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If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

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Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#41

Post by ethbro »

thedevil wrote: post #39

An idea I've been tossing around: What if domains cost $100 if more than one person wants it? The idea here is to squeeze the squatters with 000s of domains. Whenever I want a domain, most of the ones I want are taken. Not by people who are making use of it, but by people who are squatting in hopes of extorting anyone who would actually use the domain to produce value. I'd actually be happy if Verisign or any other p…

You're talking about game theory as it relates to pricing / auction games. This is a really well-studied topic, and indeed there are much more efficient ways to match value to demand.

F.ex. https://en.m.wikipedia.org/wiki/Vickrey_auction

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#42

Post by mikeash »

curiousgal wrote: post #22

Why do we even need domain names? I mean unless it's a brand, we rarely type in a domain name, it's usually bookmarked or linked.

What does the bookmark or link point to, if not a domain name? If it points to an IP address instead, then changing servers would break all links and bookmarks.

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#43

Post by btown »

hk__2 wrote: post #8
ajosh wrote: post #6

I don't claim to know what the fair price for the .com registry. I will say this though the hosting isn't free. There are millions of requests per second across all networks from all across the world. They must respond with low latency. The major registries are nearly always under DDoS attack. There is a reason verisign has some of the best DDoS protection. All the data centers across the world, the network connectiv…

> All the data centers across the world, the network connectivity, the DDoS hardware, servers, custom software and staff to run it all must be expensive. We’re just talking about the DNS part here; not the hosting. Maintaining a bunch of DNS servers doesn’t cost $9 per domain.

Since Verisign is public, we have a lot of visibility into their profitability.

http://files.shareholder.com/downloads/VRSN/2260644339x0x888...

From page 28, no more than 38% of revenues could possibly be used to support their registry systems and obligations (this number includes costs of revenues, administrative expenses, and interest expense). The remainder, 62%, is used for expansion and profit: 9% sales and marketing ($90m), 6% R&D ($63m), the remainder to income tax and shareholders. And obviously sales and R&D take up some of administrative expenses and usage of debt raised as well.

That's a pretty sizeable margin for a non-differentiated product. If they didn't have the contract for .com and .net, there are many other players who could jump in: per page 6, "there are over 840 other operational gTLD registries" that do not use Verisign's services.

Don't bet on them losing the contract, though, unless you want to bet against Berkshire Hathaway - which recently upped its investment in Verisign despite uncertainty about ICANN's future. For better or for worse, a lot of smart people think Verisign's current business model is here to stay.

http://www.nasdaq.com/article/why-buffett-broke-his-rule-and...

https://www.theguardian.com/technology/2016/mar/14/icann-int...

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#44

Post by icebraining »

curiousgal wrote: post #22

Why do we even need domain names? I mean unless it's a brand, we rarely type in a domain name, it's usually bookmarked or linked.

Because if you used bare IP addresses

1) a site or email service couldn't change hosting providers (and hence IP) without breaking all links and bookmarks

2) you couldn't have more than one site or email namespace hosted on the same machine, since the server wouldn't be able to distinguish them

Having a layer of indirection gives you much more flexibility.

And if you don't really care about the name, you can a domain for less than $2/y on one of the new TLDs.

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#45

Post by wmf »

hk__2 wrote: post #8
ajosh wrote: post #6

I don't claim to know what the fair price for the .com registry. I will say this though the hosting isn't free. There are millions of requests per second across all networks from all across the world. They must respond with low latency. The major registries are nearly always under DDoS attack. There is a reason verisign has some of the best DDoS protection. All the data centers across the world, the network connectiv…

> All the data centers across the world, the network connectivity, the DDoS hardware, servers, custom software and staff to run it all must be expensive. We’re just talking about the DNS part here; not the hosting. Maintaining a bunch of DNS servers doesn’t cost $9 per domain.

Somebody put in a proposal to run the .org registry at cost for $2/domain/year a while back, but it was rejected because their infrastructure was only something like triple-redundant Postgres instead of quintuple-redundant Oracle. This is known as a "beauty contest"; ICANN picks whoever has the most over-engineered solution and when you cross that with "cost plus" thinking leftover from the military-industrial complex you end up paying $9.

