As it stands now, 28% of all one- or two-letter domains that were claimed and registered during the initial registration phase were acquired by one company only, Tec-Media-Service. The company successfully registered 193 of the short domain names. Realtime.at came in second with 48 domains and Key-Systems secured 19 domains at least. Most other DENIC members, however, were not successful. Even United Domains, which belongs to United Internet AG, was only able to register three short domains, two of which I wouldn’t denote as premium domains. The newly released pure number domains, most of which are longer than two letters, were more uniformly distributed.

Why is it that most of the valuable domains ended up in the hands of a few selected domain registrars only? One answer is that those companies have been experienced in dropped domain catching, a task that requires a similar infrastructure as the registration of domains during an initial registration phase. More importantly, however, the lucky registrars knew how to play the system. Especially Tec-Media-Service had a good strategy in place: It worked together with 1API GmbH, a domain registrar located in Germany. 1API GmbH is accredited for all major gTLDs as well as the 80 largest ccTLDs (country-code top-level domains) and offering its domain registration services to other companies through its entities HEXONET GmbH (Germany) and HEXONET Services Inc. (Canada). Tec-Media-Services and 1API then cooperated with an estimated 20 to 30 DENIC accredited registrars by acquiring and pooling their domain registration queries. In order to ensure a fair domain registration process, DENIC only allowed a maximum of four domain registration queries per minute per registrar. By pooling the resources of up to 30 different registrars Tec-Media-Service and 1API have been able to indirectly send as much as 120 queries per minute. It is not known how much Tec-Media-Service paid for the other registrars’ domain registration rights, but I have already heard rumors of registration rights having changed hands at prices around €10,000. Apparently, many smaller DENIC accredited registrars thought that selling their queries would result in more cash than establishing an expensive infrastructure of their own. In retrospective, this reasoning might have been correct. The numbers make it clear that only companies with the most advanced technological and organizational solutions have had a realistic chance of successfully registering the extremely sought-after one- and two-letter .DE domain names.

Domain marketplace Sedo took a similar approach by pooling the registration queries of an unknown number of registrars. But of the 3000 domains Sedo put up for auction on its website, it could only secure between 300 and 600. Most of those have been number domains of lower quality. Domains Sedo auctioned off include TV.de (€279,499), PC.de (€158,700) and DE.de (€144,277). None of these was later registered by Sedo, though.

Looking at the results of the initial registration phase, one can understand why many domain investors believe the allocation process was unfair and that insider trading was taking place. But according to DENIC, the pooling of registration rights is not illegal. Personally, I have to agree. It was foreseeable that most companies or investors would not be able to actually get the domains they wanted. As is always the case with valuable commodities, the buyers with the largest amount of cash on hand prevailed.

Copyright © 2003-2009 Dominik Mueller.

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28% of one- & two-letter .DE domains grabbed by one company

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Volkswagen has long been fighting to be allowed to register the domain name VW.de, because the company is commonly known under the acronym VW in Germany.

Only three two-letter domains had been registered by German companies during the short time frame before DENIC disallowed the registration of short domains years ago. Those three domain names were IX.de, HQ.de and Deutsche Bahn’s DB.de. Following the court ruling in June 2008, I already speculated about DENIC relaxing its rules at some point in the future. It was only a matter of time until companies would be able to register all other short .DE domains.

Now that Volkswagen won against DENIC, the registry decided to completely do away with its rule instead of only allowing the car manufacturer to claim its domain name. I think that was the right decision, although it is still not clear how the domains will be made available exactly. It is expected that there will be a rush for these highly valuable domains, but chances of actually getting one of them are very low. It is also expected that major corporations will try to take possession of their short domains through legal actions. About all two-letter combinations are trademarked, so lots of companies will undoubtedly go after their acronyms with the help of their legal departments. The case of Volkswagen has shown to what lengths large companies will go to protect their brands on the Internet.

