OnlineDomain.com Domain Name News & Opinions
VeriSign, Inc. (NASDAQ:VRSN) today announced the following information pertaining to the .web top-level domain (TLD):
“The Company entered into an agreement with Nu Dot Co LLC wherein the Company provided funds for Nu Dot Co’s bid for the .web TLD. We are pleased that the Nu Dot Co bid was successful.
We anticipate that Nu Dot Co will execute the .web Registry Agreement with the Internet Corporation for Assigned Names and Numbers (ICANN) and will then seek to assign the Registry Agreement to Verisign upon consent from ICANN.
As the most experienced and reliable registry operator, Verisign is well-positioned to widely distribute .web. Our expertise, infrastructure, and partner relationships will enable us to quickly grow .web and establish it as an additional option for registrants worldwide in the growing TLD marketplace. Our track record of over 19 years of uninterrupted availability means that businesses and individuals using .web as their online identity can be confident of being reliably found online. And these users, along with our global distribution partners, will benefit from the many new domain name choices that .web will offer.”
Verisign won the rights to the .web extension winning an auction for $135 million. Here is why I think they got .web.
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Verisign purchased .Web to further their monopoly in the domain name space. This gTLD expansion program by ICANN is starting to really smell like bad eggs. How are the smaller guys in the gTLD space to have a chance if ICANN goes and allows Verisign to purchase .Web? That seems to me to be an act of bad faith on ICANN’s part. I don’t blame Donuts for wanting to stop the auction. Verisign clearly has a monopoly in the domain name space and is trying to keep competitors out of it. Meanwhile, domain investors who have funded this whole expansion sit and wait for an after market to develop and it appears it will never develop.
I don’t see a monopoly here. Anyone was free to buy .web. Verisign only owns .web and a couple others. Donuts owns a lot more than that! .Com and .Net are contracts that expire every 6 years.
@Patrick Hipskind,
.WEB is just 1 TLD.
Other registry operators like Donuts, Rightside, Minds + Machines, Uniregistry, et al. operate SCADS of TLDs. And it’s in this sector of the domain industry where companies have been consolidating. For instance, Daniel Negari wanted to buy 4 TLDs from Rightside.
A far greater percentage of TLDs are owned by those companies than by Verisign. Put it this way, if China registers all 4-character domains across all suffixes, then Verisign’s TLDs would only account for a tiny tiny sliver of that name space.
.COM / .NET / .TV / .CC / .WEB are outnumbered by a factor of 200 to 1. How can that possibly be a monopoly? If you grant that .WEB gives Verisign an advantage, that’s simply a vote for .WEB in terms of quality. That isn’t an UNFAIR advantage. A thousand different nTLD registries are all attempting to persuade consumers to buy their own wares. If they cry foul merely because Verisign owns 1 more good TLD, wouldn’t that be an admission that their own inventory – which outnumber Verisign’s – is inferior?
If you’re measuring monopoly by existing registrations, then .WEB adds nothing, zero, zilch, nada. Verisign adding .WEB to its portfolio is no different from another registry operator adding 1 new gTLD. Whatever company might have obtained .WEB would still need to market it from scratch.
The monopoly argument can be made if it’s a case of 1 large company gobbling up another large company with established market share. But .WEB isn’t a company with market share. It’s a new untested product being launched by 1 company.
Logically, it’s no different from Apple launching a new device like the iPod. Competitors are free to launch whatever TLD products they’ve invested in. Everybody starts at the same starting line. And Verisign must run the race against 1000 competing TLDs.
By registration numbers Verisign clearly has a monopoly. Com and net add up to over 200,000 million. And of all the gTLDs Verisign got the best of the best, .Web. They can’t help but continue to grow their share of the market at a high growth pace.
This move isn’t going to help the small gTLDs at all. I’m pretty sure it will cause some of them to close their doors. Where do you think domain investors are going to start spending their money? I think a lot of investors are going to start investing in .Web when it hits general availability.
