news Verisign Blog Calls Us All "Domain Scalpers"

One thing is inflation is creeping back in to the system. Current rate in the United States is 2.54%. So we have six years of 2.54% inflation rates, eight if you count the last two years.

If that goes up to say 4%, or higher, it might be not so bad as everyone thinks. So if you price up domains at say $299 or $399, these prices should be more attractive to the consumer.

1.07 x 1.07 x 1.07 x1.07 = 1.310796 - 31% at year six

(1 x 2.5% inflation ) x 8 = 1.218403 - say 21% at year six, after eight years inflation of 2.5%, two of which we have had.

So for the next two years, with higher inflation, it should be easier to sell these on a volume/commodity basis.

Now let's throw in the last three years at say 3%, 3.5% and 4% (the number of death to Chinese domainers :D)

(1 x 2.5% inflation ) x 5 = 1.134
1.134 x 1.03 = 1.16535 (Year 4)
1.16535 x 1.035 = 1.20613
1.20613 = x 1.04 = 1.254383

Not quite a draw but almost :D

I'm sure I'm not gonna get a lot of love for this but I do think they have a point. Domainers do create scarcity and inflate domain pricing.

I sometimes wonder how big the '.com bubble' is. Just because every ( par example ) cryptoKeyword domain is taken doesn't mean it's worth more than regfee.

For some niches, 99% of domain options are regged by domainers (and left unused for eternity) but does that really mean any decent domain in this nice should be considered valuable?

Digital assets get compared to real estate a lot. If I were to buy all available assets in a specific region that would be concidered as a disruption of the market. Market pricing would go up, not taking into account actual value of the property.

You see this happening a lot in real estate at the moment making it unaffordable for a lot of people to even buy a decent house as investors buy up whatever is available.

To some extent the same goes for domains. A lot of great assets are being left unused just because market price is way out of line with actual value to an end user.

However, raising floor pricing (read reg fee) is never the solution as that just adds to the problem. In the end all that registries should be concerned with is keeping pricing/reg fees as low as possible. Their priority should always be the average end user and leave us domainers from another realm live in peace

Talk about biting the hands that feed them.

Should we consider real estate investors "house scalpers" too?

NameDeck said:

I'm sure I'm not gonna get a lot of love for this but I do think they have a point. Domainers do create scarcity and inflate domain pricing.

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To get a little zen: do you do the breathing, or does some other force make you breathe?

Do domainers create the scarcity, or does it simply exist as a phenomenon of the New Economy?

Time for a beer at this point :D

What with expected 28% dot-com price increases coming and all the other negative stuff it may be best for many small to mid-size and large domainers to set many of your domains on non-auto renew, possible most and let expire. The list below is long and quite depressing but we need to face up to it all...

parking revenue is down an estimated 95% and ongoing decline compared to 7 to 10 years ago, imo,

plus many if not most affiliate programs are doing much worse over time

in addition domain traffic in general seems to be down (except several major sites which are sharply higher)

type-in traffic in particular has dropped big time due to various issues over past 5 to 10 years

Googles plan to remove the address bar window can cause more major damage in the near future

recent need to be https compliant is complex and costly what with buying and installing SSL certificates

parking firms ignoring https due to high cost is another issue causing more drops in traffic and revenue

a giant drop in Chinese Chip sales and values which market appears to have vanished

the apparent decline in bitcon/crypto sales and values (look at all the sale threads here without offers)

what seems to be a decline in brandable name popularity and sales is now here or arriving soon, imo.

all the new extensions have caused major problems with over-supply and great market dilution

A much bigger issue than realized is when a buyer goes to Godaddy etc to reg a name he sees the desired domain is for sale at a high cost but on same page GD and others suggest dozens of alternatives for far lees or reg fees. So more often than you know buyer decides to not buy/offer your domain, which happens frequently.

Nat Hunt said:

It's 7% a year for 4 years in a row, I think. So it could be a 31% price hike by 2024.

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Bob Hawkes said:

Verisign are feeling pretty secure

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Verysign = Clownz

"That's all I have to say bout that" quote by Mr. Gump

For all their self serving, sanctimonious, posturing, they are probably well aware of what domain investing has brought to the table and how the domain industry has not only padded their bottom line but also helped in shaping the infrastructure.

