The future of drop catches...

[Edwin]

How does an auction make it fair?

At the moment anyone can join Nominet and build a system and catch a domain or alternatively book a slot with a catcher. If you auction names, then the little guys will not be able to afford the best names and those with the large corporate backing will be able to set the prices.

The little guys in real life aren't equal. And that's "fair".

As I said in my previous post, there is a gulf as wide as the ocean between "equal" and "fair". But far too often, people confuse the two!

If the auction system comes in, then everyone has a fair chance of getting a domain name: the prices are dictated by the market, and if people can pay what that market system dictates, then they will get the domain name. That's FAIR. It's fairer than drop-catching now, because money is a simple universal barometer that doesn't demand any particular skills, technical knowledge or inside information, nor does it demand any luck.

However, the little guys don't have much money, so they're unlikely to get the best names. They're not EQUAL (in their spending power). But that's also FAIR.

Nothing remotely controversial in the above. In fact, I've done nothing more than describe the real world!

 

[WigWam]

It is "commercially fairer".

In the real world, companies with more money CAN do more. Whether it's buy larger premises, mount wider ad campaigns, develop products faster etc.

And that's commercially 100% fair, and nobody raises an eyebrow at it.

Likewise, nobody would suggest that a tiny company with 100 pounds in the bank should be allowed to buy a plot of land next to Harrods at far-far-far-far-below market rates because that's the "fair" thing to do, yet that's the strange implication every time the idea of an auction for drops is mooted.

Never lose sight of the fact that "fair" has never meant "equal", despite the many attempts of those in politics (and elsewhere) to equate the two!

In fact, an auction right-prices the drops in the sense that if it functions correctly, it should extract the "real value" of the domain name, rather than some artificially low price brought about the current low barrier to entry to drop-catching (a low barrier from which I have of course benefitted alongside many others)

maybe something of a raffle system (unlimited tickets, 1 ticket per individual / business per raffle, £xx fee if you win) would be simple, fair and wouldn't give the guys with big cash an advantage.

your views welcomed

WigWam

 

[Edwin]

One more thought: in many ways, a (hypothetical at this point) transition in the drop market from the current "wild west" free-for-all situation to an auction-based model would mean that the UK domain industry is finally growing up.

The more you inject accepted business practices into a market, the more it helps to solidify and normalise that market. And a business practice as old as commerce itself could be paraphrased as: "money buys stuff, and more money buys more stuff".

For everyone who's sitting on commercially significant domain names, the introduction of a mechanism that wrings the "real market value" out of dropping domains would be an instant and permanent boost to the value of their own portfolios, both perceived and "actual".

After all, there would be a public precedent, reaffirmed every day with every auctioned drop, which said: "decent domains are worth paying for. And plenty of people are willing to pay decent prices for decent domains."

 

[Edwin]

maybe something of a raffle system (unlimited tickets, 1 ticket per individual / business per raffle, £xx fee if you win) would be simple, fair and wouldn't give the guys with big cash an advantage.

Any system that doesn't give the guys with big cash an advantage IS NOT FAIR. Not if you're talking about business, anyway.

If Person A has 10 pounds and Person B has 10,000,000 pounds, then it is FAIR that Person B has a stronger chance in business than Person A.

At the same time, Person A is completely free to use their savvy, intelligence and imagination to stretch their 10 pounds further than it's ever been stretched before.

But it is a totally UNFAIR system that demands that things be priced at 10 pounds because that's all Person A can afford!

There is no logical reason to come up with a system that disregards the value of money itself!

Instead of "domains", substitute "land" or "gold" or "widgets" and you'll see how ridiculous it sounds...

"Let's come up with a system so that anyone has an equal chance to buy this piece of land, this bar of gold, this desirable widget REGARDLESS OF THEIR ABILITY TO PAY!" Several centuries of economists are spinning in their graves...

But then, as I said, the meaning of "fair" has been so twisted and distorted by the media, politicians, spin-doctors etc. that it's not really surprising that people have forgotten what the word even means.

 

[doodlebug]

Edwin, I'm definitely seeing why you're stocking up now.

1, while you can still reg and buy cheap enough .co.uks

2, before the market speaks for the true value of domains itself.

Now is the time to start preparing for the future of domaining and it will be a while new ball game a few years from now.