What surprised me and domain industry insiders, is that DENIC is going to expand the German name space on October 23, 2009 already. That is only five days away from this post and it leaves registrars with very little time to prepare for the thousands of domain registration queries they will be receiving for these sought-after domain names. For this special occasion all DENIC-accredited registrars were given a limited number of queries they may send to DENIC per minute in order to ensure equal opportunities for everybody. But smart companies are trying to play the system already. Domain marketplace Sedo, for example, has partnered with selected registrars in an effort to pool those limited domain registration queries and increase chances of successfully registering a domain. Sedo started a special online auction for the most valuable .DE domains that will be made available. Interested parties can place bids on the domains they want. The highest bidder of a domain will then get it if Sedo and its partner registrars are successful in registering it on behalf of the bidder. Bids on most two-letter .DE domains are currently in the low to mid four-figure range, but there are still more than four days to go until the auction ends and the domains will drop on the open market.

It will be most interesting to see how all this will play out, considering the high amount of money ready to be spent on these rare domain names. As said, the exact process is still not entirely clear. I hope DENIC will explain things better in the coming days, so that all interested companies and private investors will know how to best go about applying for the domain they want.

Copyright © 2003-2009 Dominik Mueller.

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DENIC to make million-dollar domains available for the first time

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Related posts:

1. Volkswagen allowed to register VW.de
2. 28% of one- & two-letter .DE domains grabbed by one company
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Every day search engines analyze our behavior and collect data we generate, and which they then store in databases. I have often wondered what data they have exactly and what they’re using them for. I’ve also known that professionals from dozens of industries are working at Google, for example, but what does an economist at Google do other than helping the company’s management make better business decisions?

Well, a Google economist might just as well analyze the search engine’s database, look at what people have been searching for and from that information infer that the economy is recovering. That is what Google’s economist Hal Varian has done, as he told the Washington Post. Mr. Varian has observed that the search patterns for certain search terms have changed over the last weeks. For instance, the number of searches for unemployment benefits has gone down while the number of searches for real estate agents and homes for sale has gone up. This could be a sign of a healing housing market. Such patterns can be analyzed using Google Trends, although I believe Google’s internal tools are much more powerful than the version of Google Trends freely available to the public.

So, could data collected from search engine queries be used to forecast the future development of the economy? It may be possible, although it sounds like a dream of the future. Because the popular search engines (Google, Yahoo and Bing) are used by more than one billion users from all over the world — and the number of Internet users will even increase as developing countries are getting better infrastructures and more advanced technologies –, the data gained from search patterns are highly representative, if you can derive the right conclusions from them. Access to this vast amount of up-to-date information has quickly made Google et al. maybe the biggest market research companies in the world. Search patterns are even better than the knowledge gained from opinion polls in many cases considering that the answers given in such polls are usually biased, whereas when people use a search engine they do not think about the fact that their usage of the search engine is precisely documented and analyzed in the background.

I’m not saying that we should rely on search engines to predict where the economy is heading. Far from that; search engines should not hold too much power. But it is interesting what Internet technology and modern online services, such as search engines, can be used for and what conclusions can be drawn from our usage of Google & Co. I believe statisticians have a bright future ahead of them with the increasing amount of data collected in our interconnected, fast-paced world. People will become more transparent, whether you like it or not, so you will be well advised to understand how to use that development for your own good, instead of having it used against you.

Copyright © 2003-2009 Dominik Mueller.

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Economy may be recovering, says Google

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Yahoo Search Marketing to change its payout algorithms and stop doing business with some of its direct partners. Overall, lower revenues for Yahoo’s pay-per-click advertising partners are expected.

As has been reported by two blogs today, Domain Name Wire and Julia Mackenzie, Yahoo’s search marketing division is going through some changes that are likely to affect the bottom line of the company’s domain parking partners.

