DNMW2006 06 27 Domain Name Marketplace Workshop

Marrakesh Schedule & Session Notes > Public Marrakesh Schedule and Notes > DNMW2006 06 27 Domain Name Marketplace Workshop

Agenda taken from: http://icann.org/meetings/marrakech/dn-workshop-27jun06.htm

Contents 1 Details 2 Handouts 3 Tentative Agenda: 3.1 Introduction 3.2 Background 3.3 Life Cycle of a Domain Name 3.4 History & Evolution of the domain name marketplace 3.5 Monetization 3.6 Add-Grace 3.7 Expiring Names Practices 3.8 Long-Tail Proposal 3.9 ICANN Policy Implications 3.10 Wrap-up & Next Steps 4 Domain Name Marketplace Workshop 5 Panelists 6 Tim Cole 7 John Berryhill 8 Josh Meyers, Yahoo 9 Roberto Gaetano, ALAC 10 Sarah Deutsch, Verizon Communications 11 Panelist & Floor Questions 12 Jothan Frakes 13 Tim Ruiz 14 Rob Hall 15 David Maher 16 Jonathan Nevett 17 Pat Kane 18 Paul Stahura

[edit] Details

Session	Domain Name Marketplace Workshop
Time	9:30-12:30
Location	Salle des Ministres
notetaker	Your name here

ICANN is organizing a 3-hour workshop as a first initiative to bring together a broad representative cross-section of ICANN stakeholders to share information about changes and trends in the domain name market.

This is organized in response to:

1. requests from the ICANN community for additional information on the numerous ways value is derived from domain names and how the domain name marketplace has changed in recent years, and
2. questions from the ICANN community about the appropriateness of some of these activities.

The workshop also is organized to help ensure that policy decisions and potential contractual amendments are made with an understanding of the broader impact that such changes may have on market activities.

The audience will have opportunities to interact with the panel.

If you have comments on the topics covered in this workshop or have comments/questions regarding this subject matter, please post to dn-market-comments@icann.org. Comment archives are at http://forum.icann.org/lists/dn-market-comments/.

[edit] Handouts

[edit] Tentative Agenda:

[edit] Introduction

Jothan Frakes, Executive Producer, Domain Roundtable Conference

[edit] Background

Tim Cole, Chief Registrar Liaison, ICANN

[edit] Life Cycle of a Domain Name

Based on policy and contractual provisions, a domain name has a "life cycle". In order to better understand the domain name marketplace, it is important to know how they are acquired, renewed, transferred, and deleted.

[edit] History & Evolution of the domain name marketplace

A variety of marketplace activities have arisen over time, some making use of various phases in the domain name life cycle.

[edit] Monetization

• Domains and Monetization from Traffic - Ron Sheridan, Director of Business Development, Domain Sponsor
• The Role of Search Engines - Josh Meyers, General Manager, Yahoo! Search Marketing
• Large Portfolio Registrant Perspective - John Berryhill, Intellectual Property Attorney
• Individual User Perspective - Roberto Gaetano, ALAC Board Liaison
• Business and Intellectual Property Perspective - Sarah Deutsch, Vice President & Associate General Counsel, Verizon Communications

[edit] Add-Grace

Add-Grace Period Deletions are being used in current practice by some registrars and registrants that some argue is quite different from the original intent. The practice of domain 'tasting' has generated significant discussion. Discussion: impacts on stakeholders and possible responses.

• Impact on Registrars and Registrants - Tim Ruiz, Vice President Corporate Development & Policy Planning, The Go Daddy Group, Inc.
• Impact on Registrars and Registrants: Another View - Rob Hall, CEO, Momentous
• Registry experience/data and proposals - David Maher, Senior Vice President - Law & Policy, Public Interest Registry

[edit] Expiring Names Practices

The handling of names as they approach expiry or deletion is evolving, and with this evolution come changes to the registration experience, from the registrant, registrar, and registry perspectives. Discussion: impacts on stakeholders.

