Single Letter Domain Auctions
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October 29th, 2007 by
Jay Westerdal
One of the questions I am often asked is how does someone register a single letter domain name. They are not owned by anyone, those domains are mostly registered to ICANN as “reserved”. The predecessor to ICANN was one man, Jon Postel. He reserved them for future growth. The idea was that if a zonefile got too big, it could be broken into chunks. Domains would look like this… www.domaintools.d.com. ICANN reserves the right to use these single character domain names. However, it is very clear at this point they will never need to be used the way they were intended. So the question is, why is ICANN still reserving these domains?
Jon Postel made 6 exceptions for the single letter domain names. He allowed trademark holders to claim a few of the single character domain names. Qwest Communications (NYSE: Q) got Q.com, X Bank got X.com (now PayPal/eBay), Nissan’s “Z Car” got Z.com, Inet Corp. got I.net (not currently resolving), The Open Group got x.org (now X.Org
foundation).
I know several companies that have personally told me they would pay over a million dollars for the a single letter domain name. They are not all big companies that everyone knows, they are silent stealth companies that know the value of generic domain names. There is a huge demand for these domains and there is such a limited supply. I would like to propose an auction for these domains. The money raised goes towards improving and running ICANN, so the idea is to raise as much as possible from the auction. I personally think the best way to raise the most is to hold one auction slot a month. DomainTools would auction off the ability for the winner of a month auction slot to pick any letter from the available pool they want. We would auction off one letter a month from each TLD.
Every month there would be one less letter to pick from and the press about the auctions would continue to grow as we approached the last letter. The companies that secure a spot to pick first would pay a premium for it. And the companies that pick last would be fighting not to be left out. The guys in the middle might get the best deal, but would have to choose their letter from what is left.
The DomainTools auction system is very flexible and allows for bidders around the world to bid on domain names. We would want to insure that everyone has the ability to bid, but to keep shill bids out, a pre-registration would be required for all bidders. The bidders would be able to watch a live feed of the auction process and see the other bids coming in as they happen, like we have done for our previous auction where we sold over $3 Million dollars in domains in one day. I would expect the first letter to be sold for 2 Million dollars.
We will be running an auction like this very soon and it should prove the model. The winner gets the pick from any name available in the auction. We have seen that there are a limited number of high ticket bidders. So if we get multiple high caliber bidders and multiple high caliber domains it should set the market correctly. We find that domains often go cheaper at auction because not all the right bidders are in the room. This process is one way to offset that lack of bidders. The delay in not selling them all in one sitting also has the effect of getting more bidders in the room as press spreads of the event each month.
Posted in DomainTools Auction |
48 Comments »
I love investigating Domain Spying! I saw a case last night, and I think I need to publicly report what I am seeing so people know what is going on. I see these cases all week long. I am going to blank out any sensitive data from his email because he still wants to buy this domain and most likely will get it if he waits out the Domain Taster.
ICANN has a stupid policy that allows gTLD registries to opt-out of showing thick whois information. DotTel tried to use this policy because UK privacy law doesn’t allow whois. Or that is at least what DotTel is telling us. The US Government denied the proposal and I have to say I agree with them. I love the US Veto power in this case! I think whois should be open and transparent. Call me biased, but I have seen more good things come out of the open whois than bad things. By turning off whois, it would allow criminals to operate more freely in the dark. My mother is in property management and it is scientifically proven that if you keep lights on all night long in a dark parking lot it wards off crime. If whois records and domain ownership goes into the dark, more bad will happen than we are already seeing. While I generally don’t like the US Government using the Veto power, I think it was a good call in this case.
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