiiiiiiiiiiiiiinteresting… sedo has a completely automated system for domain owners to counter-bid on domains.)

Well, harrumph. I raised my offer to $800. Immediately I got a “response” from the seller staying firm at $7770, and that was their final offer!

At this point I was curious… would they lower their price at all? So, I countered back with what I pretty much figured was the most I’d spend for this (completely of no value to anybody but my wife) domain, $1150.

What happened next really surprised me… I got another automated message stating that I had surpassed some secret minimum offer the seller had set at which they were, no not willing to actually sell the domain for, but at which they were okay with automatically putting it up for a seven-day auction on the front page of sedo.com… and my offer was the starting “bid”!

Gee thanks!

That explained why there are so many domains on that page with just one bid yet really high prices!

Well, at that point I figured I’d just sit and wait… nobody else was going to be bidding more than $1150 for this obscure domain name! And, the auction was ending the day before my wife’s birthday anyway, so the timing worked out.

I waited the whole week, and of course, nothing happened. The auction was going to end at 8:04 AM on a Saturday, but I didn’t even plan on waking up to watch the end.

Whoops. When I did wake up, at 8:12 AM, I (sneakily) immediately checked on the auction… only to find that somebody else had won; with a bid of $1175 at 7:56 AM!

I wasn’t horribly upset; after all $1150 was an order of magnitude more than I’d intended to pay. But I just knew in my gut of guts (I have four) that the winning bidder was either the original seller, somebody working for sedo.com, or somebody who figured I’d pay even more to buy it from them later! One thing I knew it wasn’t was anybody intending to actually use the domain.

The Winner

You’re still here?

That, in a large ostrich nutshell, is why I hate domain names. The secondary domain name industry exists purely to squeeze profit from consumer confusion, artificial scarcity, and literal extortion. No actual value has been added to the universe, just a redistribution of money from people who have a valid use for a clear domain to people who registered that clear domain first.

And this is not, I repeat not, sour grapes of wrath by me, just because back in 1994 (when I first discovered whois) I checked all these big public company domain names like honda.com, toyota.com, and mcdonalds.com, (I wasn’t too creative back then) and found them all to be AVAILABLE.

I thought to myself, “Whoa. These companies would probably pay hundreds of dollars for their domains in a year or two!” To top it off, way back then domain names were completely free… you only had to apply for them with Network Solutions.

But, I decided against it, entirely because I thought it’d be sleazy. I swear it was not because I was afraid of getting sued, nor because I didn’t actually know exactly how to apply for a domain.

Nope, it was solely due to my irreproachable morals and incredible dignity.

Who will raise Huey, Dewey, and Louie?

You see, I decided to take the noble path and start DreamHost Web Hosting, where we earn our money fair and square: through over-selling, over-charging, and, every once in a long while, even over-blogging.

25 Responses to “Crazy Domain Insane”

  1. dinu Says:
    July 29th, 2008 at 9:42 am

    LOL that’s crazy !!

  2. Christian Calzadillas Says:
    July 29th, 2008 at 9:52 am

    I am SO HAPPY I don’t have to deal with Network Solutions anymore!!

  3. Peter Says:
    July 29th, 2008 at 10:09 am

    The only non-.com TDL I ever thought would be useful was .movie because it is near impossible to remember what the url at the end of that movie trailer is. darkknight.com? darkknightmovie.com? darkknight.movies.com? thedarkknight.com? darkknight.movie would make sense.

    P.S. Turns out is it thedarkknight.warnerbros.com

  4. mhuyck Says:
    July 29th, 2008 at 10:43 am

    Psst — hey, Peter. There’s this cool web site called google.com where you can search for things. You could put “darkknight” into the little text box on their home page and you will find the answer to your question:

    http://www.google.com/search?q=darkknight

    Don’t tell anyone else, though, because I’m afraid it might get too popular and the searches might get slower. Or something.

