Bob Hawkes

Bookshelf – Domnomics: The Business of Domain Names

By Bob Hawkes, Apr 8, 2020
  1. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    The book Domnomics: The business of domain names authored by John McCormac, provides historical, statistical and economic insights on the development of the domain industry.

    Domnomics is a noteworthy contribution to our understanding of how the domain business has developed, what mistakes were made along the way, and the hard questions that need to be asked by those making policy decisions or investing in domain names.
    A few acronyms that you will find in this review include TLD (top level domain, such as .com), cc TLD (country code top level domain name such as .ca) and new gTLD (new generic top level domain, such as .xyz). ICANN (Internet Corporation for Assigned Names and Numbers) is the multi-stakeholder nonprofit group responsible for the global domain name system.

    Perhaps the most effective way to describe Domnomics, is to highlight several important ideas from the book that resonated with me. The following is, of course, a small sample of all topics covered in the lengthy book.

    Domain Tasting was Huge

    Before reading this book, I did not fully appreciate the scale and impact of domain tasting. So what is domain tasting? In order to allow for correction after payment fraud and registration mistakes, registrars were allowed to delete, without cost, domain names within the first five days of registration. Domain tasting refers to deliberately registering large numbers of domain names, immediately setting up monetized ads or other means to measure traffic, and then decide within the free drop period if that domain name was worth keeping.

    How big was domain tasting? In 2006 alone, there were more than 367 million .com domains deleted, many times more than the number of stable .com registrations at the time. While a number of the deletions would be standard ones, the vast majority were from domain tasting.

    Domain tasting kept valuable domains out of the hands of true end users, and that had at least two profound impacts. In many regions of the world, it created an environment where the country code domain extensions could prosper. The author explains it this way.
    Much of the case for introduction of new gTLDs was based on an assumption the world was running out of good names in legacy extensions. The numbers used to support that thesis were skewed by domain tasting in a way that was not fully realized.

    Eventually domain tasting came to an end, as rules allowing free tasting were removed, or severely restricted, and Google stopped allowing advertising in the first five days of registration. Several lawsuits, claiming trademark and other types of abuse in tens of millions of tasted domain names, precipitated the ending of domain name tasting.

    Timing is Everything

    The multi-stakeholder ICANN model is often slow to react, and in some cases that delay has negative consequences. For example, in domain tasting, while ICANN were considering the problem from early on, the delay in implementing changes allowed the practice to get completely out of control.

    While the following comment was written specifically on the .tel domain extension, it applies to many other new extension offerings.

    How Is That Domain Used?

    Chapter 7 is concerned with the topic of web usage. The author explains why that is so critical.
    After covering some of the complexities of conducting web use surveys, a wealth of data is provided dividing use into the following categories.
    • Content (C)
    • Templated Content (TC)
    • Redirect (R)
    • HTTPS Redirect (H)
    • Internal Redirect (I)
    • No Content (NC)
    Templated content would include things like standard for-sale landing pages, parked pay-per-click pages, coming-soon holding pages, etc.

    As the author notes,
    For example, in an October 2019 survey only about 14.8% of more than 1.5 million .com domains surveyed were classified in the content (C) category. One should, though, include the H (10.1%) and I (5.3%) redirection categories, but even after combining those, one has just over 30% use. That is approximately equal to the 27.6% TC (template content) and the 30.4% NC (no content). The picture is not strikingly different for the other legacy extensions.

    Many Domains are Deleted Multiple Times

    Chapter 9 of the book considers the question: Are all the good domain names taken? An interesting view expressed is that if the same name is registered, deleted and re-registered by someone else, that is an indication that the name is seen to have value, even though it did not yet find longterm end use. This idea strikes me as something of practical value to domain investors.

    A wealth of interesting data is provided, but within the .com extension, it is estimated that about 64% of domain names are never deleted once registered. In just over 1% of cases, the domain name has been deleted and registered again 5 times. For 0.01% of .com domain names registered, the number is 10, indicating that a few domain names go through the deletion and registration cycle many times. The book provides similar data for the other legacy extensions, as well as estimated renewal rates by year of registration.

