news Verisign Blog Calls Us All "Domain Scalpers"

[Bob Hawkes]

It appears that Verisign are feeling pretty secure now that they have their 6 year agreement with 4x7% price increases on .com and their stock popped up 18% today. In a blog post today Verisign say:

"Flipping domain names or warehousing them to create scarcity adds nothing to the industry and merely allows those engaged in this questionable practice to enrich themselves at the expense of consumers and businesses." - Verisign today​

Andrew has written an excellent column on it here, or you can read their blog post (I wonder if it will get revised?) here.

As Andrew points out:

Verisign has been catering to this market for years. Sponsoring its conferences, promoting domain investing, creating the very tools designed to let domain investors know which domains to register…and now it wants to pretend it has nothing to do with this “questionable practice”. C’mon.
​

This is almost unbelievable and I can't believe it will not anger many. At least for those of us who were trying to decide whether we call ourselves domainers (not a dictionary term),domain investors, domain service agents, domain experts, domain originators, etc. no longer need to worry about that. We are all scalpers according to Verisign.

Seriously, amazingly insensitive of Verisign.

Bob (grrrr... feeling angry )

ps I always try to find the bright side of everything. A good day for ngTLD and country code extensions I guess?

 

[DomainRecap]

I am glad that .org was split out from the packagel in 2003, but it is unfortunate that .net and .com are held by the same party. Just too much control over valuable digital real estate. Having .cc and .tv and .name makes it even moreso.

And first outright scamming to buy the only potential challenger, .WEB, then holding it hostage to never to see the light of day.

Love the chain of events there - the Verisign shill company proposes to give all auction proceeds to ICANN (rather than divvy them up between the bidders, as is standard) afterwards paying an insane $135 million straight to ICANN, then after the curtain came down and revealed Verisign as the actual buyer, they had to get ICANN to okay the deal when other auction participants complained and challenged.

There are 135 million reasons why that deal went the way it did.

 

[equity78]

The reasoning is so flawed that I don't know where to begin. VRSN have a license to print money, and they are trashing their customers who risk their own money. Do they want to swap places ? Of course not, they are in such a privileged position.

Then they are suggesting we are disrupting the market, extorting businesses. But nobody has any obligation to turn to a domain speculator for their domain needs. People are free to buy any unregistered .com for $10. That's the truth, few end users are paying more than regfee for a domain name.
On the other hand we have seen their business model in .tv in the past. They rendered the good names unaffordable.
What is at stake is not only the need to keep registration prices 'reasonable' but maintain predictability. The gTLD pricing debacle should serve as a lesson. If the registries are allowed to this creates disruption.

They are in the position of a casino, they cannot be allowed to change the rules all along or make different rules for each player.

They are starting to behave very much like government, a cozy monopoly that thinks it can afford to ignore the people it is supposed to serve.

And they have the nerve to complain. Hypocrisy at its finest.
The bottom line is that consumers are being ripped off because of Verisign's monopoly and the complicity of Icann. They could save well over $1 billion every year. And I too have a simple solution to this problem

Spot on Kate, I just think what Mike said is making sense, this disparagement needs to be done to get their ultimate goal, no price caps, they don't like they can't do what Donuts can do with pricing power.

 

[domainer111]

On the positive side, it is nice to find a topic that
So what do domainers do that is positive?

Bob

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.

How difficult can it be to setup and run a registrar I wonder Bob?

The critical thing is to realise that we have the creation of a commodity here and it's priced accordingly. Speculation accusation is pure emotion talking. Amusing when you think of Verisign seeking premium prices for dot-tv domains.

 

[domainventure]

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.

 

[wwwweb]

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.

 

[alcy]

Well she isn't developing so maybe we can call her / hoarder

I am getting lost in all the new terminology..

so she is a "domain name collector hoarder notdeveloper notreseller notscalper"

did I get it right now?

 

[domainer111]

May be we should stop doing business with VeriSign

If only we could!

 

[.X.]

I can only think of one word when it comes to this 'Corruption"

 

[Mohamed Ahmaid]

Without the aftermarket, they would be making a lot less money.

Exactly

 

[jmcc]

There was some mention that the rise of ccTLDs and new gTLDs impacted on .COM. The problem is that at a country market level, the momentum if shifting away from .COM TLD. This isn't due to the new gTLDs. It is due to business becoming more local and the best TLD for that, in many countries, is the local ccTLD. That's what is going to really hit .COM in the long term. It will manage to get a lot of renewals (think the blended renewal rate for .COM is over 70%). However, the recent targeting of the Chinese market with promotional/discounted registrations fees has created some instability in .COM and .NET. While .COM is large enough to cope, the .NET has been effectively in decline since 2010 or so. The whole idea of linking domain name speculation with the cost of domains is not very well thought out. Speculation is a necessary part of any healthy domain name ecology. Without it, there's no free advertising for the registry. The .COM and .NET TLDs are mature TLDs. They have different dynamics to a new gTLD or a ccTLD. The stability of .COM pricing meant that registrants could effectively plan for the future knowing that they weren't going to get hit with tiered pricing. If Verisign keeps coming up with such blog posts, it may eventually encourage registrants to consider other TLDs.

Regards...jmcc

 

[Bob Hawkes]

Someone should advise Verisign that the term "scalper" is very insulting to our Native American friends and the author should probably apologize for using that as term as an insult.

A good point @DomainRecap

As of now, the article still includes it, for example....