I think this was a shady move by ICANN. We’re two years in and there really is no after market. Dot club didn’t make their 1,000,000 mark yet though I think it is a good extension, but it lost $1 million last year. And Daniel is doing his best but continues to face an uphill battle.
Verisign now has all the best extensions, the highest registration numbers, and can afford to outspend all the others on advertising. I call that a monopoly.
@Patrick Hipskind,
Wikipedia’s first sentence: “A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity”.
Verisign is not the only supplier of domains. What you’re complaining about is the notion that consumers prefer .COM and .NET over a thousand other options. As you put it: “Verisign now has all the best extensions”.
If consumers were forced to choose .COM or .NET due to lack of alternatives, then THAT would be a monopoly. But the truth is the complete reverse of that. nTLD registries are all suppliers of domains too. They’ve given consumers 1000 additional options for this particular commodity.
It’s up to the nTLD registries to convince consumers to buy what they’re selling. Their failure to do so isn’t a consequence of Verisign’s “monopoly”. Consumers have a huge range of options; and we’re free to choose ANY of them. If consumers are ignoring the nTLDs, then that’s too bad. But that’s not monopoly; it’s free will! Consumers are voting according to their own TASTE.
You may as well complain that Levi’s Jeans has a monopoly on clothing because few men are wearing kilts.
I genuinely can’t believe how ignorant Konstantinos, and especially Joseph, sound here on this particular case.
Your Wikipedia definition is irrelevant, Joseph, simply because when a company gets so much power and money to bury other companies to be a sole provider of a good or service, then it is a monopoly. The whole idea is to allow fair business to those less affluent to be able to compete, and with this move, it proved that ICANN literally only opened this floodgate of new gTLDs for their own pocket money and absolutely nothing else, even worse, they openly allowed the practice of monopoly which most probably wouldn’t be allowed under normal government regulation procedures.
Let me be clear, Verisign despises the new gTLDs because even if you, and all the .COM investors in the world deny it, they deemed it as a threat to some extent. It became abundantly clear when they sued .XYZ for a laughable reason, and Verisign hasn’t stopped badmouthing the new gTLDs since the very beginning up until this point.
Now that’s all fine really, because Verisign had vested interest in their long established gTLDs, and they now had to face competition, but things became really ugly with this particular auction as first, Verisign ensured that a private auction wouldn’t happen, meaning no money would be distributed amongst the new gTLD operators, making nearly all of them poorer in the process (which equals less money for promoting, acquiring and marketing new gTLDs).
And on top of that, they have ensured no one else would get the absolute best ‘generic’ new gTLD in the process, simply because they have the financial might to do so. You see, the sole reason there are regulations in place is to stop a dominant powerhouse from having the ability to stomp newcomers simply because they have the power and finance to do so, this is exactly why in 2011 when AT&T wanted to purchase T-Mobile, the regulators said no to the deal on the basis that if second- and fourth-largest wireless carriers in America became one company, it would “substantially lessen competition”.
Right now what we have here is that the sole operator of the first, second, and third largest gTLDs has been given the ability to operate the fourth biggest gTLD. If that’s not a monopoly, then monopoly simply doesn’t exist.
Oh and please, the argument that there are hundreds of other new gTLDs is a moot one, why? Well because you’d have to be an idiot to think that .best and .web are of the same quality. Verisign getting ahold of .best would be akin to AT&T purchasing the 216th wireless mobile operator in the US, and the regulators wouldn’t even bat an eye on it. Everybody knows not all TLDs have the same potential and value, so let’s not fool ourselves and pretend that they do.
I wouldn’t want to speak for myself but Joseph is far from ignorant.
There is no monopoly by Verisign unless you write your own definition. As I said Verisign only owns 1 new gtld. (plus 2-3 IDN ones)
Verisign does not own .com and .net. In 8 years it could be Donuts or Uniregistry running these.