 

[WigWam]

Now is the time to start preparing for the future of domaining and it will be a while new ball game a few years from now.

or it could all go downhill from now. you never know.

what would you do if say tomorrow nominet released ".uk" domains. That would make a huge dent in the market.

or if they disallowed domain parking and cybersquatting.

or if the limited the amount of domain a individual / organisation could own to x amount :O

WigWam

 

[Edwin]

Edwin, I'm definitely seeing why you're stocking up now.

1, while you can still reg and buy cheap enough .co.uks

2, before the market speaks for the true value of domains itself.

Now is the time to start preparing for the future of domaining and it will be a while new ball game a few years from now.

Yes. We're all exploiting a huge arbitrage opportunity at the moment. We can catch something for 10, 20, 30 pounds (or for "nothing" beyond the investment in a Nominet tag and smart programming) and sell it for 3, 4, 5 figures.

That's not normal. It's very nice, but it's not the sign of a market functioning properly!

I used to participate in the .com drops a lot a few years back. But when they introduced the auctions and prices crept and then leaped up, I gave up as I didn't have the financial firepower to complete, and the arbitrage "gap" had narrowed so much.

At that time, the .co.uk market was fairly overlooked (barring the smart folks who bought into it at the very beginning, some at very considerable expense - hats off to their investment savvy). So the arbitrage opportunities were huge: you could really get GOOD dropping domains almost every day for pennies on the pound of their market value.

That's gradually become harder in the sense that fewer good domains are being chased by many more people, but the underlying gap between "drop value" and "real value" remains.

Whether things will stay like that for a month, a year, forever... who can say? All I know is that the sun's still shining brightly in .co.uk, so it's time to keep making hay!

 

[GreyWing]

or it could all go downhill from now. you never know.

what would you do if say tomorrow nominet released ".uk" domains. That would make a huge dent in the market.

or if they disallowed domain parking and cybersquatting.

or if the limited the amount of domain a individual / organisation could own to x amount :O

WigWam

If Nominet released .uk which is highly unlikely in my opinion they'd have to shut down the .co.uk and just swap everyone over because the confusion and TM law suits flying around would be endless. But I don't think they'd mess with that.

.sco and .cym concern me a little but at the end of the day why would a welsh shop really want to drop down from an extension that appeals to 60m people to one that appeals to just 1-2m? They wouldn't, so the main ones on that will be the welsh language sites, same with .sco and they'd both lose traffic leakage to .co.uk's anyway.

The only downside and possible downside to domain investment would be google reducing the credit they give to the .uk extension. It's like a extension credit rating and if .co.uk's drop then the value will drop. But as long as it is well run by those at Nominet the TM's are kept in check, all will be well as far as I can see.

The new extensions are now threat, those who had shops on Oxford street or bond street 500 years ago probably all had the same concerns as new street and roads went up around them. But ultimately if the quality of the sites on that street are safe and and well maintained as the .co.uk is, they will still be prime real estate for years to come.

Put it this way I'll be launching domainfinance.co.uk soon and it will fund the purchasing of domains names .co.uk only. With the collateral being the name itself, so that's my money where my mouth is. Seems that everyone else is doing the same in their own way, Edwin by stocking up and others doing the same.

Things are looking as good as far as can be seen.

 

[Edwin]

One way that .uk could conceivably work (aside: I doubt it will be introduced but that doesn't stop me thinking about it) is to give the .co.uk owners a commercially reasonable time (say 90 days) to claim the matching .uk domain. Then open registrations to everyone once the sunrise period is over)

This approach has been successfully taken in other cctld markets, and it protects the interests of those who created the value in .co.uk in the first place: the tens of thousands of companies that collectively have spent BILLIONS promoting their .co.uk-ending URLs...

 

[Retired_member41]

I think you have hit the nail on the head there Edwin.

Not only would that work, the take up would be huge so very profitable for Nominet with very little work needed.

Would org.uk owners be allowed to claim uk also?

 

[doodlebug]

A lot of stuff this year has told me to stop drifting in and out of domaining and get a grip and start stock piling for the future, as I have said in the another post my limit will be 500 and I am 110 now.

2010 > I am preparing my plans and in 2011 will put them into use unitl the time comes that domains establish a true price structure, I've missed many opportunites in the past and I am going miss out here aswell if I don't sort things out.

People like Edwin and now Systreg have both give me lots of hope and faith in what I can do.

I'm not bothered about affs, you can make money I know but for me Storeburst is just somewhere to put my domains to use while holding on to them.

Thanks Edwin and Kev 8)

I'm going to be quite around here for a while, while I get everything into action