  5. TB Says:
    July 29th, 2008 at 10:46 am

    When you’re on a cell phone and you’re looking for more info on a movie (be it movie times, the director, the star, etc)… searching on Google is time wasted typing. I’d rather just just type in nameofmovie.movie (e.g. darkknight.movie) and voila, all the info on it.

    But then again, I’d *much* rather just type in darkknight.mobile for a site optimized for mobile devices. One can wish…

  6. Terri Says:
    July 29th, 2008 at 2:35 pm

    “But do they really need meetings in Fiji, Geneva, South Africa, etc…, along with a $20 MILLION annual budget to finally do what registrars had been telling them to since the Clinton presidency?”

    Ex-ICANN employee speaking up here!

    The meetings - yes, believe it or not they need those. There’s a lot of outcry already from the international community that ICANN resides in California and operates under California law. A lot of people in other countries are suspicious of American influence over the infrastructure of the internet. The meetings are a way for a lot of different people to get in their $0.02 about internet policy.

    I guess you forgot about the whole thing with Verisign putting ads in place of not found errors for .com and .org. ICANN was the one who put the smackdown on that and got sued by Verisign for their effort.

    The interior of ICANN, the day-to-day workings, felt like a combination of government policy and core engineering. While I can dig some of your concerns (domain name squatting policy is worthless - much easier to just hire a lawyer and go after the jerks yourself), there is a lot going on there that may not be immediately apparent.

    Also, ICANN doesn’t like to make this too apparent, but they’re also part of IANA - which controls the root registry. Without IANA, the root kind of flies apart. Without root, there is no DNS. That’s a big one.

  7. Tijl Says:
    July 30th, 2008 at 3:00 am

    Actually, there are some regions who are interested in their own TLD. The Catalonians already have their .cat. In Flanders, some people want a .vl, but they can’t get it, because 2 letter TLDs are reserved for countries. So some ministers in the Flemish government seem to be willing to settle for .vla instead. Not that it’s worth the investment. They’ll get their .vl when Belgium breaks apart in a few years anyway. (but that might be wishful thinking)

  8. douglas Says:
    July 30th, 2008 at 9:24 am

    No mention of .xxx? Whenever I hear about the new TLDs this is always brought up.

  9. Taylor Says:
    July 30th, 2008 at 10:03 am

    Great post!

  10. Jim DeLaHunt Says:
    July 30th, 2008 at 12:11 pm

    There is one very compelling reason for a new TLD: non-ASCII characters. Imagine 百度.中国 instead of baidu.com, or Кремль.Россия instead of kremlin.ru . Such TLDs would have greater clarity for many internet users, according to what I read.

  11. Cariel Says:
    July 30th, 2008 at 2:39 pm

    I think the .dk, .hk, .tw, .cn, .co.jp, co.uk, etc were very useful for determining the country of origin and therefore language of websites.

  12. Terri Says:
    August 1st, 2008 at 10:13 am

    Cariel: That’s useful for English speakers, but not so much for anyone else. One of the things ICANN is working on furiously is Internationalized Domain Names so that those who do not speak English or are familiar with a Western-based alphabet will have an easier time navigating the Internet.

  13. dwr Says:
    August 1st, 2008 at 11:40 pm

    Well, domain squatters just suck. I almost became one myself, and felt terrible about it when people would send me an offer for one of the domains I had and I would ask for much more, because I thought the domain was “worth a fortune”.

    I had no intention of *using* the domains, but I would tell people who offered that I had big plans for it so would require a significant offer to consider finding another for myself.

    I realized how badly I despised people who did that with domains that *I* wanted and were told high asking prices, despite having them parked with an ad company. That is something I did not do for long… park with an ad company… I felt the absolutely terrible about contributing to that, because I CANNOT STAND to search something in Google and be sent to an ad parking page, or find one in what was an old link to useful information… long expired and snatched.