And a monopoly requires one sole provider of services or products PLUS the ability to set the prices. Clearly this is not happening here.
Joseph has explained every other aspect.
Konstantinos,
I know neither of you are ignorant, and I had no intention to sound mean in any way. I have explained that I thought this particular argument presented against Patrick was very poor, as it didn’t adhere to the reality of the situation.
I have replied to Joseph twice now (here and elsewhere) and I think I have made my points clear. And both of you are correct about the literal definition of monopoly, but I no longer argue over definition as I have found them to be fruitless.
You can see that through my new reply to Joseph, I refer to monopoly in the real-world approach in which a company tries to hold their monopolistic position. The book ‘Zero to One’ by Peter Thiel is partly about that and how as an entrepreneur, one should strive to employ such business model for long-term success, but that’s beside the point.
In this instance, Verisign is acting monopolistic by ensuring no penny would be distributed to those who applied for the gTLDs in the auctions, and no company with the agenda to pit .WEB against .COM will get such opportunity, so in turn they will remain the sole powerhouse in this industry (registries and not registrars or investors)
@B4B,
When disagreeing with someone, your position isn’t strengthened by calling the other person “ignorant”.
“Your Wikipedia definition is irrelevant …”
I see. It’s appropriate to declare something a monopoly, but it’s irrelevant to discuss the accepted definition of “monopoly”.
“… even if you, and all the .COM investors in the world deny it …
Focusing on who says something rather than on what is being said – that’s the ad hominem fallacy. Actually, what you’re insinuating is false. Neither Konstantinos nor I can be characterized as “.COM investors”. Konstantinos runs a website – Sold.Domains – whose sole purpose is to report nTLD domain sales. For my part, I’ve purchased domains in nearly 100 different suffixes; and I own several thousand domains in the nTLDs. If I disagree with you about there being some sort of insidious monopoly, it isn’t because I’m an enemy of the nTLDs.
” … this is exactly why in 2011 when AT&T wanted to purchase T-Mobile, the regulators said no to the deal on the basis that if second- and fourth-largest wireless carriers in America became one company, it would ‘substantially lessen competition’ … ”
No, not at all. Please re-read what I wrote above. .WEB isn’t the “4th-largest” anything. It has exactly zero customers. Your analogy WOULD be true if Verisign were buying the “4th-largest” registry operator. If Versign were to gobble up Donuts and Mind + Machines and Rightside and Radix and Uniregistry, then – yes, absolutely – THAT would be a monopoly of the sort you describe. But that’s not what has happened. Verisign bought the rights to launch 1 new product. It didn’t buy up the competition.
Those 1000+ nTLDs and the companies that operate them are all still out there in the free market. Consumers have 1000+ more domain suffixes to choose from than they did prior to 2014. These nTLDs are perfectly accessible on all the biggest registrars; so they have plenty of shelf space. In fact, the vast majority of nTLD products placed before consumers on the shelves are NOT owned by Verisign.
Your real complaint seems to be that Verisign owns the best TLDs and has a bigger budget than other companies. So? Suppose I decide to manufacture and sell computers. But my computers are inferior to Apple products. My marketing budget is smaller. And consumers continue to by Macs. Would I be right to point at Apple and shout “monopoly”?
My own sense of the word “monopoly” – which I think is the meaning generally understood by people – is simply this: Lack of consumer choice. But where domains are concerned, consumers have a vast menu of choices. 99.5% of the TLDs don’t belong to Verisign. IF, as you say, some of those choices are crap, that doesn’t mean the owner of 0.5% of the choices is responsible, let alone a monopoly.
If I buy a diamond, then I have no choice but to deal with The De Beers Group, which has long held an effective monopoly on the world’s entire diamond supply. But if I buy a domain, I can buy whatever I please; I have a huge number of choices, 99.5% of which allow me to do business with a Verisign competitor.