• Registrar Business Models for Expired Names - Jonathon Nevett, Vice President and Chief Policy Counsel, Network Solutions
• Registry Impacts - Pat Kane, Director, Business Operations and Policy, VeriSign

[edit] Long-Tail Proposal

One proposal has been introduced to address a variety of monetization activities. This presentation will describe the proposal and solicit feedback. - Paul Stahura, CEO, eNom, Inc

[edit] ICANN Policy Implications

Discussion on some of the key policy implications raised in this workshop.

[edit] Wrap-up & Next Steps

Jothan Frakes

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[edit] Domain Name Marketplace Workshop

[edit] Panelists

• Jothan Frakes - Moderator
• Tim Cole, ICANN
• John Berryhill, Phd, Esq.
• Josh Meyers, Overture now Yahoo! publisher network
• Roberto Gaetano
• Sarah Deutsch, Verizon Communications
• Tim Ruiz, GoDaddy
• Rob Hall, Momentus
• David Maher, PIR
• John Nevett, VP Policy for NSI
• Pat Kane, Director of business operations and policy for VeriSign
• Paul Stahura, eNom
• Bruce Tonkin, MIT

[edit] Tim Cole

• Explains Domain Lifecycle
• Name can be registered for 1-10 year, then it goes through a number of periods, today, we'll focus on 3 different spots on the continuum.
  • will spend the most time on Add Grace Period
  • Will also spend time on what happens when a name is deleted.
  • Time between expiration and renewal

[edit] John Berryhill

• Slides here
• ICANN often develops policy and then by time it its developed, the industry has moved on
• Largest force acting now is Domain Monetization, names such as LipBalm.com or Photography.com have value for monetization
  • Links earn money simply by monetizing the traffic that goes to them
  • The term used is Pay per Click PPC Advertising
  • People use companies like Google and Overture. As an example, the high bid for "LipBalm" is $.76. Can go as high as $25 - $50 for terms like "Mesothelioma"
  • Common criticism of these sites is that they are "content free" and just earn money through advertising
  • These guys are simply taking advantage of the fact that the URL and Search boxes are used interchangeably
• Secondary Market - Auction/Sales 8-15X annual PPC revenue, example 150K names sold for $164MM
• Expired domains, 22K names dropped per day, called Drop Catching
• Blind Registration (Performance Risks)
  • RokenIsDodelijk.com - 3 uniques/month - US$.05
• "Domain Tasting" - use (or "abuse") of Add Grace Period
  • Large number of sources that people use to search for strings, search engine and dictionary algorithms
  • It does cost quite a bit to do this, For you need to park a lot of $ with registry and pay registration costs, etc.

[edit] Josh Meyers, Yahoo

• Partners include CNN and ESPN, etc.
• Yahoo publisher mission is to build the most valuable and trusted distribution network
• Search / Paid Search / Yahoo Shopping / Yahoo! Answers
• Yahoo is intersted in balancing the interests of all of the parties involved
• As the largest trafficked site on the web, we are very interested in users
• Domain match product
  • Must match to content and paid listing
  • Filtering - about balance - Yahoo is concerned about names we don't want our brand associated with
    • Concerned about TM violations
  • Reporting - important for our publisher to see the conversions, etc.
• In closing, we are focused on consumers, advertisers and publishers and are equally focused on each of those groups to maximize value

[edit] Roberto Gaetano, ALAC

• Interested in Registrants and end users
• Both are benefiting by registrars flexibility and capability and competition
• But there are times where too much creativity is creating some problems
• For example in the use of the Grace Period, the effect on registrants creates confusion / difficulty knowing when a name can be re-acquired. A bad situation for registrants.
• There is no basic rules, we have a wild west situation, not a lot of clarity
• From the user point of view i don't that there is a distinction between sites with or without service, but we want to find what we want with the minimum number of hops
• The question is not whether the sites are filled with Ads, but whether they will help me get to where I want
• I don't think there is interest in a domain name that is registered only for a few days

