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Risks in Buying ccTLD Domains: Example of .LY Domain Name Taken by Registry

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ccTLD investing is probably most interesting to me because of my travels, not because I am a ccTLD investor, or because I use ccTLD domain names regularly. Businesses in many countries outside of the USA favor local ccTLD domain names over .com, although there are still a number of countries whose citizens prefer non-ccTLD domain names.

One of my biggest fears with ccTLD domain names is that the country in charge of the registry can set rules and regulations that wouldn’t be expected in the US. It’s one thing if you live there and are accustomed to those local laws, but it’s another thing if you’re a US citizen and you use a ccTLD in the US, but your domain name is governed by a foreign entity.

Internet consultant, Ben Metcalfe, reported about a situation his company is facing with regards to VB.LY, an important .LY domain name his company owns – well owned.   According to a post on Ben’s blog,

The domain was seized by the Libyan domain registry for reasons which seemed to be kept obscure until we escalated the issue. We eventually discovered that the domain has been seized because the content of our website, in their opinion, fell outside of Libyan Islamic/Sharia Law.

It seems odd that a domain registrar is taking over a domain name based on its content, since the content is hosted on servers that reside outside of Libya. When I reported an instance of copy theft to Godaddy, they told me it was out of their scope since the domain name is only registered at their company, and the actual website is hosted elsewhere.

This is something every ccTLD investor and web developer MUST consider when buying ccTLD domain names. I wrote an article about how domain hacks can lead to confusion in the market place, but I think this is a far more important consideration. A company like Bitly, whose primary domain name operates on Bit.LY, needs to be mindful, especially when Bitly has very little (or no) control over the content to which they are linking.

Think Twice Before You Use a Domain Hack

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Domain hacks can be cutesy, and the more publicity some of the popular hacks receive, the more others want to emulate. The problem with domain hacks is that they can be confusing to consumers, especially when they don’t mention the “dot” in their branding.

Just the other day, I wrote an article about a new start up called Bump, which smartly operates on Bump.com. One of the people who read the article made a comment about another company called Bump, although that company operates on Bu.mp. Unfortunately for the Bu.mp guys, they are most likely going to lose traffic to the Bump.com start up, and not only is it their own fault, but there’s really nothing they can do about it since Bump.com is a venture backed company and the domain name wouldn’t be for sale.

Delicious and Bitly were two of the first startups that went mainstream to use domain hacks, and luckily for both, they were able to get the .com domain name to match (Delicious had to purchase Delicious from the registrant). Delicious probably paid a lot more for its .com domain name simply because it built up considerable traffic and brand recognition unintentionally. People, especially in the .com centric US, just assume it’s on a .com.

Just this past week, Google announced its new url shortener, which uses the domain hack Goo.gl for its own url. Smartly for them, they also own Googl.com in the event of typos, although it seems like they are differentiating it from the main search site by emphasizing the “dot.” On a side note, it will be interesting to track the traffic to GL.com, since there will probably be people who inadvertently type in Goo.gl.com in error.

My recommendation to start ups and to anyone who wants to use a domain hack is that they should only do it if they can secure the .com. If they can’t secure the .com but must use this hack for some reason, it’s critical to emphasize the “dot.”

Huffington Post Spotlight on .CO Registry and Juan Calle

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.CO Registry Founders ProgramThere was a nice article on the Huffington Post about Juan Calle and the .CO Registry. Aside from the mildly insulting comment that seems to equate domain parking with cybersquatting, it’s a pretty good article about the Registry and its marketing efforts, which have been led by Calle, Lori Anne Wardi, their internal marketing team, and the external advertising team at the Pappas Group.

The article discusses how Calle and his company went up against a registry powerhouse to get the rights to administer the .CO Registry and came out on top. Additionally, the Registry’s efforts to combat cybersquatting are also mentioned in the article. You can read a bit about those efforts in a previously written article.

One thing the article only briefly mentions is Calle’s previous Internet success. One of Calle’s companies, Straat Investments, owns and operates websites like ParisHotels.com, MiamiHotels.com, LondonHotels.com, and many other great cityHotels.com domain names through its Federated Travel brand.

Congrats to Calle and his hard working team at the CO Registry. This has been a hell of a year for him, and in my opinion, he deserves the TRAFFIC Domainer of the Year award.

Guest Post: CIRA’S .CA “Election” Is On

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Zak Muscovitch from DNattorney.com writes this guest column on the Canadian domain name registry elections that are currently underway.

Canada’s .CA registry, the Canadian Internet Registration Authority (CIRA) is run by a Board of 15 Directors. A single seat has opened up for the public, and I am running in the election for it. The other four seats that are up for an “election” are already locked by CIRA for its own hand-selected nominees, who do not represent the domain name community at all. In fact, CIRA’s “Nominations Committee” rejected the application of at least four prominent Canadian domainers. So, although there will be an “election” for five seats in total, this is the kind of “election” that we are accustomed to in non-democratic countries. You will recall that Saddam Hussein regularly won elections with 98% of the vote.

