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Transparency in the Domain Industry
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November 9th, 2007 by 
Jay Westerdal
For as long as I have been in this industry, I have been trying to promote transparency and market efficiencies. That is one of the reasons I started blogging. A lot of domainers choose to remain in shadows and I do not fault them for that. I take the exact opposite stance. If you have nothing to hide, then transparency is a good thing. The general public scorns domainers because they have built empires where nothing used to exist. Most earlier domainers saw the vision that domains would become valuable and they registered them like there was no tomorrow. The more generic the better. Domainers had no problem laying money on the line to secure domains from other early registrants. For domains to reach the same prices that we see on real property we need to see transparency, market efficiency, and clear laws.
Transparency
Hiding the details or obscuring facts is not good for the industry in general. In auctions, usernames should be displayed. Ebay and Snapnames led the way with this and it created a very healthy bid environment for online auctions. When big bidders (people like Frank) are in there buying domains, they want to know they are not bidding against shill bids or people that run up bids. It is very common for a big bidder to call the auction house and ask the auctioneer for a verification on a new bidder that is bidding heavy. People wonder if the person is legit. When auction systems only disclose bidder1 vs bidder2 anonymous style bidders, there is an inherent distrust the system. Ebay has disclosed real usernames for years and I believe that is why it is the biggest auction system in the world. I am able to do my own verification checking on a user by looking at their 30 day history and how many people have filed a complaint against the user.
Who owns a domain or how many domains they own should be available somehow. Information is the key to the Internet economy. Domainers in general need to realize this and insist on it. Outsiders judge this industry as almost incestuous and rigged. Michael Arrington openly called domainers thugs and racketeers about 5 months ago on his blog. Outsiders in general don’t know what is going on when they look into our industry. Even someone like Mr. Arrington who used to be employed as a CEO inside our industry. We need to change the way outsiders perceive everything about domains and promote values that increase the integrity of the entire system for everyone. Imagine buying a house and not being able to get the history on it. Imagine doing business with someone on Ebay and not knowing if they are a first timer or a trusted power seller.
Banning an industry professional like myself from a domain forum reduces transparency in the industry. I am banned in some of the most popular forums in this industry not because of my conduct but because of tools and services that DomainTools provides. If I don’t meet openly published criteria, then that is rational, but if the reason is more intangible then I need to question the transparency of that organization and what values they operate under. I personally vow that all services which DomainTools operates will work in a transparent manner. If I am banned for operating transparently, so be it. I welcome the day when everything in this industry is open and transparent. That day will come.
Transparency also relates to portability of data. In an information economy, the information needs to be exportable and not locked in prosperity displays. I am a heavy believer in open APIs, full RSS feeds, and published standards for protocols. Let the data for a service live outside the interface. Any applications that DomainTools builds is built on APIs that everyone should have access to. So if we invent a new service, you can bet we want to make that API available for other people to put a User Interface on it. Anyone should have the ability to make a service that extend our services. If someone can do a better job then we can, then by all means let them. We will make the API that powers the infrastructure. Security is the only concern when making something open, so long as those concerns are addressed we will make APIs open. Our first product several years ago was a domain suggestion service, almost every registrar in the industry has used it and all of them implemented the user interface in a different way. The real service most companies sell is not the user interface but the underlying data service. Does Verisign have a user interface for DotCom? No. Everything is done by registrars and I believe this has made the market bigger. More people are marketing DotCom, more people are selling DotCom, and Verisign would never want to be back in 1997 when they were the only shopping cart on the Internet for it.
Market Efficiency
Let’s face it, the market is not very efficient right now. If you buy a domain and want to transfer it to your favorite registrar, you will be faced with hurtles of getting that domain out of the current registrar. You need to get the auth-code once you own a domain. If you have the auth-code it is reasonable you are the owner. Auth-codes didn’t exist 5 years ago, but yet when they did appear in the market, we did not get rid of the old checks and balances. So now that we have a system that is frankensteined together with auth-codes, registry locks, email confirmations, AND registrar denials as hurtles to transferring a domain. I would envision a secondary marketplace that allowed a person to buy a domain name, pay for the domain in escrow, receive the auth-code in escrow, instantly transfer the domain, and start using the domain. With the system we have in place, only experts can transfer domains and even then it takes calls and emails to beg for permission to transfer our own domains.
Buying and selling needs to get easier. When the market gets more liquid it will allow prices to rise. If you look at any market in the world that has inefficiency, you will see the prices are more depressed there then in places where the market is highly efficient.
In the coming months we will be releasing what we feel is a more efficient marketplace solution. We want to stress transparency and open protocols that anyone can use. With the amount of developers and domain companies that exist right now, it would be awesome if we didn’t even need to create an interface for it.