[edit] Sarah Deutsch, Verizon Communications

• The dark side of monetization - the exploitation of trademarks
• Domain Name Parking
• Typo-Squatting and Domain Name Tasting
• Many in the Domain name parking chain have already been sued
• Dotster has actively exploited many famous names, including 12 variations of Verizon
• eNom had 144 variations of our Verizon trademark, Club Drop
  • eNom says that the names were registered and subsequently dropped by their customers and picked up by them. eNom gave them the choice of purchasing the names for $169 plus $29 registration fee or they'll drop them
  • Had good discussion here with Paul Stahura ad feel confident that we'll straighten this out
• Until now, Registrars have done a good job keeping themselves out of liability, but that is changing and there is risk now.
• Registar must have a reasonable policy - hard to imagine that some of the practices are reasonable
• Paul Stahura wishes to correct the facts...Moderator intervenes and allows Sarah to finish first
• She then continues by citing the RAA, she feels that at a minimum we need a PDP to disallow RARs from participating in the speculation and typo-squatting.

---

• Paul Stahura
• Your letter mentions 2 names. We sometimes have to "seize" names, if we approach the TM holder we may be accused of holding them up. if we delete them, the problem continues. We quoted you $169 and $29 which is RGP cost and registration cost
• Your overzealous atty's looked at the dropping list and found 144 names. We just publish that list. Out of the 145, 1 name was registered, and not by eNom
• I do agree with her last statement that we can settle this misunderstanding

---

• Sarah - quick point - we did this search in April
• Paul - that's not what your lawyer said, it was June 6th
• Your letter says someone...

[edit] Panelist & Floor Questions

• Pat Kane question for John about the $ parked at the registry
• John Berryhill I understand that VeriSign requires a large deposit
• Pat Kane - many use a line of credit and the 5 day float doesn't do for VeriSign what you might think
• Chuck Gomes - there hasn't been policy developed with regard to warehousing in RAA
• Max from CORE with a question of cost for VeriSign - is it a loss or a gain?
  • Pat Kane - there are infrastructure costs, i can't answer your specific question, the analysis hasn't been done yet
• Jonathan Robinson from NetNames, question about the incidence of TM names
  • Josh Meyers we don't have a significant revenue tied up in names with TM associations
    • you can use the search suggestion tool on our site to see on our network how many people search that phrase. There is a substantial legitimate business in place without TM names. Our contracts prohibit TM abuse. Problem is huge preponderance of names in various countries. We make every attempt to keep TMs out of the game. We could use as much help as we can get from our partners to spot TM violations
  • John Berryhill the primary users of PPC are TM holders - one can use the typo-squatters can use as a way to re-direct traffic back to the TM owner
  • Sarah - we want customers who type in anything Verizon related to come to us DIRECTLY; we don't want to pay twice
• Bruce Tonkin we try to build in filters, but it is a hard thing to do. Verizon might be easier, but Apple for example, isn't.
• Jothan Frakes reactively, clearly there is a concerted effort on behalf of registrars to work with the intellectual property interests, and a central registry of TM names might be helpful to the industry towards proactive measures
• Sabine Dolderer from DENIC, we don't have an Add Grace Period, why do we need the 5 day Add Grace Period? Why not abolish it and focus more on the real needs?
• Nigel Roberts, registry manager for .gg and .je. 5 day grace period clearly has a purpose, but the tasting is an abuse. Is it theft?
• Tim Ruiz, yes it is an abuse
• John Berryhill VeriSign isn't going to say one way or another, they don't even know if it's making money
• Sarah - the purpose of the Add Grace is different than how it is being abused, it is extremely unpalatable situation
• Tim Ruiz Registry has an OPTION as to whether or not to credit the registation
• Roberto Gaetano - policy making hasn't disappeared, we can come up with a different policy
• John Nevett - new agreement shows that the registry can take action if they want

[edit] Jothan Frakes

(Numbers provided by VeriSign)

• From May 1-31st 2006
• 616 registrars of which 502 took advantage of Add Grace
• 322 had a delete rate of greater than 5%
• 87 registrars deleted a domain name more than once
• 5.2 million gross adds
• 30 MM unique names were added
• 38.6K names were registered 6 times or more (domain name kiting has been a term coined to the entire practice of add grace deletion behaviour. The practice where names are added and deleted over and over like this 38.6k are really 'kiting' or getting it free.)
• 17 had a delete rate of less than 1.3 %
• 29 had delete rate > 97%
• 18 RARs account for 98.1% of activity

