June 07, 2005

Ex-Ex-Ex Domain And The Economics Of Domain Profit

Let me clarify my focus on the subject of the "Ex-Ex-Ex Domain", laying out again how I'm analyzing it.

The .XXX domain is an instance of ratings/labelling system, and so intrinsically has all the civil-liberties issues which are generic to that class of systems: Often not truly voluntary no matter what the PR, potentially a marginalization tool, useful more for the industry than the supposed users, and so on. But, considered as a ratings/labelling system, .XXX is a particular crude and bad one. That's not just my activist/partisan opinion, it's the opinion of professional censors, who are saying it's not technically helpful in censorship ("It won't make software filters any more effective"). From my perspective, it's a standard scheme (I call it "The Scarlet Letter"). The issues surrounding that sort of proposal are well-settled, and unlikely to change the slightest whenever somebody comes up with it again (as they will ...). The general ratings/labelling battle has been fought over far more complex efforts (keywords: "PICS", "RSACi", "ICRA", etc.)

So, who wants it? Not, what could it be turned into, but who wants it? Follow the money!.

The first thing that happens when any new domain registrations begin, is the landrush of speculators. People are going to be trying to register everything from sex.xxx to whitehouse.xxx to benedictxvi.xxx, just on the off chance that they can resell it to someone else. Note registries make no profit whatsoever on domain resales - they make their profit on initial sales and renewals.

From a registrar's point of view, domain-name speculators are great customers. They tend to do bulk orders. They're sophisticated, so they don't require a lot of hand-holding and technical support. They make good clients for various after-market services to manage their many speculative domains.

And domain renewals are almost pure profit. So a bunch of speculators sitting on what they think might be very profitable names, is a flock of golden geese for the farming.

And golden they are, because instead of the approximately one dollar or two dollar chump-change net profit margin for standard domains, it seems we're talking around $50 profit - FOR EVERY NAME!

"We're In The Money" ...

By Seth Finkelstein | posted in censorware | on June 07, 2005 11:59 PM (Infothought permalink)
Seth Finkelstein's Infothought blog (Wikipedia, Google, censorware, and an inside view of net-politics) - Syndicate site (subscribe, RSS)

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Hey, I know I would buy benedictxvi.xxx.

Posted by: anonymous at June 8, 2005 04:54 PM