Clear Laws
The third tier to any marketplace operating efficiently are clear laws. Not a lot of large companies enter markets when the laws are not tested. We need clear direction and enforcement from ICANN and other governmental agencies on what is tolerated and what is not. The domain market right now is very much a wild west. Only passage of time will build the laws that govern the industry.
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Posted in Domain Industry |
November 9th, 2007 at 8:36 pm
Personally I cannot wait until the domain bubble bursts and laymen can purchase two character domains for less than the cost of a black-market kidney. But from your perspective, I don’t think the public knowing more about this industry would help domain parkers (an industry I abhor). If everybody knew about domain parking, nobody would be “direct navigating”, they would be using real search engines. If they came across a parked page they would close it immediately.
UPDATE BY JAY: I don’t think a bubble will burst anytime soon. Remember when the Internet bubble burst in 2001? There was no effect on domain values in the secondary market, domains continued to go up slowly and there was no decline in prices.
November 9th, 2007 at 8:44 pm
I think there is nothing wrong with this service domaintools if offering but let’s not kid ourselves Jay is kindly offering this for the benefit of the industry as he would like to suggest. It is simply a capitalist action of cashing in where their is demand for the service.
Which forums are you banned from Jay?
UPDATE BY JAY: I am banned from DomainBoardroom.com:
> “You have been banned for the following reason:
> No reason was specified.
> Date the ban will be lifted: Never”
Donna’s response:
“Jay, many members requested you be banned for your new tool. Instead of just
banning you, I put up a poll and results were for banning.”
My response:
“If people have a problem with tools we create they should take that up
with me personally. Banning me on Domain Boardroom doesn’t solve
anything. I would like to request a solution to this ban and to reinstate my
posting rights. This industry needs transparency not secrecy. How does
banning me solve anything?”
Donna has yet to reply again. Donna’s forum is sponsored by Oversee.net. So I think this reflects poorly on Oversee.net
I have also had a standing ban from Rick’s forum going back to 2004. Just to make sure I emailed rick again today and he confirmed that I am still banned and that he doesn’t want me on his forum because it “it’s a little too close to home”. Another words, Domain Roundtable is too competitive with TRAFFIC.
November 9th, 2007 at 11:57 pm
Thank you, Jay.
I keep coming here because I sense in you an honest and ethical business person who is not afraid to question the establishment and status quo.
I totally agree about transparency, especially at the auction level.
Lately, I have been shying away from the auction venue; some of the new places don’t quite feel right. I like Pool, but lately, I can find better domains by just putting on my thinking cap and regging regular domains. I really dislike Snapnames because they dump your newly purchased domain into a registrar that charges for everything, like redirects and server changes. Of course I’ll be transferring ASAP…
Also, I’m in the process of transferring 250 domains to another registrar. My head is swimming in AUTH codes (on both ends, yet) and having to do everything manually is a real pain in the wazoo.
Woo!
You can only imagine the job that has turned out to be.
I also just sold a domain; the process has taken well over a month to complete and included a broker and lots of email exchanges. The whole thing is just bewildering at times.
I do understand the rationale, though; without the checks and balances, it would be so easy for some thief to steal your property.
My domains are nothing like the top notch direct navigation generics, so maybe I have little to worry about.
Ms Domainer
November 10th, 2007 at 3:03 am
Jay, you’re not banned from forums like DNF, Namepros and Domainstate, are you?
I’m sorry to read you’ve been banned from the 2 you stated here. But…oh well, it’s their forums to do as they please.
At least Rick gave you answer.
UPDATE BY JAY: No, I am not banned on any public board. Then you would know something is up.
I feel this industry is lacking a private board that has a real charter and clear rules. Perhaps it is time to start a board.
November 10th, 2007 at 8:19 am
When I buy a domain from an auction I would like to have info not just about the other bidders, but also from the buyer, to be sure the domain is really from the person selling it.
Nuno Oliveira
CatalogDomains.com
November 10th, 2007 at 9:45 am
Jay,
With regards to Auctions as we said at the time http://gpmgroup.info/2007/08/16/domaintools-domain-name-auction-raises-the-bar/
you are miles ahead of the competition and I am really looking forward to your new offerings. With regards to transparency disappointingly Ebay seems to be going the other way hiding bidders and as a result we haven’t used them in months.
On the WHOIS tools I disagree with your thoughts and here’s why, a lot of people feel the relationship between the names they own shouldn’t be readily available in the public domain. The simple answer to avoid that publicity is to use a WHOIS Privacy service which I believe is bad for the registrant and bad for the domain industry as a whole. You should at least offer a free opt out.
On a side note isn’t there a question as to the legality as to your publishing of other companies WHOIS information?
