Google Just Killed The Last Remaining Rationale for New gTLD Domains

Google just disrupted ICANN's new gTLD domains--it's called "innovation" [Update below] 

"... today we’re updating the algorithms that display URLs in the search results to better reflect the names of websites, using the real-world name of the site instead of the domain name, and the URL structure of the sites in a breadcrumbs-like format..."--Google, April 16, 2015 (emphasis added) 

The bad news for ICANN's new gTLDs just keeps piling up. While the domaining-domainer blogosphere was all lit up last week about Google's new search change now rolling out in mobile--the domain name extension (TLD) of the destination URL will not show in the search results--they missed the most important effect of the change: Google just killed the last remaining rationale for new gTLD domain names. Countless promoters, hustlers, speculators and "consultants," have invested their time and treasure in ICANN's new gTLDs based on the premise of the significance and importance of the "right of the dot" word for "branding" purposes! Oops! Never mind--Google is just serving up the website "title" without the TLD ("right of the dot word").

UPDATE: Many are still confused about "what just happened?"--it's called innovation, disintermediation--Google just disintermediated the new gTLDs. Impact on .COM, and ccTLDs? Minimal. They already have dominant "branding" and market share in their respective markets and are the "presumed TLD"--e.g., in the U.S. and global online market, it is a well-known fact that consumers and other users of the Internet will just type the name of the business or website and add .COM when doing direct navigation in a browser or application.

But you believed those new gTLD hucksters when they told you that Google would "ensure" the success of the new gTLDs? That new gTLDs would produce superior SEO results? FALSE. That first year new gTLD registrations would total 33 million or more? FALSE!

Let's add all the above to the other ways that new gTLD domain names have now reportedly failed, including, failing all the most important factors in choosing a domain name extension (top-level domain or "TLD"):

1. New gTLD domain names FAIL to work across the internet and "break stuff" (a/k/a the universal acceptance problem which ICANN has known about since at least 2003);

2. New gTLDs compromise the stability and security of the Internet (a corollary to the above).

3. New gTLD domain names lack pricing predictability--why invest time and money building a website on a new gTLD domain name only to be subject to the possibility of extortionate future price increases for annual registration renewals? Thanks to ICANN, new gTLD registry operators have sole discretion and control for new gTLD domain name pricing, including future increases for registration and renewal fees. A trusted, reliable registry operator with a history, practice, policy and/or requirement of pricing predictability for their TLDs, is a necessary requirement before most prudent registrants will even begin to invest their own hard-earned money in building a website on that TLD! But ICANN, its GNSO, and their "well-paid expert" never thought about that! And these are some of the same people, who, despite the pathetic registration numbers of new gTLDs, are still expecting everyone to start building major websites on these defective, untrustworthy new gTLDS (new generic top-level domains).

[ Note to ICANN: All the above is an example of what happens when you do not have a Registrant Stakeholder Group in ICANN. ]

Add all the above together and there is no doubt that the King was right--ICANN's new gTLD domain names, as a class, are a #FAIL. No wonder new gTLD Registry operators are getting increasingly desperate--giving domain names away for free or selling for only 49 cents each!--which only "trashes" the TLD further, attracting cybersquatters, cyber criminals, and other bad actors.

And to top it all off, Google just delivered the coup de grâce!

Caveat Emptor!


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A Few Things Worth Reading

Many say forget ICANN--it's hopelessly conflicted and inept--and new gTLD domain names? Only tech oxymorons need more 1980s technology in the Mobile Apps Age of 2015! So, what do you really need to know about modern life and culture today? Bob Lefsetz starts us off--

Lefsetz Letter » Never Say Never: "Coke is in a tailspin, McDonald’s is dying, a star football player retires after one year of play, Apple offers twenty five TV channels for $30-$40 and SXSW is now a tech, not a music, festival. Dude, what happened to my country?".... The world will be saved by people. Who think. And lead thereupon....." (read more at the link above)

GoDaddy And The Eternal Optimism Of Retail IPO Punters - GoDaddy Inc. (NYSE:GDDY) | Seeking Alpha: "... Despite reams of historical evidence that most IPOs are overpriced and represent poor medium-term investments, there is an almost-unending stream of retail punters who jump into the next 'hot' IPO at almost any price, often on the basis of name recognition alone, only to be sorely disappointed in the months that follow... If GDDY was an early-stage growth company with an undefined 'blue sky' growth opportunity, these kinds of multiples and day-one enthusiasm would at least be explainable. But in response to the listing of a two-decades old business with a history of operating losses, a mostly mature (or at least maturing) market, a large majority of the share count yet to enter the float, the specter of numerous secondary offerings from motivated PE sellers; and, of course, listed comps trading at a fraction of the valuation, GDDY at $26 is beyond expensive..."

Facebook hosting doesn't change things, the world already changed — Remains of the Day: "... The value of being a generalist as a reporter, someone who just shows up and asks questions and transcribes them into a summary article, is not that valuable. If you cover an industry, do you understand that industry? Take tech reporters as an example, many of them don't understand the underlying technology they write about. That may have sufficed in a bygone age, but it no longer does... Taking the time to become an expert in a domain still has value because it takes hard work, and that is also not a resource that is equally distributed in the world...."