Discrediting someone or a body(Domain Investors/Domain Industry) in the success of the .com extension, has been keeping with the current trend. Discredit. Discredit Discredit!

In a sudden turn of events. the C-Level executives returned their bonuses earned during the 2015 Chinese boom, aka earned from domain speculators/warehousers who add little to no value NOT!.

Let the hypocrisy continue and the powers to be can enjoy their Caviar and Dom Perignon.

The follow-up thread should be:

Which new gTLDs should we invest in?

Remember, a large hold back for gTLDs are the unprofessional registrars. While .com reigns as king, Verisign can hurt its reputation and allow for competition. So, in other words, if Verisign continues to speak like this, expect a better registrar to come forward in the future.I just wonder which gTLD that will be.

Maybe the petition domainers signed not to raise .com pricing pissed em off , now they start name calling to get us back lol. scalper is kinda of shitty reference of them to use though.

May be we should stop doing business with VeriSign

There's always some new genius that comes along within an established company that calls for some drastic business model changes to shake up a market that's already doing well, leading, and standing the test of time, and as the majority of the time, it eventually backfires.

It's kind of true what they said though, "scalpers" are creating a scarcity, a scarcity for garbage names that no one else wants. When the pros adapt their business model and "scalpers" can no longer afford to juggle their hundreds/thousands of crap registrations and release it to an open market never to be registered again, VeriSign will feel the burn.

It is sheer monopoly dictates here. .Com has been like a Cancer, we have to live with it. It is irresponsible for Verisign to call us Scalpers.

DanSanchez said:

Absolutely disgusting piece, every one of you should be commenting and sharing your thoughts on this attack piece by someone who willows in her own hypocrisy.

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We are Domain Collectors, not Domain Scalpers

You can always renew your best domains 10 years out if you are capped about rate hikes.

Otherwise I would recommend people to complain to the SEC to look at trading logs as insiders really love to omit certain holdings from current political retroric stateside.

The fix for this was in a long time ago,
Especially when they hire one of their biggest critics to join their team.

Given many large organizations own thousands of names also. The domain industry is small, there is only a few large players with those monster portfolios. Since most people like to rag on domainers this is the easiest scapegoat for justifying a price increase.

As it doesn’t matter by what percent, no consumer big or small likes any sort of price increase.

equity78 said:

Mike Berkens called me today to go over the post and to him this was all calculated, because the end goal is no price caps.

I said years ago, Verisign must look at new gtlds and be like WTF? We invented this model with .tv. They are playing the long game here.

https://www.thedomains.com/2018/11/02/verisigns-potential-long-term-goal/

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Since many new registries apply premium renewal price scheme to certain keyword domains and short-length domains. Even Google do the same thing to their .APP domain and it's now somehow became the industry norm. It make Verisign have a justified reason to do the same thing on .com domains.

kam said:

Since many new registries apply premium renewal price scheme to certain keyword domains and short-length domains. Even Google do the same thing to their .APP domain and it's now somehow became the industry norm. It make Verisign have a justified reason to do the same thing on .com domains.

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The big difference is Verisign did not create the .COM extension. They do not own it.
They are just contracted to manage it. They are essentially just managing a database.

There is zero justification for them to charge a premium price for a domain as it doesn't cost them anything extra to maintain that data. Even they should know that is a bridge too far. Many much larger companies like Google, Amazon, and others own giant portfolios of generic top tier .COM domains.

Brad

bmugford said:

The big difference is Verisign did not create the .COM extension. They do not own it.
They are just contracted to manage it.

Brad

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The problem is that ICANN isn't telling them that, so Verisign acts like it owns the entire internet at this point.

bmugford said:

The big difference is Verisign did not create the .COM extension. They do not own it.
They are just contracted to manage it.

Brad

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Back in 10 years ago, many folks here had a debate and they said registrars do not have the ownership on registrant domains, they just help registrant to manage their domains. They had no right to resale their domains and put them on auction. And you know what, nowadays noone care about it anymore. Domainers will only complain how slow the registrar assigned the winning domains to them. It's the power of industry norm.

So, it doesn't matter whether Verisign own it or not.

They are now promoting themself as "Domain Scalpers Fighter". They said they want to make sure that price regulation actually benefits consumers, instead of contributing over a billion dollars to domain speculators every year.