    I canceled every domain I owned (releasing them while I still had time left on them) that I did not plan to actually use. I lost a LOT of money… that was just outright burning what was seen as an “investment”.

    I suppose it still worked out to be so, because I learned a LOT about where I wanted to go as a result of brainstorming domain purchases, and having and working with the domains on a daily basis… it helped me to run up on good ideas for direction that would have not been though of under standard circumstances. It taught me, both directly and indirectly, enough to hold the value of about a college degree in something that there could be no actual college degree for… it was the kind of things that a man (or woman) must simply learn and experience on their own.

    I suppose one of the morals of the story could be that it’s good to just jump in there and try some shit out… brainstorm for a better path with everything you’ve got… it’s worth it when it works out, but try to find and have some moral boundaries to what you’re willing to do to find $. If you are a domain squatter reading this, you should be ashamed of yourself, and may the soles of your shoes easily find their way to dog turds and chewing gum, often and forever hereout.

  14. Lozbo Says:
    August 8th, 2008 at 1:54 pm

    may the soles of your shoes easily find their way to dog turds and chewing gum, often and forever hereout

    And may the laser blades of a thousand jedi oompa loompas swing their way through your impure selves… amen.

  15. Dane Says:
    August 12th, 2008 at 10:28 pm

    man you could of put your kids through college with mcdonalds.com !!!111

  16. Lady Says:
    August 12th, 2008 at 11:07 pm

    The first picture of this post makes me think that maybe most, if not all, of the companies selling domain names for unbelieveable prices get their employees from used car sales.
    I mean, it would make sense if you stop and think about it. XD

    I did bother to read this entire, long post. (Believe me, it’s not so long compared to some of mine, plus it has pictures so as not to bore the reader. See? I know your secret!)

  17. Logan Says:
    August 21st, 2008 at 10:29 pm

    (Sorry for the super late commenting, I just got around to reading a backlog RSS feeds.)

    I suppose one good think that would come out of this ICANN legislation is that companies like DreamHost can benefit from having a .ndn (or something along those lines) TLD for inner-network use (like spunky.ndn or arizona.ndn). Companies like eBay could use .ebay for the different categories (autos.ebay, computers.ebay, etc). Especially since both of these companies have the ability to be a registrar. =P

    This kind of legislation opens up a new world of opportunity, good and bad…

    Just my two bits.
    - Logan

  18. Kolo Says:
    September 23rd, 2008 at 12:50 pm

    Logan, and why the autos.ebay is better than autos.ebay.com or spunky.nbn is better than spunky.dreamhost.com?

  19. Martin Barker Says:
    October 2nd, 2008 at 1:19 am

    If i had the funds i would setup a cheap one,

    You dont need mutch processing power to run a TDL, what a couple of thousond connections a seconds or any thing lol,

    But there a web Servers out there that cope with more just a couple of deadicated servers and a root one that can loadbalance no more then £500 a month

    Plus the TDL Registration if i had the money i would Sell domains for about £1 eatch a year £2 for first registration this would create a big demand and what so £100,000 so i would just need to sell about 101,000 a year to keep the costs of runnning the system down then whats the problem

    I think this is grate news if only there were a company willing to do this and put the time in people allways want cheap that is why the .uk domain set of so well £3 a time and people love it

    Its just a bout supply and demand

  20. sunchaser Says:
    November 1st, 2008 at 9:28 am

    Big brother is watching you.
    http://www.icannwatch.org/articles/08/07/30/115214.shtml

    Josh, is it possible to connect with you through email? there are few ideas how to try to fix this problem.

  21. Jothan Says:
    November 6th, 2008 at 12:30 am

    Josh, this is a mondo rant and there’s a lot of good points made.

    I host my personal blog with you folks on Dreamhost and talk about TLDs all the time.

    By the way didn’t Dreamhost operate a ccTLD for a short span of time? What happened there?

