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Domain Name Goldrush Part 6 - Snap-Back To The Future?
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Who Wins? Who Loses?
It would be hard to identify a sector in the domain name industry that generates as much heat and light as does that of expiring domains. This only serves to demonstrate how much of a need there is for a real solution to end the chaos that currently exists.
It's likely that this proposed system will be good for the Verisign registry. Making US$40 on every domain name that's deleted with a subscription in place sounds like great business, especially when you bear in mind that Verisign make only US$6 on each standard registration.
This system is also likely to benefit the average consumer, primarily because it attempts to introduce a degree of certainty and transparency into what is currently a horribly complicated system that's understood by relatively few. Under the current system, the typical consumer hasn't the slightest hope of registering a name that's considered "valuable" by any objective measure. Being put on a waiting list is a concept that customers can understand.
What I'm not sure about is whether this system really benefits registrars. Certainly in the respect that it will eliminate the hammering of the registration system during domain drops, all ICANN registrars will be positively affected. The big question, though, is how much revenue registrars and their resellers can make from this new system.
As a comparison, let's take a look at the current domain registration pricing model. ICANN registrars pay the Verisign registry $6 to register domain names. Several ICANN registrars have said, "Let's be the cheapest service out there," and have priced their registration services accordingly. As a result, they've made much less than a dollar a name in some cases. If they use the same business model to sell WLS subscriptions, we could easily see retail prices at US$45 or less. This is great for the consumer, and it's no problem for Verisign, as they're guaranteed US$40 no matter what the retail price is. But for all the ICANN registrars stuck in the middle, it means no better margin than they currently make on new registrations.
...but that's not all! Check out Lee's next instalment on the evolving expiring domains industry in Part 7: WLS Gets ICANN Approval.