"In fact, the real opportunity for consumer savings would come from reducing or eliminating the more than $1 billion per year in scalping fees that businesses and consumers pay today."

and

"Domain speculation, or “domain scalping,” as some call it, has become a highly profitable industry unto itself. In fact, one of the top domain name speculators in this market reports a net worth of $500 million. These speculators even have their own lobbying group, the Internet Commerce Association (ICA)"​

 

[equity78]

Being well versed in American history I knew it was only a matter of time before that came up.
FYI - I do believe the term was removed from the post.

What they changed was from domain scalpers to domain scalping.

 

[Haykay2005]

The name you call me does not matter. If you want my domain (digital asset), pay the asking price!!

 

[DomainRecap]

What they changed was from domain scalpers to domain scalping.

Doesn't matter anyway, as the link to Ticket Scalpers/Scalping is the same thing, like the Washington Redskins, but that doesn't mean I should start using Redskin, Scalping or Scalper willy-nilly as a modifier to any derogatory term I choose.

Those are extremely old usages, kinda with a grandfather rule, and it's sad that it's gone on as long as it has. We do not need any more _______ Redskins or _______ Scalpers.

 

[1Darko]

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.

or maybe step in big and register the domain forever:

 

[Bob Hawkes]

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.

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

 

[Bob Hawkes]

The list below is long and quite depressing but we need to face up to it all...

It is a comprehensive and accurate list @namemarket. Thank you. I think for the reasons you cite it is, and will continue to be, very challenging for many to even break even. One of the things that bothered me most in the Verisign blog, beyond the insensitive wording, is the implication that large prices are the norm and domain investor ROI are routinely high.

When I tried to see if the industry overall is profitable, 5 of my 7 models suggested it is not even break even. It is true that my "most likely" one did have about 30% ROI ratio, but that is not taking into account any interest costs on invested money or the return for risk that @Kate mentioned earlier in this thread in her superbly written post.

Thanks again and what you say is something, unfortunately, that all of us in the industry should seriously consider. The conditions are getting worse, as you indicate.

Bob

 

[newshunter]

.
If they dont want the business of domainers, i guess they may get what they're asking for.
If the price increase goes into effect, i suppose there will be a massive drop of com domains.
Guess a lot of domainers will be seeking to get rid off at least all the weaker domains in their portfolios
In most cases domaining is a business that is very easy to enter, but also VERY EASY to leave.

 

[namemarket]

The big new jump by Uniregistry does NOT include the already approved 28% future Verisign increase meaning my Oct 2018 price was $8.67 up to $10.88 Nov 2018 and then going all,the way up to nearly $14 or possibly more during the next several years!

That is real significant unless you have a small number of names or manage to sell some of your domains for small fortunes like Rick Schwartz does, so then why care about 53% more reg fees, which may be one of the reasons Rick said on Ricksblog he is very supportive and very happy about Verisign increases.

 

[Mary Muse]

This was very tactfully done, and anyone who gives it leniency is backing it.

So, that pretty much means down with Vsign until they make this right AND MORE.

This is out of bounds. Just shows what abuse at the highest levels can spark.

 

[Cal2]

exactly. it would be interesting to see what would happen to their stats and profit margins if all "domain scalpers" worldwide decided to respond to this by not renewing and not registering any .com names for couple years.

What could be even more interesting is if domainers responded by becoming even more cautious and discerning, and kept registering, but only the domains that would likely sell - if they dropped or registered fewer of the ones with less chance of selling, but which they've been registering and holding till now. There's a limited # of decent/good domains for each category, and a Lot of mediocre to bad ones that fees are being paid on, that end users wouldn't want to build on, even for reg fee.

I could also see more domainer business going to the new extensions, if doing business in .com is made difficult.

 

[Bob Hawkes]

I agree @Alcyy that it is probably to shift attention from the fact that a long monopoly was given, with significant price increases, with perhaps little real negotiation (I don't know the latter).

I feel that if the domain community does not effectively show the errors in the reasoning that to at least some policy makers it will become accepted as true.

What do people feel is coming as the one simple solution to stop the excess costs from domain speculation in her next post?

Bob

 

[DomainRecap]

And I too have a simple solution to this problem

I would like to subscribe to your newsletter.

 

[alcy]

The reasoning is so flawed that I don't know where to begin. VRSN have a license to print money, and they are trashing their customers who risk their own money. Do they want to swap places ? Of course not, they are in such a privileged position.

Then they are suggesting we are disrupting the market, extorting businesses. But nobody has any obligation to turn to a domain speculator for their domain needs. People are free to buy any unregistered .com for $10. That's the truth, few end users are paying more than regfee for a domain name.
On the other hand we have seen their business model in .tv in the past. They rendered the good names unaffordable.
What is at stake is not only the need to keep registration prices 'reasonable' but maintain predictability. The gTLD pricing debacle should serve as a lesson. If the registries are allowed to this creates disruption.

They are in the position of a casino, they cannot be allowed to change the rules all along or make different rules for each player.

They are starting to behave very much like government, a cozy monopoly that thinks it can afford to ignore the people it is supposed to serve.

And they have the nerve to complain. Hypocrisy at its finest.
The bottom line is that consumers are being ripped off because of Verisign's monopoly and the complicity of Icann. They could save well over $1 billion every year. And I too have a simple solution to this problem

well said as always!

I officially make my vote for you as replacement of the domain name collector Madame mcpeerson.

who with me!

 

[urlurl]

i wonder what the split of ownership is domainers vs end-users...any guesses?