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"Greed is good." Really?
Friday, January 18. 2008
Those of you who have been following the .MOBI launch know that as part of that process, a number of "premium" names were put on auction rather than simply released by the registry like all the other names.
What are premium names? "dotMobi premium names are a set of more than 5,000 commonly used words that dotMobi set aside during its formation," is your answer, straight from the registry's mouth.
Three auctions have been held, each one organised in conjunction with Sedo, the second-hand domain specialists. And according to mTLD (dotMobi's official name), the first two raised more than USD 1.6 million in revenue.
Now there's a truly staggering amount.
Don't get me wrong, I'm not surprised that top quality names in a new extension would command such interest. If anything, to get their hands on names like sports.mobi or wine.mobi, I'd expect domain-savvy investors to fork out more…
But I am surprised by the registry's attitude. Since the start of this process, I've been under the impression that the .MOBI registry didn't really know what it wanted to be: a domain investor or an extension manager. If it's the latter, I don't think they should be doing anything other than ensuring the stability and equality of their extension. If it's the former, then they shouldn't be in the registry business.
To be honest, I'm not far off being shocked that a registry would try to raise substantial financial benefits from a resource which they have a monopoly over. "dotMobi is the first domain company to offer these selected premium names via an auction process," the registry proudly boasts on its website. Thank God for that! I don't know about you, but I'm thankful that no registry's done this before and I'm hopeful that others won't go down the same path. For who benefits from the 1.6 million raised so far? Certainly not the domain registrants who should have been buying these domains at standard prices as part of .MOBI's general launch program…
Anyway, if I'm shocked, .MOBI auction participants are now irate. It seems the process went all pear-shaped in the third auction when Sedo's systems crashed under the load, preventing many bids from getting through. mTLD has since declared the auction results void (much to the delight of those who won the names, as you can imagine…) and now we're apparently set to see a flurry of legal action as both third auction losers, and those who didn't get the names they wanted in the first two auctions, are trying to pick the system apart.
I won't dwell on the specifics. Computer systems do crash… And when you're trying to build people up into a frenzy of greed over the commodities you sell, you can't be surprised when some of those very people resort to legal action…
But I do think what's happening here validates my argument that registries should put all names on an equal footing and simply act as the impartial custodians of an Internet resource that they're supposed to be.
Unlike any other domain, the .mobi domain has specific requirements designed to ensure a positive experience for mobile users around the world on the widest number of phones. There are more than 80,000,000 .com / .net / .org sites but only 0.03% are mobile friendly. Since a complete lack of URL convention has hurt mobile web discovery, enforceable standards ensure a .mobi site works on a mobile and represents brands and businesses as they want to be seen. In short, .mobi is designed to indicate a trustworthy mobile experience which no other domain address formulation can do.
That means each .mobi site needs to conform to three simple compliance rules:
1. XHTML programming
2. no “www”
3. no frames
That also means dotMobi has to build tools so that developers can easily create sites that conform to these requirements, along with creating tools to check that sites are meeting these requirements.
To that end, these premium name proceeds have allowed dotMobi to build an extensive developer forum at dev.mobi, free tools like http://ready.mobi and http://site.mobi, plus upcoming tools like our device database. None of this would have been possible to do as quickly as dotMobi has done – and at no cost to developers – without using auction proceeds.
This work has created an entire mobile web ecosystem which was not focused until the arrival of the .mobi domain. To look at this from a “real estate” point of view, I’d suspect that the value of my address is likely to rise if the entire neighborhood is being built up. To say that another way, domain investors are actually investing in and contributing directly to the success of the whole mobile ecosystem which likely grows the value of their investments. This is unique for these investors and for a registry like dotMobi.
Thanks very much for your comment. While it's clear to me that .MOBI has real value and great potential, I still don't see how the registry moving out of its sole regulatory role to hold auctions helps create more value.
Domain investors will make the value of an extension go up if there's a real reason for that value to rise. This will happen naturally, without the need for any outside help. The market tends to regulate itself. Holding auctions at the launch of a new extension is something that strikes me as artificial, and it's certainly something that only the registry can do...
As I've stated before, I don't like registry-run auctions. To me, there's something simply not kosher about the guys that have a monopoly over a given resource, be it domain names or anything else, getting prospective buyers to bid instead of making sure
Tracked: Jan 29, 11:19
Did Pool, auction operator for the .ASIA Sunrise, rig some of the auctions to secure valuable names for itself or its CEO Richard Schreier?Both Pool and .ASIA registry DotAsia have had to go into major damage control after being accused of auction rigging
Tracked: May 19, 12:30
They're considered the most precious of all domain commodities: 1-character names.But they've been unavailable for years in all the major generic extensions (GTLDs). In fact, all 16 gTLD registries are obligated under the terms of their contracts with ICA
Tracked: May 30, 13:30