    .Info Registrations Doubled in One Month

    The .info TLD launched in 2001, and grew to about 1.2 million registrations by 2004, but further growth seemed to be stalled. The registry decided to give away free registrations, and added 1.3 million registrations in just a month. Whether such campaigns are worthwhile for the registry depends on what small fraction of those will renew, since it is renewal revenue that is the lifeblood of a registry.

    Why was the .info ‘experiment’ significant? It set the precedent for the deep discounting boom and bust cycle that we would later see in some of the new extensions, such as the .xyz penny registration period in 2016, when registrations approximately tripled, to just over 6 million in total, during a single month.
    Both .info and .xyz have significant registrations and real world use today. While it can be argued that deep discounting can kill the value of a TLD, the case can be argued either way.

    The book also points out that a, perhaps unintended, consequence of deep discounting is that certain new extensions find a use base within the developing world, and thus become partly geographical in nature.

    The Unequal Geographical Distribution of Registrars

    I had not fully realized until reading Domnomics how uneven is the geographical distribution of ICANN approved registrars. Of course many of these are multiple related drop-catch registrars, but still the differences are striking.

    There are over 1950 US registrars, with the next highest country being China at only 87. As pointed out in the book, many countries in Africa do not have a single ICANN approved registrar. Despite its commercial importance, and vibrant country code domain extension, Brazil also does not have a single ICANN approved domain registrar.

    Given the critical role that registrars play, I am somewhat concerned over this uneven geographical distribution. While realizing that no matter where they are based, many registrars serve clients around the world, and at least one has recently taken steps to do that more effectively, still the disparity concerns me.

    There is a wealth of other geographical statistical information in the book, for example a breakdown by country of the registrations for each TLD.

    What This Book Is Not

    While Domnomics provides extensive historical, statistical, and factual information on the domain name industry, it is not primarily a book about domain name investing or selling. You won’t find sections on making outbound queries, negotiating a deal, setting prices, designing landing pages or finding comparator sales.

    That said, there is an excellent section in Chapter 8, domaining, with seven questions to ask yourself before investing in a TLD. For example, on the topic of interest:

    A Couple of Small Points

    This book uses the term new gTLD to refer to all extensions beyond the original legacy and country code extensions. Therefore, it includes extensions like .mobi, .pro and .asia, along with the 2012 plus new extension introductions such as .xyz and .top, plus the restricted brand extensions.

    I think the book could have been strengthened, either by largely ignoring the brand extensions, or else devoting more coverage to that topic. Nowhere is this more problematic than in the section gTLD Website Resolution 2019. A table extends for many pages, showing the domains, websites and percentages for each new gTLD. Many of the entries are for brand TLDs, that are owned and controlled by a company, and can only be used by that company, and not registered or used by anyone else. While it might be interesting to see how many websites are on these brand extensions, to mix the data in with general availability extensions, that anyone can register, could easily be misinterpreted by the reader.

    Final Thoughts

    I highly recommend this carefully researched and clearly written book. Whether you are relatively new to domain investing, or have been at it for many years, I think you will find your time spent reading it rewarded with valuable insights.

    The historical accounts are fascinating, and the author provides a wealth of data not available in other publications. I think there is just the right amount of opinion expressed in the book. The book’s author helps the reader see the interpretation and meaning, without unduly promoting one side of an argument.

    The book should be in any academic or reference library, and is essential reading for policy makers. But individual domain investors, whether they invest in legacy, country code or new extensions, will learn from the book. There is excellent care to detail in both writing and information, as well as in documenting sources.

    Near the end of the final chapter the author writes the following, possibly an optimistic ending message.

    About the Author

    John McCormac (jmcc on NamePros) is well known through his service HosterStats, a database that provides domain name registration, hosting and registrar statistics from year 2000 to the present for a large number of domain extensions. NamePros readers also know him from his regular contributions to discussions and the chat room. I appreciate the historical and statistical background that he brings to NamePros discussions, and it was a pleasure to read and review this book.