If you still disagree, that’s fine. But I would challenge you to find some definition of “monopoly” in a reputable dictionary or encyclopedia that covers a situation in which a company owns 0.5% of the supply … and in which 99.5% of the supply, owned by competitors, is cheap, abundant, and freely accessible.
Joseph,
I never called you an ignorant person because I know you aren’t (same goes for Konstantinos). Re-read what I wrote and notice how I clearly stated this is only in regards to this case, especially because the argument you two brought up against the points made by Patrick were very weak.
I have already made a large response on TheDomains to your comment there, so I don’t want to repeat myself again and again.
One thing that you don’t seem to understand is that the thousand new gTLDs, and the 0.5 percent figure you love to bring up are irrelevant here in this case because the market share is largely dominated by that 0.5 percent owner, and the thousand new gTLDs have a small market presence. I hate repeating myself, I really do, but I have to mention that .COM and .NET were around way before the new gTLDs, so they were not on equal grounds with people willingly choosing .COM over .DESIGN or .XYZ, no, these new extensions came way after the market was established, so obviously .COM would be the safe choice as it was a proven extension that didn’t need to battle against another 1000 gTLDs from day one like the new extensions are facing currently.
You know what, I know what you’re trying to do, you’re adhering to the textbook definition of monopoly, and I know about that definition and maybe aside from your example of diamond, I am not sure of its real world implication at all. It’s a literal definition, and I said that Wikipedia definition is irrelevant because as I explained, an actual real-world monopoly is a company that has the finance and power to simply kill off all the competition through whatever means possible, and this usually ends up benefiting no one except that one company.
This is what’s essentially happening here. Verisign obtaining .Web in an ICANN auction so that the money is not distributed amongst the ‘losers’, and the best general-purpose extension will not go into the hands of the competitor… Let me put it this way, if the other gTLDs were not around competing with .COM, and .WEB was offered to Verisign for $130-135 million, they would have gladly rejected such offer. So their purpose is to kill off the other smaller gTLDs out there, the ones that can’t compete against Verisign like .XYZ, simply so that .COM is remained the only dominant extension. You see, no one ends up winning, except ICANN and Verisign by warding off the competition (and maybe the .COM only investors).
Microsoft has been fined many times over ‘unethical approach’ or ‘monopolistic approach’ or whatever you call it, this is true for many other companies out there who have faced regulations due to similar actions, so once more, the plethora of choice being available is irrelevant if those choices are not given any room to breath in the first place, all thanks to the unethical practices carried out by the sole dominant player, and its partner in crime for allowing it to happen.
I know where such argument typically leads to, but ‘people and businesses prefer .COM’. They do so because it has around two decades of a head start, they know what they are getting, and there’s an actual scarcity of quality domains left in that extension, hence the new gTLD programme, a way to open new markets, and now those new markets are being forced into obsolescence because the old dog is not used to face fair competition, so why not use any tactic possible to just reduce the competitors into irrelevance if you’re allowed by the governing body behind this whole initiative?
In the end I’d like to make four quick points. First I have no idea why you brought up ad hominem fallacy into this as I never accused you (or Konstantinos) of having made such claims, I only said that even ‘if’ you or others deny it, Verisign saw gTLDs as competition to some extent. I am aware of Sold.Domains and the abundant of quality new gTLDs owned by Konstantinos. English is not my first language so perhaps my expression is incorrect somehow?
The second thing is the possible ‘why would you say Verisign is unethical?’ question, well simply because had it not been for them, the auction would have benefited the new gTLD operators one way or the other. Losers would take home a lot of money (perhaps to invest even more on pushing their gTLDs?), winner would position .WEB against .COM and that in turn would most probably lead to more awareness of the gTLD as a whole due to the marketing and the bickering against each other. Neither of those are happening now.
Third is about the statement ‘beauty is in the eye of the beholder’. No, .web is better than .ooo. There’s a reason at least one other participant went as high as $130 million.