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#46

Post by thedevil »

ethbro wrote: post #41
thedevil wrote: post #39

An idea I've been tossing around: What if domains cost $100 if more than one person wants it? The idea here is to squeeze the squatters with 000s of domains. Whenever I want a domain, most of the ones I want are taken. Not by people who are making use of it, but by people who are squatting in hopes of extorting anyone who would actually use the domain to produce value. I'd actually be happy if Verisign or any other p…

You're talking about game theory as it relates to pricing / auction games. This is a really well-studied topic, and indeed there are much more efficient ways to match value to demand. F.ex. https://en.m.wikipedia.org/wiki/Vickrey_auction

Somehow, I had never even heard of auction theory. Thanks!

This has to be the only comments section on the internet where I actually get smarter by participating. :)

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#47

Post by codingdave »

thedevil wrote: post #39

An idea I've been tossing around: What if domains cost $100 if more than one person wants it? The idea here is to squeeze the squatters with 000s of domains. Whenever I want a domain, most of the ones I want are taken. Not by people who are making use of it, but by people who are squatting in hopes of extorting anyone who would actually use the domain to produce value. I'd actually be happy if Verisign or any other p…

How would you envision that working? If people started asking for a domain you own, you would get billed more because of it? Or would you have to register your desire for a name and give people a chance to say, 'no, i want that, too!'

Either way sounds bad for a legit company just trying to set up their own site, as it gives competitors an opportunity to cost them some money.

If you had something else is mind, please share more...

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#48

Post by uudecode »

wmf wrote: post #45
hk__2 wrote: post #8

Earlier quoted context omitted.

> All the data centers across the world, the network connectivity, the DDoS hardware, servers, custom software and staff to run it all must be expensive. We’re just talking about the DNS part here; not the hosting. Maintaining a bunch of DNS servers doesn’t cost $9 per domain.

Somebody put in a proposal to run the .org registry at cost for $2/domain/year a while back, but it was rejected because their infrastructure was only something like triple-redundant Postgres instead of quintuple-redundant Oracle. This is known as a "beauty contest"; ICANN picks whoever has the most over-engineered solution and when you cross that with "cost plus" thinking leftover from the military-industrial comple…

What do you think of SRS?

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#49

Post by Matt3o12_ »

thedevil wrote: post #39

An idea I've been tossing around: What if domains cost $100 if more than one person wants it? The idea here is to squeeze the squatters with 000s of domains. Whenever I want a domain, most of the ones I want are taken. Not by people who are making use of it, but by people who are squatting in hopes of extorting anyone who would actually use the domain to produce value. I'd actually be happy if Verisign or any other p…

I have doubts how this could work. Let's say, I register the domain name A for my personal use. So far, nobody else wanted it. One day I get an email from somebody claiming to want the domain as well. He makes me an offer: he would step down if I paid him $30.

I'm neither willing to pay $30, nor $100 dollars for my personal domain. $10/year is already enough, so I'd probably have to decline and risk losing my domain (because he could simply buy it for $100). I'm sure there are many scenarios where someone could even buy your domain (assuming you're not willing to pay $100), and damage your reputation (and since it is the Internet, sueing them can be impossible if he is outside of the us and getting back the domain name through a court would be way more expensive then $100).

Now, another scenario is when a domain broker bought domain B before company X does. The domain broker paid the usual price because nobody wanted it at that time. Now, company X wants to buy that domain and offers the register $100 for it. The domain broker is asked if they still want it for $100 by the domain register. They would agree knowing that they can sell the domains for a lot more than $100 to company X.

I don't see how this system could help anybody but maybe I just didn't understand your proposal right.

Re: If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

#50

Post by wdr1 »

thedevil wrote: post #39

An idea I've been tossing around: What if domains cost $100 if more than one person wants it? The idea here is to squeeze the squatters with 000s of domains. Whenever I want a domain, most of the ones I want are taken. Not by people who are making use of it, but by people who are squatting in hopes of extorting anyone who would actually use the domain to produce value. I'd actually be happy if Verisign or any other p…

If I remember correctly, domains used to cost around $78 to register.

When the price dropped dramatically, there was discussion on Slashdot about the effects. Most thought it was great ("hey, I, a poor college student, can get a domain now!"), but there was speculation it would lead to more domain parking.

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