11 Points A Somewhat Bearish Long Has Wrong About Google | Seeking Alpha: "Advertising is how it has chosen to monetize the information flow it facilitates. In my eyes, the worst thing Google could do is get away from its position where it is comfortably collecting a royalty on the creation and flow of information."

How Super Angel Chris Sacca Made Billions, Burned Bridges And Crafted The Best Seed Portfolio Ever: ".... Camp, who sold StumbleUpon to eBay for $75 million in 2007, had the idea to make an app so his friends could book a black car to take them around town. He first called it UberCab. Camp’s friend and early advisor, the author Tim Ferriss, remembers that the idea seemed “ridiculous” to many outside the Jam Pad circle. “People who had the opportunity to invest laughed it off as this one-percenter vanity service,” Ferriss says. “Chris was not one of them. He had faith very early on.” Kalanick became a mega-advisor of sorts to the fledgling startup, and Sacca wanted a piece. The pair cemented the startup’s angel $1.3 million financing at the Truckee house, with Sacca ponying up $300,000, a large check for an $8 million fund. “I went all-in,” he says. More than just money, he helped negotiate Kalanick’s compensation and secure the Uber name from Universal Music Group. Lowercase would add another $400,000 worth of Uber at the Series A round in early 2011, led by Benchmark Capital’s Bill Gurley ..." (read more at the link above)
(emphasis added)

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ICANN CEO Fadi Chehadé panders to DNA at ICANN 52 (video)

DNA member breakfast with Fadi Chehadé (2015-02-10): 

The Domain Name Association (thedna.org), Kurt Pritz, and Adrian Kinderis, welcomed ICANN President and CEO Mr. Fadi Chehadé (starts @3:05) to give a talk and answer member questions during the ICANN 52 meeting in Singapore,  February 10, 2015 (video above).

Topics covered: Universal Acceptance; Promotion of New gTLD domain names and ICANN "partnering" with thedna.org; IANA transition; predictability.

This video [full transcript here] gives good insight of a slice of the domain name industry as well as viewpoints of some of the stakeholders present in Singapore at ICANN 52, and a pulse on current issues as noted above--for example: Fadi Chehade made a point of saying that the CWG-Stewardship (IANA transition) is "busy not doing its job" (19:10) and later in the video had an interesting dialogue with Jay Daley, Chief Executive at .nz Registry Services, on the same topic beginning @34:00.

In the video, the ICANN CEO readily admits his ignorance of the domain name industry--no offense to Fadi, but why would ICANN choose anyone as CEO who does not understand the domain name industry? Domain Mondo suggests that the next CEO of ICANN be selected from among the many, very talented people leading ccTLD registry operators throughout the world.

Fadi is also clearly confused about ICANN's role vis-à-vis new gTLD registry operators--regulator or partner? In addition, he starts pandering (@31:00) in suggesting to his audience that ICANN will fund in ICANN's 2016FY Budget (pdf), DNA members' efforts to market or promote their new gTLD domain names [which would be violative of ICANN's Articles/Bylaws as well as California and US federal laws regarding non-profit corporations].

Fadi Chehade's leadership skills have been questioned by many in the past year--for example, his so-called NETmundial Initiative, has been an embarrassment to many within ICANN, particularly after wasting countless hours of his own, and  ICANN staff time, as well as hundreds of thousands of dollars in ICANN's own funds, on the effort.

For further background:

• Blast from the Past: ICANN, New gTLD Domain Names, Conflicts of Interest (video)
• ICANN, Kurt Pritz, Conflict of Interest, new gTLD domain names program
• Is It ICANN's Job To Market New gTLD Domain Names?

and

• ICANN, ICAN'T, IWON'T: uWHAT? How the internet is actually run • The Register
• ICANN anoints new internet kingpin • The Register
• ICANN creates 'UN Security Council for the internet', installs itself as a permanent member • The Register

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Why New gTLD Domain Names Fail To Work Across the Internet

Every Day More Problems Are Coming To Light With ICANN's New gTLDs (Generic Top-Level Domains):

ICANN was warned, repeatedly--even by one of their own "insiders" [see article excerpt below by Ram Mohan, Executive Vice President and CTO, Afilias, and also a member of the ICANN Board of Directors since 2008]--but ICANN arrogantly ignored the warnings and public interest issues such as the universal acceptance failure of new gTLD domains, as well as issues of Internet stability and security in its money-grab a/k/a the new gTLDs program--

More Problems Crop Up With Universal Acceptance of Top Level Domains (by Ram Mohan): "... George Santayana quote, "Those that cannot remember the past are doomed to repeat it" ...[is] an apt warning for what is currently happening — again — with the hundreds of new generic Top Level Domains (gTLDs) that are launching... and failing to work as expected on the Internet... [I]n the early 2000s, seven new gTLDs were launched: .AERO, .BIZ, .COOP, .INFO, .MUSEUM, .NAME and .PRO...  Any TLDs that were more than three characters long promptly ran into usability issues. I know this from first-hand experience with .INFO, for which my company, Afilias, is the registry operator... I spent a good part of my time, in the first five years after .INFO launched, working with vendors to get their systems to accept .INFO email addresses and .INFO domain names as valid. Now, 13 years later, it's still possible to find systems that reject .INFO addresses. From that experience, I developed my three rules of TLD acceptance.