Forth and last, this is not about me and my fear of my small portfolio of gTLDs. I don’t think the gTLDs will vanish and I am a firm believer that top-tier keywords will forever increase in value regardless of the extension. By that I mean the likes of Digital.Media, NewYork.City and so on.
@B4B,
First of all, let me say that my reason for replying here is because I DO respect your opinion. This might be misconstrued – as me hitting someone else over the head with my own viewpoint. But that’s not what I’m trying to do. You bring up issues worth considering, and I’m sure others who aren’t writing publicly might incline to your opinion. Granted, I do think that opinion is wrong. But it’s held by an intelligent person; so I’ll see if I can’t persuade him to re-assess things.
Let me go point by point:
“.COM and .NET were around way before the new gTLDs, so they were not on equal grounds”
Yes. Established brands always have a head start compared to newer brands. They also have bigger budgets than their smaller competitors. However, that doesn’t imply that preexisting companies have a monopoly. Small startups come along every day, offer something of value, market themselves well, and succeed.
We have no time machine. There’s no way to undo the past 30 years. Of course, the nTLDs do not begin “on equal grounds” with .COM or .NET. That’s the same situation faced by ALL new companies, ALL new brands in every industry imaginable. This condition isn’t monopoly; it’s simply an inevitable part of existence.
“there’s an actual scarcity of quality domains left in that extension, hence the new gTLD programme, a way to open new markets”
We can easily turn that argument upside down. If, indeed, there’s a scarcity of domains left in .COM, then surely .COM must be at a severe DISADVANTAGE compared to all the nTLDs. So instead of complaining about .COM’s unfair advantage, perhaps you should view this as a big advantage for all those nTLDs.
“the 0.5 percent figure [is] irrelevant here in this case because the market share is largely dominated by that 0.5 percent owner”
Here you’re referring to the large number of websites already built on .COM or .NET. But it’s difficult to see why this is unfair to nTLDs. First of all, it’s an unchangeable fact due to 31 years of history. It can’t be changed; so how is it cheating?
nTLDs would succeed or fail based on NEW registrations. New registrants aren’t obligated to register .COM simply because many .COM domains already exist. The nTLDs get plenty of exposure at registrars; and they have a perfectly fair chance of being selected by consumers. Those consumers aren’t being “dominated by that 0.5 percent owner”; they’re making free choices. If their preferences bypass 99.5% of the options in favor of .COM or .NET, well, that’s their prerogative.
Nothing whatsoever is unfair or monopolistic about their decision. They’re not forced to choose .COM due to lack of alternatives. People’s choices often reflect prevailing taste. Simple as that.
“You see, no one ends up winning, except ICANN and Verisign by warding off the competition (and maybe the .COM only investors).”
No one benefits? If someone buys a good .WEB domain for $20 or $200 or $2000 rather than buying a matching .COM domain for $20k or $200k or $2 million, then I think that person arguably benefits. Does that really benefit .COM-only investors? You say so, but that’s the guy who DIDN’T get the sale.
“now those new markets are being forced into obsolescence”
Why? I’m still going to buy a variety of nTLD domains and recommend them when
appropriate. A company called “[something] Media” will still find .MEDIA to be a compelling option. A tech startup might still choose .TECH. A club might still like .CLUB.
Much of what you’re objecting to is the idea that .WEB will siphon off market demand for other nTLDs. But even if Verisign hadn’t been the company to run .WEB, somebody else would have launched this TLD – Web.com or Google or Donuts. So this TLD would be a competing option for mainstream consumers, regardless.
Most of the nTLDs were destined to have a smaller footprint than .WEB. And .WEB was always going to happen. If .WEB crushes some of the smaller nTLDs, well, sorry, that’s been expected now for several years. This is due entirely to the merits of .WEB itself and not due to any supposed Verisign monopoly.