[edit] Tim Ruiz

• GoDaddy feels that Add Grace is a problem
• customer confusion and confidence affected
• written complaints from customers - He reads two letters which basically point to customers seeing Domain Tasting and thinking that GoDaddy or someone is abusing the system. What, why, how and what can we do? We're seeing this on the rise, tens of these on a weekly basis and this will continue to grow
• long term concern is customer confidence erosion
• change in policy would be a waste of time and resources, when there are tools to fix today

[edit] Rob Hall

• Want to defend ICANN Staff because it isn't something they made up, it's been in existance for 10 years
• Fact vs. Fiction
• this is not about getting a free domain
• people using sophisticated methods to find names that are worth more than $6 / year
• Various registrars should be different, that's the very purpose of competition
• Traditional RARs like NSI, Tucows and GoDaddy, vs. Drop catchers like Pool, SnapNames and eNom
• there are 18 Registrants doing this
• Problematic Solutions
  • Registries want their cut
    • some call it technical issue
    • some call it a policy issue
    • point fingers are irrelevant examples
    • whatever works
  • clearly market demand
  • price fixing the wholesale price is not the answer
  • individual motivations
• want to be clear about what's happening in the different periods
• concerned about applying a knee-jerk reaction to a policy that has been in place for a long time
• Scare tactics aren't appropriate or conducive to finding a solution
• inflaming when what we need to do is educate
• education is most important

[edit] David Maher

• let me talk about PIR experience
• We have seen some RARs register millions of names with a deletion rate of over 99%
• there is an issue for 2 reasons
  • technical burden / Afilias (our back end provider) doing a great job
  • .org serves primarily the non-commercial users; many of whom are not sophisticated. Some names that are popular or test well are picked up and used for anti-social purposes.
• educational program, users of .org need more information about what happens when a name deletes inadvertently or not
• proposal that they brought to ICANN which is in the .net agreement gives Registries the right to charge as a solution

---

• Question from Steve Crocker - Chair of security / stability advisory committee / non-trivial amount of unreimbursed costs to registries. If true, there is a possible security / stability issue. When we focused on it, registries said "this isn't really a problem, we're ok"
• Tim Ruiz - this (domain tasting) activity won't abate by itself, we need to take action. We're not trying to create FUD, but reporting what our customers are saying
• Wendy Seltzer from ALAC there's a "naiive economist's" perspective that if money is changing hands and flowing, all is ok. That's not the whole picture. Public has a stake in this, individuals and smaller entrepreneurs are adversely affected. Add-grace sampling doesn't add to the user experience.

[edit] Jonathan Nevett

• all domain names are subject to registration
• educational campaign important and encourage them to renew (especially if with NSI)
• We send 4 e-mails prior to expiration, etc.
• After expiration, we send 2 more e-mails, then they have 30 more days to renew their registration
• RARs are not required to do this
• Some RARs now give customers an oppty to have their name auctioned off after expiration
• Some RARs offer "enhanced" service, where they renew the name for them and charge a higher amount if purchased later. domain name monetized in the mean time
• other names will go through a Pending Delete Period
• there is a difference between expiration and deletion / taking down the site is an additional method of warning the user that they're registration might expire

[edit] Pat Kane

• Every day at 2PM we delete names / drop catching (at VeriSign, we call it Add Storming)
• 60 MM add commands generally per day / most between 1:30 and 3:30 in the afternoon
• we've seen 564 different creds going after the names (of 651)
• 2,276 attempts per deleting registration
• 21K - 42K names per day deleted
• typically almost everything available is reregistered

[edit] Paul Stahura

• The Long Tail / a new type of domain name
• description of domain value graph
• differences between Class I and Class II names
• Revenue Shares
  • Registry 55%
  • ICANN 5%
  • Registrar 40%
• LongTail Domain Proposal <- Paul's slides