"Mohan's Three Rules of TLD Acceptance:

1. An old TLD [e.g., .COM, .NET, .ORG] will be accepted more often than a new TLD.
2. An ASCII-only TLD will be accepted more than an IDN TLD.
3. A two or three letter TLD will be accepted more often than a longer ccTLD or gTLD.

"Web browsers... have varying rules for how to deal with a website address in a top-level domain that the browser does not recognize...  many applications and apps that use the Internet still refer to a locally held (and quickly outdated) list of "valid" TLD names, rather than using the DNS to determine domain name validity... the issue of universal acceptance never really got solved, the topic takes on heightened importance due to the creation of hundreds of new top-level domains on the Internet... in the current crop of new TLDs, even three character strings get caught in the mix. What was previously considered primarily an infrastructure-level issue is now poised to become a major user-level issue, with negative impact on both the regular Internet user and inside corporations... " (emphasis added, read more here)

But I guess the money ICANN was collecting from new gTLD applicants was too hard to resist--particularly when you look and see who benefits from ICANN's exploding revenue--the exorbitant compensation, benefits, and "expense reimbursements" for ICANN directors, officers and staff, expanding offices and overhead, excessive payments to ICANN-favored third parties etc., for contractor "services."

Question: "Is it a deceptive, unfair or fraudulent business practice to "sell" or "offer for registration" domain names that do not work across the Internet?"

UPDATE: see ICANN 52, Universal Acceptance, New gTLD Domain Names "break stuff"

see also: ICANN, New gTLD Domain Names, Universal Acceptance Another #FAIL - 14 October 2014

Caveat Emptor!

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Why Dilute Your Brand With A New gTLD Domain Name?

If you do not know what "brand dilution" is, start here.

Year 2011: Advertisers rally behind trademarks to oppose ICANN – but is it too late? - Blog - World Trademark Review: "... the ANA, which represents more than 10,000 brands that spend over $250 billion in marketing each year. The association’s chief executive, Bob Liodice, recently wrote to ICANN to say: “By introducing confusion into the marketplace and increasing the likelihood of cybersquatting and other malicious conduct, the ICANN top-level domain programme diminishes the power of trademarks to serve as strong, accurate and reliable symbols of source and quality in the marketplace." In a statement that will resonate with the trademark counsel who have followed this policy for years, Liodice added: "Brand confusion, dilution and other abuses also pose risks of cyber predator harms, consumer privacy violations, identity theft and cyber security breaches."..." (emphasis added)

YEAR 2014: Rush for ‘luxury’ domain names continues | New York Post is the headline in the puff piece -- here's the reality:

Total Domain Names registered under new gTLD .LUXURY -- (data source: RegistrarStats.com, Oct 25, 2014) --

That's no "rush" in my view, that's "pathetic." According to safenames.net, .LUXURY has been in "general availability" since April 21, 2014.

All the new gTLD "true believers" who believed the hype and are now stuck within the developing disaster known as ICANN's new gTLD domain names program, forgot (or were completely ignorant of) the fact that brands do not want brand dilution. And yet, most new gTLD domain names are the ultimate in brand dilution! (See quote near the beginning above.) The implicit brand dilution inherent in most of the new gTLDs was part of the rationale used by the proponents for the whole program, and was also a reason why most trademark holders and brands were so opposed to it. With most of the new gTLDs, the intent was to make the TLD extension itself (that which appears to the right of the dot) part of the "branding." For example, new gTLD proponents argued that luxury goods retailers would want a .LUXURY domain name extension. But is that really true?

Luxury by another (domain) name (source: theage.com.au): "... But will brands that have become a byword for prestige, quality and exclusivity – the likes of Rolls-Royce, Rolex and Tiffany & Co – jump at the chance to associate themselves with the L-word? Several spoken to by Executive Style expressed reservations. “Why would we brand ourselves in such a way?” one asked. “Our product speaks for itself.” Hugo Boss Australia spokeswoman Chauntel Scarr agreed. “I would say that Hugo Boss would not feel the necessity to align to a luxury domain as we have spent years building our brand into the luxury realm,” she says. “To then brand it as luxury in a domain name seems unnecessary and forced. If it can be bought then it is usually not as it seems.”..."

So here we are in late 2014, and the market has spoken--among all (current and future) domain name TLD extensions, .COM is the best and most "trusted brand" for commercial enterprises, and .COM does not dilute the brand name to the left of the dot. This will continue to be true for the foreseeable future. Anyone who tries to tell you that a $488.88 annual registration fee for a new gTLD domain name is necessary to enhance your brand, is trying to separate you from your money by selling you, in my opinion, a mostly worthless domain name that may, in fact, be damaging to your brand name.

This is just one more reason, among many more, why most new gTLD domains are a #FAIL.

If you have already fallen for the new gTLD hype, there is still time to change your domain name extension to the "trusted brand"--

Brand Equity Dilution | MIT Sloan Management Review: "It is interesting to note that there is a silver lining to unsuccessful “market failure” brand extensions, those that fail because they are inadequately distributed or do not achieve sufficient awareness among consumers. Because consumers might not have even heard of the extension product or service, the parent brand is more likely to survive relatively unscathed."

