The market for resold domains continued to trend higher with a series of spectacular deals this month. Meanwhile, prices for first-time domain registrations can't get much lower, with pricing unchanged at all major providers this month.
The sales of website.com and property.com for $750,000 apiece set the pace in the resale market. The mid-July sale of website.com was the highest sale price this year, according to auctioneer Sedo.com, topping the $700,000 sale of Local.com in March. The buyer, Hub Services Ltd., operates DotEasy, a free hosting service in British Columbia. That price was matched early this month when New Jersey commercial real estate professional Ted Kraus sold property.com for $750,000 in a private sale, with industry veteran Rick Schwartz reported to be the buyer.
As in July, pricing for first-time domain sales remained stable, with no significant price changes by major providers.
EurID, the operator of the new .eu top-level domain (TLD), says registrars won't be allowed to sell .eu domains through resellers. In a statement on its web site, EurID says its agreement with the European Commission prohibits .eu sales by parties that haven't been approved by EurID. "This means that the offering of services as a 'reseller' ... is completely excluded," says the statement. While no firm date has been set, the launch of .eu domain sales is expected to begin in early 2006. Domain industry insiders say similar reseller bans are being considered for other upcoming TLDs, including the .xxx and .travel extensions.
Resellers are an important sales channel for many domain name registrars, who provide back-end management of the domains sold by partners. The reseller model is used by thousands of web hosting companies, allowing them to seamlessly sell domain names alongside their core hosting and e-mail offerings. Some registrars specialize in the reseller market, providing private-label domain management sites, which can be branded with the resellers' logo and marketing. One of the largest reseller networks is operated by eNom, which is among the registrars approved by EurID to sell .eu domains.
The operator of the .name registry is offering a "free trial" on its domains, and appears to be encouraging registrars to mass-register .name URLs for existing customers. The Global Name Registry, which oversees .name, is limiting the freebie to a 60-day trial period, after which the registrant must pay for the name or return it to the registry. The promotion refines an Afilias' promotion from last year offering introductory free pricing on .info domains, but places a shorter time frame (60 days versus one year) before the domain fees must be paid. "All Free Trial Names are registered in bulk, i.e. an ISP/Registrar can allocate a free trial name to each of its customers at no charge," the offer notes. eNom affiliate Sipence used the Afilias offer last year as an opportunity to bulk register 1 million .info domains for customers who owned the same name in .com or .net.
The .name promotion was the major pricing news in a month in which prices for a one-year .com name held steady across our list of domain sellers.
ICANN and VeriSign will consider changes to the new .net registry agreement in response to a mass protest by major domain name registrars, who said the deal represented a "breach of trust" between ICANN and the registrar community. In response to a joint protest by more than 30 registrars at a Luxembourg meeting, ICANN chairman Vint Cerf announced today that VeriSign and ICANN will re-examine a provision in the agreement that lifts restrictions on the price VeriSign can charge registrars for each .net domain they sell.
"In light of the comments and the concerns from the community, VeriSign is willing to discuss reworking the fee cap provision," wrote Tim Ruiz of Go Daddy in an update to registrars. With the announcement, ICANN and VeriSign have committed to further discussions, with no guarantee of changes at this time. But the reopening of negotiations was seen as a step forward by registrars, who were concerned that changes in the fee structure in the .net agreement could set a precedent for the renewal of the .com registry, also maintained by VeriSign. But the registrars' primary grievance was that the lifting of the price cap was negotiated privately, and never mentioned in published drafts of the agreement.
ICANN is lifting restrictions on VeriSign's pricing of .net domains after Jan. 1, 2007, a move that may signal ICANN's intent to get out of the business of regulating domain name pricing. ICANN has historically capped registry fees at either $6 or $4.25 per domain, depending on the top-level domain extension (TLD). The new contract reduces the current .net price cap from $6 to $4.25 through Dec. 31, 2006, but then lifts it altogether. The awarding of the .net registry to VeriSign has already prompted controversy and criticism from competitors.
VeriSign's Tom Galvin noted that the new contract (PDF) gives the company the flexibility to raise prices to invest in its infrastructure, but said VeriSign "will take a prudent approach to any adjustment in .net pricing." VeriSign must give six months' notice of any price change, providing an opportunity for existing domain name owners to lock in existing prices with a multi-year renewal.
Hosting companies have been slashing domain prices in a bid to acquire hosting customers, effectively commoditizing first-time domain registrations. The discounts on new domains have persisted even as resale prices for existing domain names have soared, a disconnect that has encouraged speculative buying of previously unregistered names.
Is Yahoo selling domains for $9.95 or $4.98? That may depend on how and when you navigate to its domain sales page, as Yahoo offers periodic promotions to build interest in its web hosting offerings. On Tuesday, the yahoo.com home page featured domains for $4.98, while ads appearing on Google.com for Yahoo domains were also offering the $4.98 rate. Meanwhile, the smallbusiness.yahoo.com page was listing .com domains for $9.95 a year.
"Yahoo's standard domain price is $9.95, which is offered on our web site and channel wide 24x7," said Yahoo spokesperson Kelley Podboy. "From time to time, we use promotional pricing (e.g. $4.98) to build awareness of our services and reach new business customers in promotional channels, like Yahoo.com, where we run one-day ads several times a month. Due to the limited nature of this advertising, we hope that visitors respond right away. If they don't, they may pay our standard $9.95 price."
Yahoo isn't the only provider offering targeted discounts, as 1&1 Internet features regional pricing differences on .com domains (which are $5.99 on 1&1's U.S. site and 8.89 pounds, or $16.21, at its UK site)