[DNS] Secondary Market

[DNS] Secondary Market

From: Jon Lawrence <jon§jonlawrence.com>
Date: Wed, 19 Jul 2006 11:42:03 +0100

You may not like the idea of people making money from speculating on the
value of domain names.  I have to admit that I don't particularly like it
either, however I do recognise that it is a perfectly normal consequence
of having a free market.

There is a great deal of speculation within the share market, which has
all sorts of interesting and unintended consequences, however I don't hear
anyone calling for the trading of shares to be regulated so that speculation
is proscribed.  The reason for this is that the cost of that regulation
(significantly higher cost of raising capital etc) would massively outweigh
the benefit (less people getting rich with little effort etc) that removing
speculation from the market would result in.

Proscribing the trading of .au domain names may reduce the amount of speculation
in the market, however it also prevents legitimate business transactions
from occuring in an efficient manner.

Here's a real world example:

I used to work for a company that decided to create a new brand in order
to launch a service that had previously only been offered within australia,
on a global basis.  That brand was kinda long so was normally referred to
by it's four-letter acronym.  The .com version of that four letter acronym
was registered by another company.  After some negotiation, that other company
decided to sell that domain name to my company and to rebrand their service.
 For that company, the amount of money we offered greatly outweighed the
cost of rebranding.  For us, the cost of buying the domain name was greatly
outweighed by the benefit of being able to trade with the appropriate domain
name for our market.  There was no sale of any business or transfer of any
other asset, other than the domain name.  

This is exactly the sort of totally legitimate transaction that is currently
being prevented under the current rules.

Whatever you think about speculation, the current rules are not effective
in proscribing it (as you admit below), and result in totally legitimate
business transactions being hindered and/or prevented.

I'd also like to suggest that the less policies auDA has to police, the
more time & resources they will have to police them.


>-- Original Message --
>From: "Darryl (Dassa) Lynch" <dassa&#167;dhs.org>
>To: "'.au DNS Discussion List'" <dns&#167;dotau.org>
>Date: Wed, 19 Jul 2006 19:57:05 +1000
>Subject: Re: [DNS] Secondary Market
>Reply-To: ".au DNS Discussion List" <dns&#167;dotau.org>
>|> -----Original Message-----
>|> From: dns-bounces+dassa=dhs.org&#167;dotau.org 
>|> [mailto:dns-bounces+dassa=dhs.org&#167;dotau.org] On Behalf Of 
>|> Kirk Fletcher
>|> Sent: Monday, July 17, 2006 1:44 PM
>|> To: .au DNS Discussion List
>|> Subject: Re: [DNS] Secondary Market
>|> "Darryl (Dassa) Lynch" 
>|> >
>|> > Thank you.  I do believe we should discuss all these issues, we do

>|> > need to keep it civil however.
>|> Casting cannibals, communists and crazy capitalists aside 
>|> for a moment, I'd like to try to clarify some of the 
>|> positions being put forward.
>|> The facts as they are now, are that if a business or company 
>|> owns a domain name, then if the business is sold, the domain 
>|> name goes with it.  There seems to be little opposition to 
>|> this, even though, as has been pointed out, speculators can 
>|> also use this method.
>Speculators find the extra effort cumbersome and cuts into their profits
>so it
>limits their activities.
>|> At present, registrants still require a close and 
>|> substantial connection to a domain name in order to register 
>|> it...  if they are approached by someone who values the 
>|> domain more than they do, should they not be free to profit 
>|> from it?  Surely this is win-win... After all, a buyer does 
>|> not pay more than what they think an item is worth (so 
>|> they've hardly been "ripped off",) and the original owner 
>|> clearly profits from the transaction.
>Why should they be able to profit from it?  They have a license to use
>domain name, if they don't want to use it any more then they should just
>release it and allow someone who will use it to do so.  In the case of
>domain name going with the business, it is the business being sold which
>creates the profit and or should and the domain name is just a pointer
>business.  The resource of the name space is a national asset which is
>managed for everyone.
>|> It seems to me (and you can correct me if I'm wrong,) that 
>|> you don't appear to be opposed to domain trading per se - 
>|> just that you are opposed to domain speculation.  Is this a 
>|> correct assessment?
>Not really, but I'm practical and know there will always be some trading.
> I
>just believe there isn't any need to allow more trading or speculation
>it isn't really necessary.  I haven't seen any arguments to convince me
>would do the namespace any good to open up the trading.  
>|> If this is the case, then I'm curious as to why you are 
>|> opposed to speculators in particular.  Where similar assets 
>|> of variable value are available, they are a natural 
>|> side-effect - and seems as legitimate a business practice as 
>|> any other... How do you maintain that a future (possible) 
>|> registrant has a greater right to the domain name?
>|> With regards to whether or not a domain name is an asset:
>|> anything which adds value to a business is clearly an asset.
>|> Unlike software licenses (which btw, is also an asset - you 
>|> depreciate it on your tax returns,) domain names often 
>|> increase in value over time.
>People can be classified as an asset for a business but that doesn't mean
>business owns them and can trade in them, although I have to admit some
>businesses do try.
>|> In some cases, this appreciation is because of the good will 
>|> generated by the registrant's use of the domain.  In other 
>|> cases, it is simply because the registrant had the foresight 
>|> to secure the name of an up-and-coming service, product or idea.
>|> In either case, isn't the registrant entitled to profit from 
>|> the sale of the domain?  If not, how can you justify that position?
>Why should they profit from just registering the name, unless it is used
>value added by the use then they don't have any rights to the name and
>don't intend to use it they should let it go so someone else has the
>opportunity to use the name as a pointer to a new service.
>|> Your entire opposition to the concept of domain trading 
>|> seems to be that some people miss out on their desired domain name...
>|> well, that goes without saying: multiple parties want a 
>|> domain, only one entity can have it.  At least with a 
>|> secondary market, domains ultimately end up in the hands of 
>|> those that value them the most... even better: those who 
>|> relinquish the domain name get some compensation.  It seems 
>|> to me to produce more winners than the present situation.
>No, secondary markets means the names end up with those willing to pay
>most for them, not the ones who desire the names and would use them as
>|> Finally: Each domain name is unique, this is true - but they 
>|> are hardly limited in number.  To claim them as a 
>|> non-renewable resource is disingenuous.
>I've hardly claimed them as such but the truth of the matter is there are
>limited numbers of useful domain names.  The fact people can see a profit
>be made with a secondary market supports that assumption.
>Darryl (Dassa) Lynch 
>List policy, unsubscribing and archives => http://dotau.org/
Received on Wed Jul 19 2006 - 10:42:03 UTC

This archive was generated by hypermail 2.3.0 : Sat Sep 09 2017 - 22:00:08 UTC