Caveat Emptor!


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Fred Wilson, Investing, Crowded Trades, new gTLD Domain Names

As I've said before, only morons think increasing supply increases demand [or prices] --

A Dozen Things I’ve Learned from Fred Wilson | 25iq: "... “Don’t do the obvious thing.” As Will Rogers put even more simply: “Always drink upstream from the herd.” Trying to find positive optionality in areas where others are intensely focused is what investors call a crowded trade (i.e., too many people trying to do the same thing). You can’t do better than a mob if you are part of the mob."..."

So where is the mob today? New gTLD domain names? Are you part of the mob trying to find positive optionality in a crowded trade?

Caveat Emptor -- be mindful of the data -- and remember that drops in new gTLD domain names do not begin until 2015 (first renewals or drops).


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All the things ICANN failed to think about before launching new gTLDs

When ICANN decided to do internet domain name public policy based primarily on the competing private, profit-making motives of  registry applicants who could "pay to play" at the rate of $185,000 per new gTLD, with limited input from mostly self-selected so-called multi-stakeholders who collectively form the "junket culture" within ICANN, or as some call it, the "gravy train," as ICANN has done with its new gTLDs domain names program, and in the process completely disregard the public interest -- ignoring objections and warnings from governments, businesses, trademark holders, and others -- ICANN should at least have thought through all of the ramifications, pitfalls, conflicts, and other problems now resulting. Instead, thanks to ICANN, we now have a multi-million-dollar boondoggle and corruption of the internet domain name space. Here's just one example, of many, of the disaster ICANN has created as a result of its new gTLDs process --

https://www.icann.org/en/system/files/correspondence/roussos-to-crocker-et-al-01jul14-en.pdf (pdf)

240 pages all about just one new gTLD! Multiply that times 1300+ (the total number of new gTLDs to be launched in the "first phase") and you begin to get an idea of the magnitude of chaos and confusion ICANN has irresponsibly unleashed on the global Internet community. There was a better way and there is no excuse nor justification for what ICANN has done. ICANN, its Board of Directors, staff, and all others responsible, should be held accountable. But ICANN is "a monopolistic, hardly accountable private organisation that exercises public authority and power," with no membership and controlled by an "unelected, self-interested, self-legitimised corporate board, answerable, when it really comes down to it, only to itself." The remedy therefore is to replace ICANN.


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ICANN Process for New gTLDs Dysfunctional -- from the beginning

"When a decision is taken about a possible new top-level domain, ICANN's job is to work out, in a transparent and accountable manner, whether it is really in the best interest of the world as a whole, not just of those launching the new domain." -- Tim Berners-Lee

Jean Guillon writing in CircleID asks: "What if France Had Applied for a .WINE New gTLD? ....Well… the situation would be the exact same — the applicant would be in front of three other .WINE applicants with this exact same question: how do I win the auction?... "Standard applications", "Community applications" and "Geographic applications" were created by ICANN to offer a range of procedures for applicants to decide whether "they" considered if their application was sensitive or not. ICANN has no "conseil des sages" or CFT procedure upfront to do a first check up in the new gTLD application process. So what now?"

The whole ICANN process for new gTLDs was dysfunctional from the beginning. There should have been no fees such as the $185,000 per application fee, and no auctions. There should have been a process to receive nominations for new generic top-level domains. Anyone could submit a nomination for new gTLD name extension: .web, .app, etc., with the nominating form indicating the "public interest" rationale and need for the new gTLD extension. A nominating committee to review and process the nominations would be composed of members of the global internet community, including but not limited to, domain name registrants, commercial, civil society, and government representatives (with access to experts in naming protocols, marketing, trademarks, economics, technical and other matters). The nominating committee would specifically exclude from membership registry representatives and anyone else who intended to apply to become a registry of any new gTLD or provide services to current or new gTLDs registry operators. The nominating committee would evaluate the nominations, to determine which ones ranked highest in terms of both rationale and need, in the public interest, perhaps even conducting polls for general world opinion and consensus as to preferences among the nominated new gTLDs. From that process, the nominating committee would determine and publish ranked lists of proposed new gTLDs, which would be published to the global multistakeholder community for comment, for a period of not less than thirty days. Once the comment period closed, the ranked lists and comments would be submitted to the ICANN Board (or its designee) for final determination of which new gTLDs would be added to the global domain name system.

Then, and only then, the process of soliciting and selecting the registry operator for each new gTLD would begin. That process would end with the selected registry operator executing its contract with ICANN -- ICANN acting on behalf of the global internet community. The registry operator contracts would include terms requiring operation of each new gTLD registry in the public interest for a term of years, at the lowest possible cost in annual domain name registration fees, all of which would be strictly regulated by ICANN. Financial soundness of each registry operator applicant would be one, but only one, of many criteria by which the ICANN Board or its designee would make the final registry operator selections. No fees would be paid to ICANN by the selected or applicant registry operators. ICANN would receive only the fee paid upon registration/transfer of each domain name -- ICANN, the Internet Corporation for Assigned Names and Numbers, charges a mandatory yearly fee of $0.18 for each year of domain registration per domain name. (Registry operators would be required to pay annual assessments for operation of the internet root zone and other technical IANA functions, directly to IANA, a separate entity.)