Yahoo (YHOO) already announced last month that it would change its payout algorithm, a change which will have a direct effect on the pay-per-click revenue that is generated through domain parking and that is paid out to Yahoo’s PPC partners. Rumor has it that the new algorithm will evaluate all clicks even more strictly based on the quality of the traffic sent to Yahoo’s advertisers. It might be that Yahoo is trying to increase the traffic quality of its search marketing network now that it will cooperate with Microsoft’s Bing for the monetization of its search traffic. Whether Microsoft (MSFT) made it a requirement that the traffic quality may not be below a certain level is not known. Anyway, this change will definitely lower the cost per click for most domains and hence result in lower total revenues for domain name owners. Domain Name Wire has been told by industry insiders that domain parking revenue is expected to decrease by as much as 12% on the average.

In another related blog post today, Julia Mackenzie spreads the rumor that Yahoo is also going to stop working with some of its direct domain parking partners if their traffic score is below 7 out of 10. The traffic score is Yahoo’s internal rating of traffic quality. This is a further step undertaken by Yahoo to improve the traffic quality of its network, and it will force some partners to go directly to Google (GOOG), if possible at all, or simply go to one of the many third-party domain parking providers like Sedo or Parked.com. Either way, they will probably suffer a severe loss in revenue.

Both Google and Yahoo have been working directly with holders of high-traffic domain portfolios to monetize their partners’ traffic, which usually is a win-win relationship because the domain portfolio owners do not have to share their revenues with a middleman. But now, as it seems, Yahoo is going to decrease the number of its direct partners. Julia also writes, however, that the company’s syndication partners (the big parking companies) will not be affected by this decision. That means that Yahoo and the syndication partners will be the winners here, while Yahoo’s smaller partners or at least those with lower-quality traffic will lose out.

Domain parking revenues have been on a decline for a long time now and, honestly, I have lost faith in revenues ever going back up again. It is more likely that either Google and Yahoo or the third-party parking providers will try to get an even bigger slice of the pie in the future. What are the alternatives for domain name owners? Developing domains and then using AdSense for monetization is no real option, because AdSense is controlled by Google, too. I guess direct advertising deals is the answer, but that’s material for another article.

Copyright © 2003-2009 Dominik Mueller.

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Changes ahead for Yahoo domain parking partners

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As reported by Oversee.net’s public relations department, the SnapNames September showcase auction concluded today with a total of $46,930 in domain sales. Out of the 90 domains 23 were sold, namely:

millionairedating.com $15,000.00
rentersinsurance.net $8,240.00
discountloans.com $3,950.00
onlineaccountingdegrees.com $3,400.00
simplyjobs.com $2,950.00
onlinepsychologydegrees.com $2,500.00
softwarecareers.com $1,650.00
montrealvacations.com $1,450.00
datingideas.com $1,210.00
lawdegreeonline.com $1,200.00
winesale.com $1,180.00
freeloanquote.com $550.00
prepaidphone.net $525.00
careerforums.com $375.00
gelsocks.com $350.00
computerrentals.net $300.00
downloadablebooks.net $300.00
foreclosurelists.net $300.00
highestinterestsavingsaccount.com $300.00
internetdegreeprograms.net $300.00
lawyerlistings.com $300.00
legalassistanttraining.com $300.00
rockguitarlessons.com $300.00

Especially MillionaireDating.com is a very good sale at a high price, in my opinion. Assuming no traffic, I would not have bid that high for it as-is, but apparently the buyer saw something in it that I don’t see. I know a successful marriage broker from Switzerland who helps wealthy customers find the right partner. He is a multi-millionaire now, and every time he comes for a visit he either drives an old Bentley or a limited-edition Lamborghini Diablo. So lots of money can be earned when pairing millionaires off with each other, but it should still be difficult to make that much money on the Internet in this business, because there will always be something reclusive about upper-class dating that requires absolute confidentiality.

Copyright © 2003-2009 Dominik Mueller.

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SnapNames September Showcase Auction Results

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Today, however, I stumbled upon a post on Search Engine Land saying that domain registrations probably have a small influence on rankings in search engines, but that other factors (quality of content, amount of links, etc.) have a lot more weight. This isn’t surprising to me, but I still believe that the age of a domain as well as its future expiration date do affect search rankings, even if only to a small extent.

