2015-02-17

ICANN New gTLD Private Auctions, 2015 Patsy of the Year Nominees?

“If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.” ― Warren Buffett
ICANN designed a grand casino game for its new gTLDs (new generic top-level domains) program, whereby the gamblers a/k/a new gTLD applicants can mutually agree on a private auction, and, as in other casino games, it pays to know the rules, and know who the "patsy" is, in each round.

The new gTLD private auctions have become a way for new gTLD applicants to make money (or recoup some of their losses) by participating in the private auction, bid up the price, and then lose in the end to the patsy a/k/a winner of the auction who must pay the second-highest bid which is then divided evenly among the other gamblers a/k/a participating new gTLD applicants. Of course to be admitted to the game, you have to ante up $185,000 (new gTLD application fee to ICANN) and then stay in the "game" until the patsy gets stuck with the winning bid. Note that under ICANN rules, this is all allowed to be done in secret, no one even knows for sure, at this point, how much .BLOG actually sold for, although there has been speculation it was as high as $30 million (see below).

Fast forward to the private auction of new gTLD .BLOG:

TheDomains: Minds + Machines Pockets $3.5+ Million By Losing .Blog & .Store...

Got it? You WIN by LOSING! This is definitely a casino game loved by domain-name-industry- captured-ICANN insiders! So who were all the "Losers" (i.e., the real Winners) in the .BLOG auction? Besides Minds + Machines (see link above), included were industry giants Google, Afilias, Donuts, and reportedly four others. Clue #1: when you outbid companies like Google AND Afilias AND Donuts AND Minds + Machines, for a new gTLD, you are probably the patsy for that round.

Of course, while many observers were privately snickering at what reportedly happened in the .BLOG auction, predictably, some pundits in the domain name industry got the .BLOG story all wrong, here are but two examples:

1. ICANN's Auction Piggy Bank Just Got Twice As Big - actually, no, neither ICANN nor the global multistakeholder community received anything from the private auction of .BLOG and that is the way ICANN designed it--private auctions of new gTLDs were allowed in order to enhance private profit-making, thereby dispensing with any notion of the global public interest! Good Ol' ICANN--LOL!

2. "If anyone thinks that the new gTLD program is failing, I think they should have a look at ...[citing story that $30 million was reportedly paid by the private auction "winner" for .BLOG]... - actually, the new gTLDs program IS failing, badly, and the .BLOG reported sale just means one poor unfortunate new gTLD registry operator is now starting out $30 million in the hole.

Unsurprisingly, the reported "winner" of the .BLOG auction, when contacted, "didn't want to talk." 

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