Every current and new gTLD should be considered to be the "property" of the global internet community, regulated by ICANN, and operated by each registry, in the "public interest." ICANN was never originally intended to be an ATM or "cash machine" -- "put in your $185,000 and we will issue you your new gTLD which you can do with pretty much as you like" nor an issuer of new gTLDs to the highest bidder -- Glossary | ICANN New gTLDs: "Auction -- A method for allocating property or goods to the highest bidder." Nor were generic top-level domains ever originally intended to be licenses to make profits at the expense of the public interest -- damaging trademarks, businesses, and others in the process.

But somewhere along the line, ICANN stopped listening to people like Esther Dyson and Tim Berners-Lee, and decided to sell out the public interest for private gain and profit. In the process, ICANN has irreparably damaged the internet and its domain name system for which it was supposed to be a protector and steward.

John Poole
Domain Mondo
July 4, 2014


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Clueless ICANN, Little Demand for New Domain Names, Rivers of Red Ink

Clueless ICANN: Only morons think increasing supply increases demand. GoDaddy, the most dominant (37.17% Market Share) domain name registrar with 57+ million domains registered, has not generated a profit since 2009 and in the last two years has reported combined losses of $480 million according to  CNN.com*. [Sounds like a good time to do an IPO in the stock market!] 

So what does ICANN do? Massively increase supply and flood the market with more than 1000 new domain name extensions, up from just 22 domain extensions (.com, .net, .org et al). Add the fact that over 75% of all registered domain names are not used for "active websites" -- they either do not resolve at all or are "parked" or similar -- and what you have is massive oversupply and rivers of red ink.

And here's another depressing FACT for ICANN and all the new gTLD believers: increasing numbers of internet users do NOT equate to, or correlate with, an increase in domain name registrations. Domain name registrations equate to (or correlate with) high gross national income per capita, absence of government censorship, fast and cheap internet, and high numbers of web content creators. Unfortunately, these same factors therefore exclude most people in the world as potential domain name registrants--including those whose only access to the internet is via a cheap phone or phablet (i.e., most of Asia, Africa, and Latin America). This is why almost 4 out of every 5 domain name registrations in the world (gTLDs + ccTLDs) are in Europe or North America. And unfortunately, Europe and North America are now mature, slow growth markets for domain name registrations. In the US alone, there was (long before the first new gTLD launched) already one domain name registered for every 3 internet users!  And while mobile internet use is growing, it looks increasingly like a mobile app world -- not a mobile website world!

And now, as if the money-losing domain name industry didn't have enough to worry about, the technology giant Google decides to enter the domain name industry as registrar and registry, competing with GoDaddy et al. No wonder the domain registrar stocks are dropping! Pretty soon Google will be giving away domain names (I know, they are late to that game -- .berlin or .xyz anyone?) to get businesses to buy (or "subscribe" to) Google services, Google advertising, etc. Adding insult to injury, Google probably doesn't even expect to make a profit off their registry/registrar businesses--they just want to make it convenient and easy for content creators and businesses to use Google platforms and services--so Google can likewise increase Google advertising revenues. At this point, Google is a one-stop shop--advertising network, search engine, cloud engine, content delivery network, platforms (YouTube, Blogger, Google Sites, Google Cloud, Google Play, etc.) and endless other Google services (e.g., Google maps, Google voice, etc.). My guess is Amazon and Microsoft (and maybe Apple, Yahoo, or Facebook) are not far behind. Here's part of an email I received from Amazon Web Services today:

"AWS [Amazon Web Services] is focused on continually lowering your overall IT costs.  We recently announced our 42nd price drop, making the AWS Total Cost of Ownership (TCO) even better when compared to on-premises or colocation hosting environments.  You can save a significant amount by running both your fixed and variable workloads on AWS."

Say you have a dotCom domain name -- the one domain name extension that is recognized and used everywhere in the world. Unlike new gTLDs, every browser will resolve a dot Com domain name to your website -- try that on an Apple device with some of the new gTLDs! And which domain name extension is more cost competitive in annual registration fees -- your recognized and trusted dot Com domain name or a new, unrecognized, unreachable new gTLD? In almost every case, new gTLDs cost more in renewal registration fees, sometimes much more.

All of this is why the new gTLDs will mostly fail. I personally know a manager for a US company with hundreds of domain name registrations (most under WHOIS privacy) -- only one new gTLD -- a 5 letter .xyz that matches a .com, .net, and .org in the portfolio (yes, $-0- acquisition cost via Network Solutions). That is not unusual -- look at the data, all of the new gTLD domain names (after you subtract the freebie give aways, the cybersquatters, and domain name speculators) have either stalled or failed out of the gate. 

You don't hear them talking about any of this at ICANN 50. Clueless.

It's pretty easy to see where all of this is going. Most global companies (and most companies with global aspirations) are going to lock onto their "dot Com" and forget about acquiring any other domain names. Part of the money saved will be spent on trademark registrations and defense, including selective UDRP and URS actions.

