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Will You Invest in .XXX Domain Names

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Yesterday afternoon, I posted some information about the upcoming launch of .XXX domain names with insight provided by ICM Registry Chairman and CEO Stuart Lawley. I am curious if you plan to purchase any .XXX domain names for development or investment purposes.

As with many other gTLDs that are anticipated, I will likely purchase a few as investments.


.XXX Gearing Up for Launch: An Inside Peak at the ICM Registry

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ICM RegistryYesterday afternoon, I had the chance to speak with Stuart Lawley, Chairman and CEO of the ICM Registry, the company that manages the .XXX domain registry. I wanted to see where the company is at with regards to the upcoming launch, and he was kind enough to provide some information and insight.

The company is currently counting down until the Sunrise A and B period, which begin on September 7 and runs through the end of October. Sunrise A will give trademark holders in the adult community the opportunity to secure their trademark .XXX domain names. They can also attempt to secure their .XXX names if they own a corresponding domain name in another tld. For instance, the owner of FootFetish.com can claim FootFetish.XXX during this period.

Sunrise B is similar and takes place at the same time as Sunrise A, but it is the period for non-adult companies to claim trademark names for the Registry to not give out to others. For instance, Disney can put a claim onto Disney trademarks so nobody can purchase Disney.XXX or other disney trademarks. The interesting thing will be if an unrelated entity, such as someone with the last name Disney, claims Disney.XXX in Sunrise A. That could pose a predicament.

If there are multiple parties interested in particular domain names, they will be auctioned to the highest bidder, with all auctions going through Pool.

From November 8 – 25, there will be the landrush period, where people can place their orders for .XXX domain names that haven’t been claimed or that aren’t reserved by the ICM Registry. If names have multiple bidders, they will be auctioned via Pool.

According to Lawley,  635,000 unique names had been requested when there was the opportunity to request them via non-binding means. I know this isn’t entirely accurate, but it’s  indicative  of the demand. Lawley went out on a limb to predict that  300-500,000 .XXX domain names will be registered in the first year.

Similar to the .CO Registry’s Founders Program, ICM Registry has done the same for .XXX. The period for requests has since passed, and the Registry awarded a number of domain names to publishers who get the name(s) for free but must put up a website ASAP. Some of these (likely not safe for work) include the following:

  • casting.xxx
  • dating.xxx
  • kiss.xxx
  • latin.xxx
  • book.xxx
  • muscle.xxx

The Registry is taking some unique measures with their domain registrations. All domain names will have the McAfee Secure Service enabled, protecting visitors from viruses and other malware. Ordinarily, this tool costs over $300, but it’s being given away for free to all registrants for all .XXX domain names.

In addition to this, Lawley explained that search engines like Google and Yahoo don’t do a fantastic job of helping searchers find adult websites. The Registry is going to set up a unique adult search engine with some of its reserved domain names like Porn.XXX and Sex.XXX and will use those as search portals searching through the .XXX websites. Since all .XXX names will have the McAfee protection, they are saying it’s now a safe way to search for adult content online.

Lawley mentioned that the few .XXX names that they put on the root (like Sex.XXX) generated hundreds of thousands of unique visits when they were tested for 48 hours in April. It’s interesting that people were already exploring .XXX via type-in before the extension had even been fully launched.

The ICM Registry team has an experienced management team running the registry, and it will be interesting to see how they market .XXX domain names. I am told they are a key sponsor of the upcoming TRAFFIC conference, and I am sure the party they plan will be noteworthy. The Registry also plans to exhibit at adult shows and conferences as well.

If you have an interest in learning more about Lawley and hearing more about the launch, you should tune in to Webmaster Radio this afternoon at 5pm EST for Victor Pitts’ interview.

Cost for Back End gTLD Services

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It’s a fact that applying for a gTLD is going to be expensive. We know that the cost for a gTLD application is a non-refundable $185,000 payment to ICANN, and the cost will be considerably more if there are other companies that wish to operate the same gTLD.

In addition to the fixed costs of applying, there will likely be additional legal costs associated with the application as well as consulting costs for companies that want to work with experience professionals like Right of the Dot and Minds + Machines.

These front end costs aside, the actual cost of maintaining the gTLD registry has been an unknown to people without the experience of running a domain registry. Minds + Machines, a company operated by Antony Van Couvering,  just put out a press release announcing a simplified pricing plan for back end gTLD services.

According to the release, “for a flat fee of $100,000 a year, the company will provide unlimited registrations for new TLDs using the Espresso platform, with no per-name fee for most new TLDs.”

The company is also willing to offer a discount to “disadvantaged or needy applicants providing services to underserved communities.”

Press Release:

Singapore, June 24 2011 – Minds + Machines, a wholly owned subsidiary of Top Level Domain Holdings (London AIM, TLDH.L) today announced new pricing for back end registry services for top-level domains. For a flat fee of $100,000 a year, the company will provide unlimited registrations for new TLDs using the Espresso platform, with no per-name fee for most new TLDs.

“We’ve simplified the model,” said Antony Van Couvering, CEO of Minds + Machines. “For a simple, low, flat fee, any prospective applicant can be in the TLD business. Until now, pricing for registry services has been shrouded in secrecy, and potential applicants have had to try to decipher convoluted pricing tiers. The new gTLD program, approved on Monday by ICANN, was meant to usher in a new era of choice and innovation. Minds + Machines is proud to kick that off with our offering.”

