Re: [gnso-vi-feb10] RE: Economists

[Eric Brunner-Williams <ebw@xxxxxxxxxxxxxxxxxxxx>]

Jeff E,

You asked if there were concerns about your plan, the former Jon
Nevett plan, to allow a registry operator to self-sale the first
100,000 names.

sex.com went for $14m, fund.com went for pennies under $10m, porn.com
went for $9.5m, {business and diamonds}.com went for $7.5 each, and
beer.com went for $7m. AsSeenOnTV.com went for pennies over $5m, and
{korea, casino and seo}.com went for $5m each.

The price points for each of these for the random standard 2010 (or
whenever) application going through sunrise and landrush will be lower
than for .com, but significantly higher than the price point for any
remaining strings after the first 100k have been harvested by the
business entity ICANN selects as the registry operator and which has
this one-time value extraction permit.

Salop and Wright did not address this, though for this portion of any
domain name inventory, the registry sets the price, and it is above
six dollars, it does not take a price, one at or below six dollars.
Using the .com data, with some variation in value due to the historic
recession beginning in December, 2007, between 50 and 100 domains have
had values in excess of $1m. So that's a cool $200m on the first 50
names, times whatever the discount is for .foo, relative to .com.

The value for the same names in the .de and co.uk inventories suggests
that the discount is significantly closer to 1.0 than to 0.1.

The curve above the $1m price point continues below it.

Stephane Van Gelder can correct me, he blogs about the high value
domain name market. And he's just commented in the thread.

Recalling that the excuse for this is (a) ICANN needs to create this
registry for some purpose, and (b) this unfortunate registry needs
ICANN's help to get started, until it too can set, rather than take,
prices, how much is 100,000 domains in time?

We're selling about 1k domains per month in .cat to Catalans, starting
with a $2,000 marketing budget. The unfortunate registry which needs
ICANN's help must have similar, or even slower, uptake. So ignoring
the sunrise and landrush phase, which might sell half of the
privilege, the unfortunate registry will have no registrars for four
years, more or less. That is, not before 2015.

So, when we say 10k or 100k, as an exception, and without price caps,
and for the standard (no significant restrictions other than the
UDRP), we are talking either about a $100m gift to the applicant,
times the discount rate relative to .com, or the number of years the
registry operator is intentionally without registrars, or both.

Eric