Look, I'm all for innovation, but saying something is "innovation" doesn't make it so. You remember what Steve Jobs said about innovation don't you? "Innovation is saying 'no' to 1,000 things." Too bad ICANN and all the dumb money chasing new gTLD domain names never learned that.

John Poole
Domain Mondo
June 24, 2014

*Update: erroneous data from CNN deleted/corrected 6/26/2014

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New gTLD domain names, exorbitant prices, ICANN Incompetence

From the ICANN "you can't make this stuff up" department --

Takeaways From Internet Corporation for Assigned Names and Numbers (ICANN) 49 in Singapore | The National Law Review: "ICANN used the term "technical glitch" to excuse its delays in publication of TLD startup data cutting into the 30 days' notice that brand owners are supposed to receive prior to each new gTLD launch. In addition, the ICANN Contractual Compliance Department expressed an inability to take any remedial action against new gTLD applicants advertising exorbitant domain name prices to vitiate sunrise protections or pre-registration programs that sidestep fulsome trademark claims notices. Such practices are best evidenced by Vox Populi Registry Inc., an applicant for the .SUCKS gTLD, which plans to charge $25,000 for each premium sunrise registration."


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Wharton School Marketing Professor says ICANN's New gTLD domain names are an "utter waste of time"

If you want to operate a domain name "cemetery" -- you know, a website that doesn't get much internet traffic -- one of ICANN's hundreds of new vanity gTLD domain names may be for you! The vast majority of ICANN's new gTLD domain names will be an "utter waste of time" says University of Pennsylvania Wharton School marketing professor Peter Fader, co-director of the Wharton Customer Analytics Initiative (source infra).

Domain Name Land Rush: More Room for Companies, Competition and Scam Artists » Knowledge@Wharton: “...“The suffix itself is not an outdated technology, but as more and more people go to mobile devices, the way of interacting with the Internet is moving [away] from URLs.”...Wharton marketing professor Stephen J. Hoch is likewise unconvinced by the potential of gTLDs as an enormous advance... “Moreover, with search and automatic filling in of email addresses, it is not clear that the brands, at least big brands, would be affected either. People are not really thinking about anything that comes after the period.” “I think we have all learned by now that you have to be creative with what’s to the left of the dot,” says Fader. “You can’t hide behind the right side of the dot as a lack of creativity to differentiate your brand... Fader acknowledges that given all the different ways markets and sectors work, “there must be some legitimate uses out there, but it will be a teeny, tiny fraction of suffixes to which that applies. For the vast majority, it will be an utter waste of time.”

An utter waste of time, and an unbelievable waste of money! (see: ICANN, new gTLD domain names, and the Law of Bad Ideas)


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Is It ICANN's Job To Market New gTLD Domain Names?

Has ICANN been conflicted, co-opted, and corrupted by its new gTLD domain names program? Is ICANN now, in effect, a joint venture partner with new gTLD registries and registrars -- "Pay us (ICANN) $185,000 up front (plus renewal fees) and we (ICANN) will help YOU market your new gTLD domain names that WE have authorized YOU to register (sell) for a PROFIT?"

"conflict" - an incompatibility between two or more purposes, principles, or interests
"co-opt" - divert to or use in a role different from the usual or original one
"corrupt" - change or debase by making alterations

"Marketing" - "Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling that product or service." (source: Wikipedia)

"New gTLDs" - New generic Top-Level Domain Names authorized by ICANN to be offered for registration [sold] by Registries and Registrars.

Recently a domainer blogger asked: Who is responsible for new gTLD marketing? The answers from members of the domain name industry (registrars, registries, affiliated companies) included:

"... ICANN, the registries... registrars..."

"... I think the “we” here is primarily Registries, Registrars, the DNA [Domain Name Association] and ICANN..."

"Now that new gTLDs are here, I’ve heard people suggest that ICANN, the registries, and the registrars should be responsible for marketing them. This is a correct suggestion."

Really? Is marketing new gTLD domain names what ICANN, the Internet Corporation for Assigned Names and Numbers, "a nonprofit corporation that coordinates the Internet's global domain name system" [Wikipedia] is supposed to be doing? Is marketing new gTLD domain names within ICANN's purpose or mission as expressed within its articles of incorporation, bylaws, affirmation of commitments, or applicable California or federal (US) law?

Not only is "marketing domain names" NOT within ICANN's purpose and mission, but to do such "marketing" for for-profit companies appears to be a violation of the ICANN corporate instruments and applicable state and federal laws, for example:

Exemption Requirements - 501(c)(3) Organizations: "... The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction. Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct...."

Some might argue that ICANN has already violated one or more of the legal provisions cited above, but at a minimum, the world of ICANN has become so dysfunctional that some ICANN insiders -- registries, registrars, and other for-profit domain industry members -- actually believe ICANN is supposed  to do the "marketing" of the new gTLD domain names for them-- for the registries and registrars which were authorized by ICANN to offer said new gTLD domain names for registration!

