Tuesday, September 26, 2017

Losing auctions: the next new gTLD business model

Reading that small line, in the link below, reminds me that I never signed any NDA to participate in the Famous Four Media project: what if I had published or distributed their list of strings prior to the first round of the ICANN new gTLD program to close?

You don't understand?
Here is an explanation - and again - it focuses on the number one reason why participants in the next ICANN new gTLD program should pay attention to confidentiality.

What the text says
The link I am referring to, points to this line which says: "An additional $2.4million of cash due as a result of the private auctions for .llc and .inc in which the Company withdrew its applications".

In more simple words, it means that this participants (called a "multiple registry"), earned $2.4 million by withdrawing two of its applications in the ICANN new gTLD program: this in return of participating in an auction for a third party (the winner of the auction) to become sole operator of these two extensions.

As a reminder, it cost $185,000.00 to submit one application (in fact it cost more than this but let's focus on basic figures) and in that case, by withdrawing it because of an auction, it generated $1.2 million.

Thinking fast
Let's assume that a participant to a new gTLD project gets info prior to the next round to begin: developing competing projects for the sole purpose to participate in auctions becomes highly profitable. It is risky but much faster to reach out to profitability and much more profitable than selling domain names.

Another line below in the linked document says: "H1 2016 group losses of $1.9million reduced to $0.5million group loss H1 2017". The first new gTLD launched in 2013.

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