With regards to your crawlers I think you should respect and obey the robots.txt files. If you are excluded then as a matter of respect you should remove your thumbnail caches, Saying “oh there happens to be, or once was another site on the server w/o a robots.txt” isn’t an acceptable excuse.
UPDATE BY JAY: Thanks for your kinds words on the auction platform. There are still lots of features I want in our auction system and we are incorporating those. It feels good to know we raised the bar but we are going to raise it again and again in the next few months.
On the side note: You might have found a bug in the thumbnail display logic. We have a policy of omitting thumbnails on any whois record that has robots.txt blocking us or the World. Send me a private note and I will check with engineering. It may take a week or two to check for a new robots.txt. The web is a very big place.
November 10th, 2007 at 10:41 am
One more thing: when forums ban users who tell the truth, it usually means that they (forum owners) have something to hide.
On a blog that I own (non-domain related), I censor nothing but spam. If someone calls me a name (and it has happened), I let it stand because it says more about the poster than it does about me.
(Someone named “Anonymous” posts a lot around the web
)
In just about every field, there is a sort of lock-step mentality, so it’s good to have an agitator or two around to keep things honest and interesting.
Keeps the fascists at bay.
Best,
Ms Domainer
November 10th, 2007 at 12:15 pm
Ricks said “… a little too close to home”?
LOL … Don’t complaint, the resposne was similar to the one you given me recently when I asked you to advertise one of my sites in your. If my memory does not fail, you tell me it was a competing service…
So as you see you are acting like all the ones you are pesting.
Francois
UPDATE BY JAY: Accepting what advertising we want on our site is a completely different issue. I disagree with your analogy.
November 10th, 2007 at 11:32 pm
I think you’ll have a very hard time creating transparency in terms of who is really bidding at a live auction because the reality is that people don’t want others to know what they are bidding on. That’s the nature of an auction. It’s obviously a double edge sword. The transparency of bidders makes some bidders feel comfortable that the other bids are legit, but it also makes them leery because they don’t want everyone else knowing that they are bidding. I think you’ll see more “bidding on behalf of” bidders at the auctions as this “transparency” thing gets pushed. . .
November 11th, 2007 at 8:56 am
In the interest of transparency, Oversee.net supplies the tech help for DomainBoardroom.com. They do not do any decision making. The choice to have you as a member was left up to the general membership and they voted you out. So once again, your transparency provided in mentioning that Oversee.net “sponsors” DomainBoardroom.com was correct but your implications were a bit skewed. And therein lies the problem with transparency.
UPDATE BY JAY: I talked with Ron about a board idea less then a year ago. They were very interested in Sponsoring something. He mentioned they wanted it to be open and not run like other boards. So I hope DomainSponsor considers pulling out any sponsorships deal. I would not consider your forum open.
November 11th, 2007 at 10:23 am
There is no “sponsorship deal”. You keep wanting to flavor things your way which is not a reality. You were on the board and the reason for it’s existance and Oversees assistance is spelled out clearly. They may well be planning an open board, you seem to have more info than I do on that issue. If they do, I’ll be there with bells on!
November 11th, 2007 at 7:28 pm
“This transparency thing” is important.
After running into transparency problems with expiring domain names I created a website to address the issues. Of course, I hit another transparency block wall when I solicited Verisign for access to WHOIS data.
I was trying to address one of the most egregious violations of transparency relating to domain names - registrar activities surrounding expiring domain names. I was trying to collect nightly WHOIS data for domain names expiring that night so it could be displayed after registrars had hijacked the expiring domain name.
(See http://WHOShouldBe.com/examples.php)
The point is that while I was using your paid tools during the research process I did wonder how you were able to access the WHOIS data for your WHOIS history tool. Are you an accredited registrar? If not, are you feeling transparent enough to disclose where the data comes from?
Thanks - ASN5
UPDATE BY JAY: Yes, we are an accredited registrar. However being accredited has nothing to do with access to port 43. To get a whois record just follow RFC 812.
November 12th, 2007 at 8:22 am
Jay,
Stick to your guns. If you start to doubt because of the resistence you get, re-read your blog-post above. I read the DNJournal today, and I have come to believe that they are part of the problem. Do you ever see them covering the Oversee.net and Kenyatech shenanigans? No, but you will notice ads on that site by those companies or those that own them. DNJournal is more of a a neighborhood promo paper and not a “news” paper. Please keep telling it like it is. Transparency makes many people very nervous, and you can see that many are pained just thinking about it. Though it will ultimately make this a respected industry, which it is not by any means today. Thanks for having courage!
November 14th, 2007 at 2:17 pm
Talking of transparency, I have joined NameJet and must say I dont like their system at all compared to snapnames as you dont know who the hell you are bidding against.
As Jay says, transparency is what is required.