Somehow, in the world of ICANN, the interests of the regulated (registries and registrars) and the regulator (ICANN) have become one, at least in the minds of many. Is this what happens when a non-profit corporation, lacking proper oversight, transparency and accountability, becomes dominated by insiders and the special interests of the commercial, for-profit domain name industry it is supposed to be regulating and governing; when ICANN's Chief Strategy Officer (and architect of the new gTLDs program) resigns due to a conflict of interest (the particulars of which were never disclosed to the global multistakeholder community), and then becomes the Executive Director of the Domain Name Association, a lobbying group of that same for-profit domain name industry?

Is this why that same Domain Name Association has now jumped into the middle of ICANN's new gTLD auction process, to grab the money for itself and "marketing?"-- Domain Name Association: "The proceeds will be distributed as follows: First: Fees for the auction provider will be paid. Second: Disbursements, if any, will be made to auction participants. Third: Optional membership fees in the DNA will be paid. All remaining proceeds will go to the DNA. The auction winner will determine how those proceeds are allocated between funding TLD marketing and awareness campaigns and funding other DNA industry development efforts."

Sounds like ICANN should just shut down and turn everything over to DNA -- the Domain Name Association! Or more likely, ICANN will just contract with the DNA to perform all of ICANN's functions! 

I think it is now clear why the public interest was so disregarded in ICANN's new gTLDs program--

“'The public at large, consumers and businesses, would be better served by no expansion or less expansion' of domains" said Jon Leibowitz, former chairman of the US Federal Trade Commission in the New York Times."

"I really can’t see a legitimate upside where new benefits [of the new gTLDS] outweigh costs, and everyone I mention this to feels the same way. People just shake their heads. It’s all about the money. They [ICANN] are creating these extensions because they can." University of Pennsylvania Wharton School marketing professor Peter Fader, co-director of the Wharton Customer Analytics Initiative. (source: Knowledge@Wharton, emphasis added)

Esther Dyson On New Top-Level Domains: “There Are Huge Trademark Issues” | TechCrunch: "... we are not running out of domains. This is a “way for registries and registrars to make money,” says Dyson. She also points out that “there are huge trademark issues. I just think it is offensive... It will create a lot of litigation.”" [see: Esther Dyson Told ICANN new gTLDs were a mistake in 2011 (video)]

Tim Berners-Lee: "....when a decision is taken about a possible new top-level domain, ICANN's job is to work out, in a transparent and accountable manner, whether it is really in the best interest of the world as a whole, not just of those launching the new domain. It also means that ICANN's use of the funds should be spent in a beneficent way...."

Memo to ICANN: money spent on "marketing new gTLDs" is NOT a "beneficent way."

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ICANN, Kurt Pritz, Conflict of Interest, new gTLD domain names program

Kurt Pritz, who resigned due to a conflict of interest, http://t.co/LpLJBjSEF7 was paid $502K by #ICANN for 4.5 months of "work"? #shocking
— George Kirikos (@GeorgeKirikos) May 16, 2014

That Kurt Pritz compensation of $502K for 4.5 months exceeds the $421K he made in the *12* months ending on June 30, 2012!
— George Kirikos (@GeorgeKirikos) May 16, 2014

So, #ICANN not only kept secret the exact nature of the Kurt Pritz conflict of interest, they gave him a lot of money when he "resigned."
— George Kirikos (@GeorgeKirikos) May 16, 2014

The message #ICANN sends is that you can be conflicted with no serious repercussions. You will actually get a big windfall in extra money.
— George Kirikos (@GeorgeKirikos) May 16, 2014

15 November 2012

To the ICANN Community,

Regretfully, I have accepted the resignation of Kurt Pritz, who has served most recently as ICANN’s Chief Strategy Officer.

Kurt has submitted his resignation because of a recently identified conflict of interest, which he immediately communicated to ICANN. After analyzing this conflict of interest, we decided that a change in Kurt’s role within ICANN would be appropriate. Kurt decided to resign his position and role as an officer of ICANN, to best serve the interests of the organization. Kurt will be engaged as a subject matter expert where needed, but will have no access to new gTLD applicant information nor will he play a role in the new gTLD program.

I have already put in place a plan for the reassignment of all of Kurt’s management responsibilities.

I would like to thank Kurt for his many years of service and commitment to ICANN and our community.

Respectfully,
Fadi

source: http://www.icann.org/en/news/announcements/announcement-15nov12-en.htm

And who is Kurt Pritz?

Former ICANN Executive Kurt Pritz Joins Domain Name Association as Executive Director: "Former ICANN executive Kurt Pritz has assumed the role of interim Executive Director for the Domain Name Association, a newly formed non-profit business association that represents the interests of the domain name industry. Kurt will be working with and representing DNA during the ICANN-48 meetings in Buenos Aires. He played a key role in the growth of ICANN and is best known as the architect of ICANN's new gTLD program...."

This guy was the architect of ICANN's new gTLD domain names program! The same program ICANN adopted over the vociferous objections of governments, business groups, trademark holders, and the public interest. The same unwanted and unneeded expansion of generic top-level domains that are now polluting the domain name ecosystem that ICANN was supposed to protect and be a steward of, and are causing all of kinds of headaches, expansion of staff, multiplicity, duplicity, and explosion of expenses at ICANN. One big mess always leads to others. Some call this the Law of Bad Ideas.

