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Username: RayF
Date/Time: Tue, February 5, 2002 at 8:52 PM GMT
Browser: Microsoft Internet Explorer V5.5 using Windows NT 5.0
Subject: footnote


as a footnote to this, what we have seen are additonal costs being attributed today to ICANN's "cost recovery" process.  This includes unanticipated costs with:

1)the .name registry over exclusive e-mail services
2)the .pro registry over marketing expenditures
3)the .coop registry over exclusive registry/registrar abilities 
4)Unexpected legal expenditures as a result of the the .biz lottery scheme 

Each of these examples, to me, were nothing short of an attempt by each "winning" applicant to overcome weak, per-unit pricing models.  My point with Afilias is that they probably will be able achieve positive cash flows but at the expense of some stated proof-of-concept objectives - such as the execution of a sound marketing plan. 

The ICANN process clearly placed the marketing burdon upon the first round registries/applicants.  Yet marketing budgets were not built into the per-unit pricing model (at the 90% confidence level) by these winning applicants.  Is it not reasonable that Afilias would have garnered 700,000 units today at $10 each instead of $5.75 allowing some wiggle room for sound marketing execution?  I think so.  Instead, actual cash flows are not allowing for it, imo, and certain proof-of-concept objectives are unable to be fulfilled as a direct result. 

NSI-Registrar, for example, carries a gross margin of about $15 per .info & .biz registration per year.  As of 12/31, NSI-Registrar had a combined 160,000 unit registrations in info & biz, more than any other registrar.  That's $2.5M in margin rivaling the revenues of each of the new registries (info & biz).  To my knowledge, none of the registrars are being required to perform marketing strategies - or definition - of the new TLD's.  Chosen TLD financial models - including per unit pricing - have failed or retarded certain proof-of-concept objectives (such as true competition).


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