    -Jothan

  22. Sean Stafford Says:
    December 30th, 2008 at 8:11 am

    Firstly, there needs to be a distinction made here about what a squatter is and what a domainer is.

    Domainer does not = squatter.

    A domainer buys up generic domain names for monetization purposes. A “squatter” will buy domain names of trademarked companies for the sole purposes of selling those names to those companies for a profit.

    The secondary domain market exists for the same reason the real estate market exists.

    If you think a person who owns generic domains names (ex: this.com, that.com, hi.com, etc.com) is a squatter, then you’re wrong.

    A domainer is no different than a real estate owner. Just because there is nothing on a plot of land gives does not give any other person any new found right to do anything, other than complain.

    If you own 100 tracts of land and you drill oil or natural gas off each, then you make a recurring revenue from it. It does not have to be developed or fully developed to make money. Just because someone comes along and says they can do so much better with that land does not mean they are entitled to it.

    Almost all of the land in the world is gone and owned by someone. A fraction of all domain names that CAN be registered actually are.

    If you want a domain name that someone else owns, you have to pay for it. If you search for a slightly different domain name, more than likely you can get it for 8 bucks.

    Ex: If the domain you want is listed for sale for 8 bucks, take a look and see if the .US is registered. Or, see if the .CA is registered (if you are Canadian,) or see if the .net is registered.

    Every single person who wants a domain name has the opportunity to get that domain, or a *similiar* domain at around 8 bucks. You can’t do that with any tract of land.

    If HAVE TO HAVE a certain domain, then you will have to pay if it’s already registered.

    And just to prove my point, let’s change this quote:

    “The real estate industry exists purely to squeeze profit from consumer confusion, artificial scarcity, and literal extortion. No actual value has been added to the universe, just a redistribution of money from people who have a valid use for a clear plot of land to people who bought that clear plot of land first.”

    —

    So, before one attacks domainers, you may take up the big fight first and fight for land redistribution from those who own more than one plot of land.

    But if we did that….wouldn’t it be communism?

    Happy Domaining!

    Sean Stafford
    http://www.domaingraduate.com

  23. Chris Desouza Says:
    December 30th, 2008 at 2:11 pm

    Josh,
    You need to get a life and live a little dude. You are way behind the curve, you moron. If you were my kid with a though process like that, I’d ground you for at least a decade until you changed your view of the online world.

    The complexity of living in a capitalistic society rewards those who see the future and not those like you who crib and cry over possessed toys, which you never owned in the first place.

    Try barging into a real estate office and demand their right owners hand over their piece of undeveloped property as some asset squatted upon.

    Ignorant fools like you give entrepreneurship a bad name.

    Some dude dropped OmahaTours.com (Yes, I am blatantly promoting it as an example so Morons like you can fathom the disparity in intellect) and I picked it up.

    I have no intention to drive around the city of Omaha greeting their guests. So, you are telling me, I should not bank upon an opportunity to own, develop, sell or make use of this valuable piece of online real estate. Or should the Internet govern rights of inherent domains and let sleeping beauties such as your wife come along when they are prepared to start a business as God’s true rightful owner.

    Someone like your wife comes around wanting to get the name for their little project in maybe the next 5 years or whenever someone finds the itch to start a business.

    Please do me a favor. Buy some names for your kids before they grow to be adults. You don’t want them to meet the same fate as your wife.

  24. Dufus Says:
    December 31st, 2008 at 10:15 am

    Honda.com that you supposedly checked and found it available in 1994, was registered in 1989. As for the other “arguments” against buying domains to resell for profit, the previous poster covered me already.

  25. Chicago Web Design Says:
    January 7th, 2009 at 7:14 pm

    The meetings - yes, believe it or not they need those. There’s a lot of outcry already from the international community that ICANN resides in California and operates under California law. A lot of people in other countries are suspicious of American influence over the infrastructure of the internet. The meetings are a way for a lot of different people to get in their $0.02 about internet policy.

    This is great Terri…thanks for the great read.

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