What exactly was the conflict of interest that caused ICANN's Chief Strategy Officer Kurt Pritz to have to resign? And why did ICANN compensate a former officer AFTER his conflict of interest was known to some insiders (and apparently was incompatible to his duties and obligations to ICANN) at apparently an even higher rate than he was making as a full-time Chief Strategy Officer of ICANN? ICANN sure knows how to "take care" of insiders -- particularly those who resign after admitting to having a "conflict of interest" apparently incompatible with their positions and duties. But I guess this is what happens when an organization like ICANN has no members, no transparency, no accountability, and a Board of Directors with their own conflicts of interest!

No one is talking -- not even bloggers who claim to cover the domain name industry:

Pritz’s conflict of interest was with ARI | DomainIncite - Domain Name News & Opinion: "I’ve decided not to report the full details, other than to say the conflict relates to ARI Registry Services, a major provider of back-end registry services for new gTLD applicants."

Domain Name Association: "...Kurt Pritz has assumed the role as interim Executive Director for the newly created organization... "Kurt Pritz is the right man for the job of making the Domain Name Industry’s first-ever trade association a must-join organization," said Adrian Kinderis, chair of the interim board and CEO of ARI Registry Services. "He has been a long time industry participant through his senior position at ICANN ..." 

ICANN needs to "come clean" and answer the questions raised in this post which have also been raised by others -- THIS is what transparency and accountability to a global multistakeholder community is all about. And if ICANN is not up to the task (which appears to be the case), ICANN needs to get out of the way, and go away! And take your stinking new gTLDs program with you!


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ICANN, new gTLD domain names, and the Law of Bad Ideas

My next post requires this background on ICANN, ICANN's new gTLDs (generic top level domain names), and the Law of Bad Ideas. Never heard of the Law of Bad Ideas? It's all explained below.

The Law of Bad Ideas [as explained by Domain Mondo in the context of ICANN and its new gTLDs program within brackets below]:

"Bad ideas don't go away until they have been tried and failed multiple times, and generally not even then. [After ICANN repeatedly expands the gTLD domains (.mobi et al), none of them really take off, so ICANN decides to flood the market with hundreds of unwanted, unneeded new gTLD domains so cybercriminals, cybersquatters, and trademark infringers can have a field day, and ICANN, its insiders and opportunistic contractors can profit from the scheme.]

"Corollary One: Left alone, bad ideas get worse over time. [It is happening right before our eyes -- and just keep watching this new gTLDs program and ALL of its unintended consequences--including things ICANN didn't even consider or even think about before imposing its disaster on the global multistakeholder community.]

"Corollary Two: The overwhelming desire to implement bad ideas leads to compromises guaranteed to make things worse. [price gouging for new gTLD domain name renewals, and remember the multistakeholder proposal to protect trademarks that was vetoed by ICANN insiders?]

"Corollary Three: Those in positions of political power not only have the worst ideas, they also have the means to see those ideas are implemented. [Think of ICANN's own Rod Beckstrom, Kurt Pritz,  Fadi Chehade a/k/a Mr. Charade, Steven Crocker a/k/a Dr. Crock, et al]

"Corollary Four: The worse the idea, the more likely it is to be embraced by academia and political opportunists. [And economic opportunists]

"Corollary Five: No politically acceptable idea is so bad it cannot be made worse." [Don't know about you, but I can hardly wait for ICANN's next round of new gTLDs!]

The reason this is all so bad is that institutional effort justification and confirmation bias have now taken hold of ICANN -- ICANN cannot dare admit it made a BIG mistake with its new gTLDs program -- ICANN will continue compounding its mistake. If you are in the domain name industry and have not yet formulated your own disaster recovery plan to deal with ICANN's disastrous new gTLDs program, you better get one now, the water is rising fast, and you haven't seen anything yet!

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Trademark counsel slam ICANN's new gTLD domain names

ICANN's new gTLD domain names -- "lots of cybersquatting, but not a lot of innovation" --

As reported yesterday in expVC.com, this week is the annual meeting of INTA (The International Trademark Association) in Hong Kong, and trademark counsel are ganging up on ICANN's new gTLD domain names --

Verizon counsel slams gTLD opportunists - Blog - World Trademark Review:“We have seen lots of cybersquatting but not a lot of innovation, which was one of the arguments for the new gTLDs programme”. So stated Sarah B Deutsch, vice president and associate general counsel for Verizon Communications, speaking at the INTA Annual Meeting earlier today, where she added: “We are seeing a steady flow of cybersquatters jumping in as new gTLDs roll out”. She therefore called on trademark counsel to record instances of abuse to inform later reviews of the gTLD programme... she urged brand owners to collect data on what has been registered as this will inform future discussions on trademark protections (an argument backed up by Covington & Burling’s Kristina Rosette, who noted: “There will be various upcoming reviews of the gTLD progamme and it is important that trademark owners not only participate, but have data on Sunrise participation, registrations and how much they have had to spend....” (read more at the World Trademark Review)

ICANN was warned about all of this, but apparently greed won out over common sense, the public interest, and trademarks. Unfortunately, another consequence of ICANN's misguided and ill-advised new gTLDs program is that this kind of blowback will also affect honest domain name investors and registrants, even in the legacy domains (.com, .net, and .org), with even more UDRP decisions which are abusive of registrants' rights.


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