Let's guess what will be their next move?

Kam

Rick has now spoken re the Verisign blog post, calling for an apology:

" ..it was mean spirited, it was uncalled for and most of all it’s simply not true.."

http://www.ricksblog.com/2018/11/ve...-bus-fck-you-verisign-apologize/#.W92zeWJKgiY

To add salt to the wound today I just discovered Uniregistry has raised my dot-com renewal/reg fee from $8.67 to a high $10.88 that's a big 25% price increase from Uni and when combined with the approved 28% Verisign increases it adds up to a staggering 53% total cost increase. The only way to avoid this substantial Uniregistry increase is to join the Uni Pro domain perks at high cost of $18-mo. That's something I do not desire to do since there will be months I don't reg or renew any names so why would I pay $18 for that month!

wwwweb said:

You can always renew your best domains 10 years out if you are capped about rate hikes.

Otherwise I would recommend people to complain to the SEC to look at trading logs as insiders really love to omit certain holdings from current political retroric stateside.

The fix for this was in a long time ago,
Especially when they hire one of their biggest critics to join their team.

Given many large organizations own thousands of names also. The domain industry is small, there is only a few large players with those monster portfolios. Since most people like to rag on domainers this is the easiest scapegoat for justifying a price increase.

As it doesn’t matter by what percent, no consumer big or small likes any sort of price increase.

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or maybe step in big and register the domain forever:

domainer111 said:

I think we can setup a registrar ourselves and charge say Verisign fee + max ten cents and run it as a co-op. We could then move as a bit more of a block.

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Thank you for your idea, and it is certainly possible. While I certainly would not object to co-operative moves in the registrar, or other, aspects of the business, to my way of thinking we are well served by existing commercial registrars. I find that there almost always are options only slightly above wholesale costs, and with tools like TLD-list and DomComp you can easily find the best deal. The reason we pay, in my opinion, reasonable markups from the registrars is because there is a lot of competition in the registrar space. I realize some registrars with some TLDs charge unreasonable markups, but we have options to not pay them. The best registrars have competitive costs on many TLD options.

The essential problem with one company controlling the .com/.net space (and others), and with .com the dominant TLD worldwide, is that there is no similar competition. If we can't have competition, it is critical that there be real oversight, in my opinion.

Bob

Instead of focusing on the TLD itself, we need a list of registrys that operate ethically and morally. That may be the starting point for a good investment.

NameDeck said:

I'm sure I'm not gonna get a lot of love for this but I do think they have a point

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I want to say that I agree with most things in this well written post by @NameDeck and urge people to read it (and even thank or like it! ).

I totally agree that there are valid points made in the Verisign blog post. I think our industry is not well served by some of the imho ridiculous prices being asked and as a result valuable digital assets go unused. A model where the margins were a bit lower but the ratio of sold to held domains goes up so that net profitability is the same, or even better possibly, would be more healthy.

I think it would have totally been proper for the blog post to say that wholesale prices are not the only things making domain name prices high, and suggest ways in which the whole domain community could work together to address that. But to attack ICA and all domain investors perform no useful service is not true and saying it serves no useful role. They support that by arguments that are either distorted or worse. Like their figure for the amount made in secondary market seems clearly much too high to me, and their implication that all prices in resale market is very high and large profits are bing routinely made by most domain investors is not true, in my opinion.

I don''t know what their end game is (see Raymond's interesting speculations). I can't help but think this must be for some US based political lobbying purpose, but now agreement made not clear what that is. Do they still think there is an opportunity to not only control these TLDs but also get premium pricing and the right to sell directly to end users bypassing the registrars? It would seem from the press release that is decided, but the blog seems to be pressing that direction.

Lots to think about. Thanks for your well reasoned commentary @NameDeck!

Bob

I find it real odd Rick Schwartz says in his post several times he is "very happy" and "very supportive" about the approved Verisign price increase, from a monopoly with no competitive bidding. He also says its a monopoly like your utility bills but everyone needs electricity and water not everyone needs a domain name so I do not get the comparison. Maybe Rick forgot several years ago it was reported Godaddy offered to do the .com contract at only $1.99 year per domain but their offer went nowhere. Even at that low price it's still believed today there would be good profit margin.