“ICANN has opened the Internet’s addressing system to the limitless possibilities of the human imagination,” said Rod Beckstrom, CEO of ICANN. “We have provided a platform for creativity and inspiration, and for the next big dot-thing,” said Peter Dengate Thrush, Chairman of the Board of ICANN.

“The Minds + Machines flat-rate formula is predictable, simple, and attractive,” said George T. Bundy, president of BRS Media, operators of .FM and applicant for .RADIO. “We have been using their Espresso platform for .FM, and it is reliable, flexible, and easy to use. Combined with this pricing it’s very attractive.”

The new Minds + Machines offering excludes certain high-volume super-generic terms such as .music, and geographic terms such as .nyc. The new pricing will be extended to existing clients.

In addition, for disadvantaged or needy applicants providing services to underserved communities, Minds + Machines will offer the service for a 50% discount.

“Our goal is to increase the number of new gTLDs, and the new pricing will be a great help. The fact is that many applicants don’t know how many registrations they will achieve,” said Van Couvering. “The better you can predict your costs, the less risk there is to applying for a new gTLD. An all-inclusive flat fee will give applicants predictable budgets and great savings if they hit their numbers.”

Being First to Announce gTLD Intentions May Be Critical

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I’ve read about a number of companies and organizations that have already announced plans to apply for a new gTLD. Several of the potential new gTLDs have more than one applicant at this point. From my perspective, it may be best for companies to announce their gTLD application intentions early to dissuade others from applying for the same extension.

Some keywords are more likely to be contested than others. I believe there have been two or more companies announcing their intention to apply for extensions like .nyc, .eco, .gay and a few others. I would imagine there were be multiple applicants for gTLDs like .insure, .hotel, .eat….etc.

However, there are probably plenty of keyword extensions where competition won’t be as fierce. I received a press release from a company that plans to launch .Jewelers, and by being first to announce this, it might dissuade others from applying. With so many available keyword gTLDs, why choose one that someone already claimed, when that will likely mean a lot more money to win the bid?

In my opinion, those who announce intentions earlier are less likely to face competition from others. If I had plans to apply for a particular gTLD and I heard that another company was going to apply as well, I would probably shift my focus elsewhere. The application process should be focusing on how to sell domain names and monetize the gTLD rather than on how to win the bid.

I Don’t Understand Brand gTLDs

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I am personally not opposed to new gTLD domain extensions at all. In fact, I am more in favor of them than anything, and like any free enterprise, I encourage entrepreneurial companies to try and make money with them. My bet is there will be some great successes and some pretty big failures.

One thing I can’t seem to understand is why a company like IBM, Canon, or any other well known brands for that matter would choose to spend close to $200,000 on a gTLD application and then whatever the ongoing annual cost is for  maintenance. I especially don’t understand it when a brand like Canon doesn’t really have other companies that share the same name and may cause confusion.

From my perspective, a brand .com domain name works just fine. For instance, consumers can easily type-in Canon.com or find it by searching “canon” in Google. The company can use subdomain names or folders for internal pages. For instance, a company like Marriott, with its various locations around the world, might use subdomain names or folders to give each property an individual “website” within the corporate umbrella.

Again in my perspective, Canon.com sounds much better than Canon.canon or Home.canon or anything else that Canon would choose to use for its home page. Of course, they control the entire extension so it can really be whatever they want, but from a marketing perspective, it doesn’t seem to make a lot of sense and may cause confusion.

I do really like the idea of geographic gTLD domain names for large cities. I would think .nyc and will gain some serious traction here in the city, especially if the city government uses the extension for some of its departments. Further, I think generic names like hotels.nyc or restaurants.nyc will be great names to own, and I imagine the registry will be able to build a solid business selling .nyc domain names locally.

That being said, I don’t understand why an established brand, especially those which don’t have other large corporations with the same name, would want to spend so much money applying for and maintaining a gTLD. Can anyone offer some insight?

New gTLDs: Increasing Lowball Offers

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As you know by now, ICANN voted to approve the new gTLD program in Singapore, and this will allow for the creation of new domain extensions like .nyc, .eco, .law, and likely hundreds of others. I received a few emails asking me for my opinion on the gTLD impact on the domain investment space, and I am sure I will write a post about it at some point soon.

It seems that some people may be using the new gTLD approval as an excuse to send lowball offers on .com domain names. Cataclysmic emails talking about the demise of .com domain domination and valuation, which include lowball offers to take them off the hands of the owners are amusing to me. Thank you, but I will take my chances with my .com domain names!

The short of it is that I do think consumers will adopt the usage of gTLD domain names in time, but over the next few years, I believe .com domain names will continue to be the “go to” domain extension of big and small business alike. While companies like Canon appear to be interested in applying for branded gTLD extensions, I can’t imagine that will be the case for the vast majority of companies.

Similarly, I can’t foresee a company that doesn’t apply for and get a gTLD moving to a different gTLD. For instance, I can’t imagine a company like Staples using something like Staples.shop or Honda moving to Honda.cars. I do believe some companies will opt for gTLD usage, but I still see it as a limited opportunity for established brands.

I will flesh out my thoughts later, but for now, the “sky is falling” emails complete with lowball offers are amusing.

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