Barry Schwartz from Search Engine Roundtable quotes John Mueller, a Google employee:

A bunch of TLDs do not publish expiration dates — how could we compare domains with expiration dates to domains without that information? It seems that would be pretty hard, and likely not worth the trouble. Even when we do have that data, what would it tell us when comparing sites that are otherwise equivalent? A year (the minimum duration, as far as I know) is pretty long in internet-time .

But another Google employee and SEO expert, Matt Cutts, gave less clear advice, as quoted from Search Engine Land:

My short answer is not to worry very much about that [the number of years a domain is registered], not very much at all.

In the same post, Search Engine Land says that when they had an interview with a Yahoo employee some time ago, that employee said that domain registration lengths did matter. So while most search industry insiders say that domain registrations have only a small influence on search engine optimization, none of them clearly states that they have no influence at all.

My interpretation is this: Concentrate on creating high-quality websites with unique content providing valuable information to visitors and that attract lots of incoming links. But if you ever get the chance to purchase an aged domain, go for it as it will most likely improve your chances of getting a better ranking in search engines. Also renew your domains well in advance if you already know you’re going to own them for a long time, because this might have a positive effect on your search engine position as well. If nothing else, you won’t have to worry about domain expirations for a couple of years anymore.

Copyright © 2003-2009 Dominik Mueller.

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Length of domain registration important for SEO?

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Since then, Unister GmbH has been busy developing an online shop under its newly acquired domain. After one year of development, the Shopping.de website has finally been launched and is now waiting for shoppers to arrive and spend their money. The press release says the launch of Shopping.de will be supported by an extensive marketing campaign, although I haven’t seen or heard any ads for the site, yet.

The high sale price of €1.96 million makes Shopping.de the most expensive .DE domain name so far. Unister was also the buyer of the Kredit.de domain, which it bought for a reported €892,000 (~$1,275,000) and which is the second-highest .DE domain sale that I know of. It’s sales like these that give you an idea of how many high-value domains really change hands without being reported to the public.

Copyright © 2003-2009 Dominik Mueller.

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Shopping.de sold for €1.96 million

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Not only is this a very surprising move but it is also alarming, considering that what PTS is asking for is to make the inclusion of a perfectly generic term in domain names illegal. Against the background of the current financial crisis and the increasing number of online scams I can understand why PTS might want to have more control over banks in Sweden and how they do business on the Internet, but banning generic terms from domain names is something that should not be tolerated. After all, it is very well possible that in the future they would begin to ban more words and censor the .SE name space if this ruling really goes through.

What remains to be done is to hope that the .SE registry will fight this demand, and that it will successfully repel it.

(via CircleID)

Copyright © 2003-2009 Dominik Mueller.

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Swedish regulator wants the word “bank” to be banned from .SE domains

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Both companies were able to achieve the transfer of the disputed domain names: Lufthansa won Lufthansa.com.au and Burberry won BurberryGroup.com.

In the case of Lufthansa.com.au, the former owner had been so audacious as to approach Deutsche Lufthansa AG and offer the domain to them at a price of €10,000. Following that, Lufthansa contacted the owner using the contact information listed in the whois and asked for the domain to be transferred to them for free. The domain owner, however, did not do so. Instead, he chose to get back to Lufthansa with a lower price of €3,000. After some back and forth, including repeated requests to hand over the domain name, Deutsche Lufthansa AG finally decided to file the WIPO complaint. Throughout the proceedings, the respondent did not bother to respond to Lufthansa’s claims anymore, and he expectedly lost the domain name Lufthansa.com.au to the rightful new owner.

I’m always at a loss as to why anybody would purchase such obvious trademark infringements. I mean, I understand that there is a financial motivation, but the registration of these domains was obviously illegal. It is the bad faith use of domain names, like witnessed in the aforementioned cases, that gives the domain industry a bad name. Maybe you remember the LH.com ruling from 2008, which was a disastrous decision. But in the case of Lufthansa.com.au, Deutsche Lufthansa AG had the right to go after the domain name and rightfully won. Every time a self-proclaimed domain investor — who actually is a cybersquatter — registers or acquires a trademark-infringing domain, that will strengthen the lobby of large corporations. Those corporations might then decide to also go after domains they do not have any rights in, as has unfortunately happened with LH.com. This, in turn, weakens the position of professional domain investors and will make it more difficult for them to defend their generic domain names against attempts of reverse hijacking.