    Book Details

    Domnomics: The business of domain names was published by MC2 Publications Division on Dec 1, 2019 as an Amazon Kindle eBook.

    The exact price of the 350 page book will depend on your local currency, but at less than $10 USD, the book is superb value.

    The ISBN-13 for the book is 978-1-873556-04-07.

    At 350 pages, this is not a fast read, but quite a few of those pages are tabular material, along with some coloured graphs, so it is not quite as long a read as you might expect.

    The Kindle Text-to-Speech feature is enabled on the eBook. One nice feature of the ebook format is that the extensive reference list at the back of the book is in the form of live hyperlinks to the sourced material, where possible.

    You can access a significant portion of the book before deciding to purchase, via the Look Inside feature at Amazon. But at this price, I can’t see why a serious domain investor would hesitate to add it to his or her personal library.

    All quotations in this review are from the book.

    Join the Discussion

    Have you read the book yet? If so, why not add your own opinions in the comments section?

    What do you think about some of the topics mentioned in the review, such as domain tasting, deep discounting, the significance of domain names that expire and are registered again, and the geographical distribution of registrars?

    Have a question for the book’s author? Tag jmcc in your question.

    This review represents the first in a new Bookshelf series at the NamePros Blog. I will review books relevant to the domain industry. As part of each review I will answer the broad question: What does this book offer to domain investors?

    These book reviews are independent, and there is no sponsorship by any author or publisher. Where opinions are stated in the review, they represent the view of the review author, and not necessarily those of NamePros or its staff.

    Is there a book you would like to see me review? Just let me know.
    Last edited: Apr 8, 2020
    The views expressed on this page by users and staff are their own, not those of NamePros.
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  4. Bob Hawkes

    About The Author — Bob Hawkes

    Domain analyst, writer and informal educator, with particular interests in domain name phrases and non-business uses for domain names. I am a risk averse domain investor who only invests modest amounts in a variety of extensions and niches. Don't hesitate to contact me - I like to help!

    This is Bob Hawkes's 33rd blog post on NamePros. View all blog posts

    Home Page:
  5. Comments (16)

  6. fiftyfrancs

    fiftyfrancs Established Member

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  7. DirkS

    DirkS VIP

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    Cheers. The link to Amazon gives me a not found page. Am concidering buying it to support the author. Nice read, great research like we're all used to from both @Bob Hawkes and @jmcc .
  8. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    Thanks. Yes I noticed for some reason the second one did not work but I think it is now fixed if you refresh the page. At least it works for me.

    There is a wealth of data in the book, and I think you will find it worthwhile, and offered at a value price.

    thanks again,

  9. The Durfer

    The Durfer Wesley Sweatman VIP Gold Account

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  10. Samer

    Samer Restricted (15-30%)

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    Written by one of the smartest people I know.

    Up-to-date data, must-read, thank you @jmcc.

    Last edited: Apr 9, 2020
  11. Martin Andrews

    Martin Andrews Established Member

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  12. Makbliss

    Makbliss Cancer Survivor, domain and crypto enthusiasts VIP Gold Account

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    Great Job, thanks Bob!
  13. DirkS

    DirkS VIP

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    Cheers. All working! With a short holiday coming up this will be a great treat to gift myself :)
  14. FolioTeam

    FolioTeam VIP

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  15. GoKaizen

    GoKaizen Always be Learning VIP ICA Member

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    Great review @Bob Hawkes!

    Why not leave a review on Amazon? I'm sure @jmcc would appreciate that. :)
  16. BradWilson

    BradWilson Upgraded Member Gold Account

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    Another interesting and valuable article, thanks to both of you.
  17. Paul T

    Paul T Established Member

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    Thanks Bob - I will check out the book it looks very interesting
  18. Mohammed Azheruddin

    Mohammed Azheruddin VIP Blue Account

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    Thanks - Will check out this book
  19. Namesolve

    Namesolve Established Member

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    Congrats on your 33rd blog post. keep them coming.
  20. Arjun Oli

    Arjun Oli

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  21. Open 24/7/365 VIP

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    New words for me. I grabbed NOMINATURE in king the other day and it means to name or nominate.
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