“an actual real-world monopoly is a company that has the finance and power to simply kill off all the competition through whatever means possible”
OK. But Verisign hasn’t killed off any of the competition. Some of the nTLDs are succeeding – even if some observers are disappointed by the pace of end-user adoption or aftermarket sales. nTLD success was bound to be small, since 1000+ nTLDs are all competing to get their own small sliver of each year’s new registrations.
I’m not aware of any nTLD ever having been killed off by Verisign. Most companies would love to eliminate all their competitors. So if Verisign really has this power, then why are there still 1000+ nTLDs available to buy at big retailers like GoDaddy?
“if the other gTLDs were not around competing with .COM, and .WEB was offered to Verisign for $130-135 million, they would have gladly rejected such offer”
Don’t know about that. .WEB is an opportunity for additional revenue – especially if, as you say, “there’s an actual scarcity of quality domains left in” .COM. Verisign might want .WEB in order to have something more to offer customers. That’s not evil. Even in the absence of other nTLDs, buying .WEB would make sense, since any company that operates .WEB can make money by offering it to consumers.
“So their purpose is to kill off the other smaller gTLDs out there, the ones that can’t compete against Verisign like .XYZ, simply so that .COM is remained the only dominant extension.”
But .COM won’t remain the only dominant extension. Dominant maybe. But not “the only”. After all, there will also be .WEB. Verisign assuredly wants to promote .COM. But I’m sure they’d also like to promote .NET, .CC, .TV, as well as .WEB.
Domainers are sometimes .COM purists. Yet that attitude makes no sense from Verisign’s perspective. They have a few other products to sell also. So, to some degree, Verisign MUST promote diversity of options.
“the plethora of choice being available is irrelevant if those choices are not given any room to breath in the first place, all thanks to the unethical practices carried out by the sole dominant player”
The nTLD have plenty of room to breathe. You complain that “.COM and .NET were around way before the new gTLDs”. Alright, those legacy gTLDs had a head start on the nTLDs. By the same token, these 1000+ nTLDs have been given a big advantage over .WEB – in the form of a 3-year head start. You can’t have it both ways. If a head start is unfair for .COM and .NET, then it’s also unfair for the other nTLDs to get a head start relative to .WEB.
And I’ll emphasize again that registrars like GoDaddy display MANY nTLD choices alongside .COM and .NET. All of these registrars have a natural financial incentive to encourage customers to buy nTLDs. Why? Because this enables registrars to sell more products … and often more EXPENSIVE products, since nTLDs can be quite pricey.
Verisign CAN’T stifle the nTLDs – not with all the registrars promoting them as they have been doing and continue to do. The nTLDs have plenty of room to breathe. Unfortunately for them, consumers continue to pick .COM and .NET. Verisign naturally wants this, but getting what they want isn’t unethical.
“‘why would you say Verisign is unethical?’ question, well simply because had it not been for them, the auction would have benefited the new gTLD operators one way or the other”
ICANN had 2 different auction mechanisms – one in which the high bid is divided amongst losing bidders and another in which the proceeds go instead to ICANN. I’m not an expert in ICANN policy; but if ICANN gives nTLD applicants a choice between these 2 options, then I fail to see why it’s UNETHICAL for the applicant to choose one over the other.
Suppose you’re bidding in an auction for some domain. Imagine how the bidding would go if all the other bidders knew that, by forcing you to bid higher, they’d be getting paid more themselves. Would you want to bid against a bunch of bidders who don’t actually want to win but who want to cynically force you to pay more and more and more … and who will then use that money to promote products that compete with yours?
I can definitely see why a sane person would want to avoid that scenario. Personally I’m not a fan of bidding against shills. It makes perfect sense that Verisign wanted to choose the other auction process – in which the only bids are placed by those who genuinely want to buy. That’s the same process most of us prefer. So why would Verisign be unethical for doing what we’d do ourselves?
Summary: .WEB was destined to compete with other nTLDs, no matter who runs .WEB. Consumers have 1000+ choices, and consumers will continue to choose whatever they want. Nobody is limiting their choices in any way.