I have however, decided seek the single vacant Board position available to the public. If I get on the Board, I will vigorously put domainer issues on the agenda. Most Canadian domain investors will readily tell you that they believe that CIRA rules, regulations, policies, and procedures, stifle the growth of the .CA space. This opinion is borne out by Verisgin’s report which shows that Canada does not even rank within the top 10 ccTLD’s in terms of number of registrations. In fact, in 10 years, CIRA has only registered 1.5 million domain names, a paltry number when compared to other ccTLD registries. I believe that the depressed .CA market is directly tied to Canda’s lacklustre performance in Internet commerce. The CFO of Google, who is Canadian, said in February, 2010, that Canada is in danger of missing the digital revolution altogether.

My objective is to help CIRA improve the .CA space by listening and responding to the needs of the public, and to domain name investors in particular. I believe that domain name investors are the chief stakeholders in the registry and are experts in how to build and grow online businesses, and should be recognized as such. Domain names are the “cornerstones” of Internet commerce. By dramatically increasing the prominence and visibility of .CA domain names, they will increase in value, and that is great for Canada’s digital economy. The way to achieve this is primarily, to remove the archaic red tape that binds .CA domain names like ancient mummies.

Many of you know that I have been an advocate for .CA domain name owners for over ten years and that I can be counted on to continue to make sure that the issues that are important to you, get heard, loud and clear at CIRA.

Voting will take place from September 22 to 29, 2010, but in order to vote, you must become a member of CIRA. CIRA membership is open to all .CA domain name owners, and involves a simple application, which is separate from having a CIRA registrant login. A registrant login is not the same as a CIRA membership. You need both.

Please REGISTER TO VOTE NOW BY BECOMING A CIRA MEMBER. You can register to become a CIRA member by clicking here:

https://member.cira.ca/en/member.html

This should take you five minutes, and involves uploading ID, or appointing a guarantor. Uploading the ID is a faster process for CIRA to process. CIRA has been very slow to process memberships, so please do not wait, and register to be a voting member now!

YOU MUST REGISTER ONLINE BY AUGUST 30, 2010 to be eligible to vote!

Members can also Show Support for my candidacy from August 26, 2010 at noon (ET) until 6:00 p.m. I require 20 ‘shows of support’ to be able to run as a candidate for the eventual vote to be held between September 22, to 29, 2010.

For More Information:

CAMAPIGN WEB SITE: http://zak-for-cira.ca

EMAIL: zak@muscovitch.com

Flipping.co: .CO Worth “4% of .COM”

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I went to check on a submission I made at Flipping.CO, and I noticed that the domain names had appraised values next to them. Curious about how these were appraised with barely any sales results, I sent an email to Flipping.CO’s Francois Carrillo to ask how the values were ascertained.

According to Carrillo, the .CO appraisal is “4% of .com.”   It’s an interesting (and somewhat arbitrary) number that was based on Carrillo’s “experience and first sales.”

I don’t know if he’s right or wrong, and only after the auctions are done and secondary market sales are reported will we see how things shake out in terms of valuation. I haven’t sold any .CO names yet, and although I’ve received a couple of offers in the mid $xxx range for a three letter .CO, I have passed, preferring to wait until a solid aftermarket forms.

If you had to guess, what do you think .CO domain names are worth compared to .COM?

Buying .CO Domains for Typo Traffic

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As one would expect, there are many people who are buying .CO domain names with the hopes of capitalizing on typo traffic. These people are looking through Alexa, Compete, Quantcast, and other various traffic estimation tools in the hopes of purchasing .CO domain names that will get traffic intended for the .COM.

One thing people need to be cognizant of (aside from trademark issues which I am not going to discuss) is that many high traffic websites get significant search engine traffic, and there isn’t going to be leakage from that. If someone visits a website via search engine or other referral, there will be no leakage to the .CO unless the referrer makes the typo.

Yesterday evening, I was asked if I had an interest in Burbank.CO. A reader of my blog offered his position in the auction because I didn’t back order it, and I wasn’t interested. I’ve been very fortunate with SEO and referral traffic for that site, and at the present time, only about 14% of the traffic is from type-in.   Assuming 20,000 visitors per month total, that means under 3,000 are typing it in to their browser.   If .3% of this traffic typos it, that’s about 9 visitors a month that I am losing.   It just doesn’t make that much sense to pay more than $500, which is where this name ended I believe.

There are a number of .CO websites that are live, where the .COM website is also live. Sex.com/Sex.co, Porn.com/Porn.co, Porno.com/Porno.co, Hotels.com/Hotels.co, and Weather.com/Weather.co are five such comparisons you can do, as I would imagine these sites rely on significant type-in traffic, which is where the leakage would take place. Since I don’t know how long each .CO has been live, I can’t say whether it’s 100% accurate, but here are the Compete numbers and % of traffic:

  • Sex.com – 135,793 | Sex.co – 393 – .CO % of .COM traffic: .23%
  • Porn.com – 1,807,569 | Porn.co – 1,015 – .CO % of .COM traffic: .056%
  • Porno.com – 233,909 | Porno.co – 656 – .CO % of .COM traffic: .28%
  • Hotels.com – 4,822,172 | Hotels.co – 1,698 – .CO % of .COM traffic: .035%
  • Weather.com – 31,992,990 | Weather.co – 29,893 – .CO % of .COM traffic: .093%

As you can see, there isn’t much leakage to the .CO, so investing a lot of money with the intent only to capitalize on typo traffic isn’t smart. Of course .CO domain owners can (and many will) develop their .CO domain names like I am doing, however, relying on revenue from typo traffic here might not be a smart play.

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