As an industry, we must stand together and fight cybersquatting. While supporting trademark holders with getting domains they are entitled to, we may not give them any reason to go after valuable, non-infringing keyword domains. This includes not to applaud those multi-millionaire domainers who have made a good part of their fortunes using TM-infringing typo domains. It also includes to educate the general public about the lawful trading of keyword domain names, called domaining or domain investing. The domain industry is still a young industry. It has come a long way and many companies and individuals in this field have accomplished a lot, but every time somebody trades a trademark-infringing domain, that will throw us a step back again. If we want the industry to continue to mature, we may not endure such destructive behavior.

Copyright © 2003-2009 Dominik Mueller.

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Lufthansa, Burberry win Domain Names

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Specifically, ICANN seeks input on the following questions, as quoted from its website:

1. Whether adequate opportunity exists for registrants to redeem their expired domain names;
2. Whether expiration-related provisions in typical registration agreements are clear and conspicuous enough;
3. Whether adequate notice exists to alert registrants of upcoming expirations;
4. Whether additional measures need to be implemented to indicate that once a domain name enters the Auto-Renew Grace Period, it has expired (e.g., hold status, a notice on the site with a link to information on how to renew, or other options to be determined);
5. Whether to allow the transfer of a domain name during the Redemption Grace Period (RGP).

I think a lot of this depends not only on ICANN but also on the registrars where the domains are registered at. It is obviously important to have standardized agreements that are binding to all domain registrars, and which regulate the post-expiration recovery of domain names in a way that will benefit domain owners.

Speaking of questions 1 and 3, I would say that the mechanisms in place at good domain registrars today are absolutely sufficient and fair. For example, Moniker sends out several expiration notices via email well in advance of the expiration date, and on top of that it also prominently lists soon-to-expire domains on the dashboard within the customers’ accounts. I can’t speak for all domain registrar companies, but those I’ve been using have done a good job of letting me know of domains that were about to expire, so that I had ample time to renew them. It’s also important that registrars mark expired domains as being in redemption period and also provide a link to further information to avoid confusion on part of inexperienced domain owners.

The idea formulated in question 4, to put a notice directly on the site of expired domains with a link to information on how to renew or redeem expired domains, would perhaps function as an effective alert to domain holders, especially those who do not fully understand the whole expiration and renewal process. We can observe every day that domain owners do not understand why they have lost a domain name they failed to renew. Providing more detailed information and explaining the domain expiration and redemption process even to the most inexperienced people could benefit not only affected domain owners but also ICANN and the domain community in general, because it would prevent legal conflicts and save money in the long run.

In answer to question 2, this again depends on the individual domain name registrars. Most registrars use transparent terms of service which also inform customers about the concept of domain expirations. But legal agreements are never an easy read, so formulating the agreements as simple as possible would certainly make it easier for customers new to domain names. On the other hand, it is most important that the agreements cover all possible legal aspects of registering, renewing and recovering domain names, and to allow for bilateral legal protection should remain the primary purpose of the agreements between domain registrars and registrants.

Regarding question 5, I strongly dissent the idea of allowing the transfer of a domain away from its owner during the redemption grace period. At the very least, the current domain owner should receive a note by phone and email upon a request to change ownership to the new owner, which he is then allowed to veto within a given time frame. Allowing the transfer of a domain during the RGP would be the same as doing away with the grace period altogether. This may not happen, because the redemption grace period is an important part of the recovery process and resembles the last chance for domain registrants to regain ownership of domain names they let accidentally expire.

Copyright © 2003-2009 Dominik Mueller.

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ICANN seeking input on Post-Expiration Domain Recovery

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