| NamePros Regular Join Date: Sep 2006
Posts: 684
NP$: 250.00 ( Donate)
| Obviously, Registrypro need to target certified professionals, but they have been doing this unsuccessfully since June 2004. The question is how to do this more effectively as a small fish in a big sea.
Registrypro receives about $325,000 per year in fees. I'm guessing Registrypro don't get much change from their reg fees after paying Catherine Sigmar, then they have to pay another 14 staff, office costs, and IT infrastructure costs. So presumably, Hostway is dropping $1m+ a year keeping the show on the road. That is probably a price worth paying in the short to medium term to control a gTLD, allbeit one in a strait jacket.
Catherine Sigmar was recruited in April 2007 and the ICANN contract amendment minutes referred to Registrypro "reaching out" in May 2007 so I'm guessing amending the ICANN contract was the key task given to her when she joined. That would tie in with her legal and consulting background.
I don't know what plans Registrypro have for the 14 July relaunch but if all they have up their sleeve is press releases and a reliance on more qualifying professionals being eligible to register .pro's saving the day, they will fail miserably. Registrypro will end up getting sold to a more commercially aware operator or Catherine Sigmar will get fired.
99% of .pro registrants are not using the extension as it was intended, by that I mean developed professional service websites run by government approved qualified professionals. Virtually every .pro is held by alternative extension domainers or domainer developers. Small holders are often not professionally qualified in the Registrypro sense but larger holders tend to be professionally qualified accountants or lawyers.
The alternative extension domainer is different to a standard domainer. They don't expect to make any PPC, they are aiming for capital appreciation, they will hold for the medium to long term. The domainer developer differs from a standard developer in that a developer would develop now or sometime in the near future, a domainer developer can code and develop sites but probably wouldn't develop .pros immediately, or if they do it will be a template roll out or experimental mini site.
The breakdown of current .pro registants is critical in determining the best policy for developing the extension. Registrypro have failed to date because they won't accept accept the reality of their market. They will not develop .pro by focusing on the 1% of genuine professionally qualified .pro developers, at least not for the timing being.
Most professionally qualified staff work for companies and they already have a .com or a ccTLD, all the web sites they deal with on a day to day basis are .com or ccTLD. Professionals get qualifications because they are more conformist and risk averse than other people, they wanted a guaranteed salary and security and are prepared to put theselves out to get it. Professionally qualified people and firms are less open to using new domain extensions than unqualified entrepreneurs and have more cash and resources available to acquire whatever .com they want in the first place.
The formula for developing .pro is to put genuine .Pro professional developers on the back burner for now and focus on the alternative extension domainers and developer domainers. What matters to these groups that make up 99% of the existing customer base? Price, and only price. For alternative extension domainers, an 80% reduction in reg fees results in an 80% reduction in their annual speculative loss, therefore cutting reg fees would massively increase demand for .pro domains, probably 100-1000 fold.
Next you've got the domainer developer, I would class myself as one of these. I have tiers of domains awaiting development, firstly .coms, I'm working on a .com development at the moment. I can code basic HTML, PHP, MYSQL, and use Dreamweaver, Fireworks, Flash etc. Below my .coms, I have a small portfolio of .infos, I have spent about $50,000 on them but I don't have any plans to develop them yet, .info has made fanstastic progress but its still not mainstream. Then I have my .pros, they are my seeds for the future, I put them in the ground, water them, and hope they will grow.
For me to keep watering my seeds, I need a reg fee reduction. If not, I will let all my weaker .pros expire just like people did before me. 80% of the economic value of my .pros are in 20% of my keywords so I have plenty of scope for a cull, it would make more sense to write off $20,000 of sunk reg fees than drop another $20,000 on renewals.
Now Diabro and maybe even Registrypro will say, so what, what do you add to .pro by holding them, you don't develop them, alternative extension domainers don't develop them either. This is the rub, if I drop strong .pro keywords it kills off the development of a .pro aftermarket because if you can reg strong .pro keywords for $99 few people will pay $X,XXX for a .pro. By dragging down the value of keywords across the extension fewer registrants will consider weaker unregged keywords to be worth $99, that reduces total .pros registered and increases Registrypro's losses, making even less money available to reach out to qualified professionals and convince them the extension is viable.
Again Diabro won't agree with me but low perceived value directly restricts domain development in the same way expensive land is more likely to be built on than cheap land. There are several reasons for this 1) Sites are perceived by end users as being more legitimate if they have a blockbuster .com name. It doesn't preclude turning a bad .com or alternative extension domain into a great business, it just makes it harder. That's why people pay a premium for impressive .com names even though their valuation might not be PPC backed, 2) The opportunity cost of not developing a valuable domain asset is higher than a reg fee domain. If I have a .com worth $500k but only make $5k per year in PPC, I'm only getting a 1% return on my capital, assuming to capital growth, I'd be better off selling it to somebody who will develop it and investing the $500k in something more lucrative generating a 5% return. By not developing or selling to somebody who will, I'm losing out of 4% of return per year on my capital, again assuming not capital growth. 3) Psychologically people are more inclined to invest time and effort into something they consider valuable, whether that be a relationship, good cause, a new sports car, a home in an expensive area etc. I will develop what I consider my strongest .com domains before my weaker .infos. By driving up valuations domainers make it too expensive to do nothing with top domains.
The dymanic that Registrypro can't grasp is that until an extension reaches critical mass in terms of total domains registered, awareness, and acceptance developers will not be interested whether they are professionally qualified or not. Professionals have had .pro on a plate for 4 years and they didn't want it.
Without tens of millions of dollars to pay for advertising and promotion, the only way to develop .pro is to focus on the Encirca customers who did register it, alternative extension domainers and domainers developers. Their demand for .pro is very price elastic, a big drop in price results in a disproportionate increase in domains registered. .pro has to walk before it can run, it needs to get millions of registrations to make it a viable business whether the sites get developed or not. Then when it has the cash coming in it can spend it on promoting .pro to its target professionally qualified audience.
When there are millions of .pro domains registered, more and more professionally qualified people and firms will start thinking .pro might actually work and warm to developing it. Domainers won't stomach losses forever so there will be a supply of strong keywords for relatively modest sums. Domainer developers will start developing their stronger .pros, maybe selling a few of their weaker ones, and the whole process becomes self reinforcing. The registry makes more money in reg fees and has more money to spend on promotion.
To sum up, to develop .pro Registrypro have to slash reg fees to attract the sort of people who make up 99% of their existing customer base, alternative extension domainers and domainer developers. This, combined with main panel deals with a couple of big registrars could get .pro to 1m registrations within 2-3 years. That would then give them a fighting fund for promoting .pro to qualified professionals. If Registrypro focus on the 1% of existing customers who are professionally qualified with professional service sites, they will add another couple of hundred developed sites but lose Hostway another $2m-$3m and get the extension nowhere.
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