Forbes cites MIT paper’s $8 billion #DNS and #domain ecosystem article

A synopsis by Forbes of a MIT paper about the “Changing markets for Domain Names” throws together DNS support systems, domain names, and domainers; the mashed up version of these 50+ pages turns facts and figures into an amalgam of some not-so-great outtakes about the domain industry’s aftermarket.

While the MIT paper focuses on the exact infrastructure of the domain ecosystem, that includes the fundamentals of DNS along with the evolution of domain names as brand representations that can be developed, monetized, and exchanged as property, the Forbes article seems to obsess with DNS governance policies and—surprisingly—points the finger of domain price deregulation to Registrars.

GoDaddy and Network Solutions seem to become scapegoats in the grand scheme of things, and the Forbes angle makes them appear as able to increase domain prices arbitrarily, to $100 dollars a year if they so decide:

“Few consumers realize it, but price controls have been in place to enable easy and low-cost switching from registry to another (from .com to .org for example), similar to number portability. However companies like GoDaddy and Network Solutions are not price regulated and can easily raise prices for domain names without losing customers. If a business must have a certain domain name, they will likely purchase it and/or renew it whether the price is $10 or $100.”

Of course, it’s the other way around: Registries, such as Verisign, under exclusive, lucrative contracts, are given control of the base pricing for popular domain extensions, such as .com, .net, and .org. The Registrars, can only tack a reasonable amount to that big chunk that the Registry keeps, which they often keep at a minimum for the purpose of competitiveness; there are, after all, almost 2,500 ICANN accredited Registrars currently.

On the other hand, the MIT paper’s byline being “Technical, Economic, and Policy Challenges,” presents a full picture of how the domain industry is practically agnostic of its DNA; the processes to register, transfer, or delete domains—or, dispute ownership thereof—is a quarter of a century old and quite mature in its functions and serving purpose.

Perhaps Forbes should take a look at its own content for more accurate references, such as articles published by co-founder, Jeff Gabriel, on the value of domain names and the contribution of the secondary domain market and domain investors to the global business ecosystem.

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2 Responses to “Forbes cites MIT paper’s $8 billion #DNS and #domain ecosystem article”
  1. Nevins Mctwisp says:

    Hi and thank you for sharing. I haven’t read the full MIT report yet, but real quick, to touch on what you shared:

    1) GoDaddy and NetSol/ folks are NOT price regulated on what they charge their customer. Yes, Verisign IS price regulated on the wholesale price of .com, but I don’t believe registrars are obligated to offer that registration price to customers. NetSol/ for instance give you Stop! Your SPECIAL renewal offer of $38 whenever you request an AUTH code to transfer out. And GoDaddy well you have to pay DDC club membership to get close to the wholesale regulated price. So the article is not wrong about unknowing registrants being price gouged.

    2) The Jeff Gabriel Forbes article is a Forbes Council Post (Membership Fee base) which, let’s be real, is essentially a paid advertisement by an industry related company/expert similar to NamesCon charging to host key note speakers. I don’t imagine MIT allows for advertisements to be cited for a “more accurate reference.”

    3) GoDaddy playing favorites on who can renew a expired domain after a bid has been placed needs to be reviewed. See the thread on nP for more info.

  2. DomainGang says:

    Nevins Mctwisp – The MIT report differs in its overall sentiment from the Forbes summary, as outlined. To answer your points:

    1. Price regulation is established for the Registry at multi-year intervals. But current contracts allow Verisign to increase pricing annually vs. only during a portion of its contractual years. On the other hand, competition among Registrars keeps pricing at check. The Forbes article makes it sound as if anything goes and that businesses are held hostage to domain Registrars. We are talking about claims of 10x increases that are simply not true.

    2. Jeff Gabriel has made several other article contributions on Forbes and he’s voicing the domain industry’s structures and sentiment way more accurately.

    3. The Forbes article touches things on the surface only; good luck finding such depth on the 45 vs 46 day debacle there! 😀

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