DomainNames
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http://www.smh.com.au/news/biztech/...rty-boom/2008/02/26/1203788290820.html?page=2
The coming dot AU property boom
Stewart Carter
February 26, 2008
Advertisement
AUSTRALIAN model, musician, dancer, actress and net entrepreneur Estelle Asmodelle is advertising her supermodel.net.au domain name for sale.
Her modelling agency business, Supermodel, already has a well-established website at supermodel.com.au, so she figures she'll make an easy $10,000 from the .net equivalent.
It's not going to set any records - not like, say, melbourne.com or perth.com which sold recently in the US for $US700,000 ($A762,000) and $US200,000 respectively, or bored.com which sold for $US4million earlier this month.
Strictly speaking, Estelle shouldn't do it. It is illegal to advertise Australian domain names (those ending in .au) for sale - or more accurately, it's prohibited under the rules of the industry regulator Au Domain Administration Ltd (auDA). A purely commercial trade of domains is also against the rules.
But Chris Disspain, chief executive officer at auDA, said people like Estelle needn't worry. "The auDA board has recently accepted the recommendations of our review panel to lift the ban on advertising Australian domain names for sale," he says. Work on implementing the change in policy has already begun and could be finished by as early as June this year. "We've got some administrative bits and pieces to work out first, and then there'll need to be some changes made to the software and systems used at the registrars. We're also mindful there'll need to be a program of public education so the general public is aware of the new policy.
"I'm concerned to make sure that we don't see a situation arising where domain name consumers are ripped off, and conned into paying too much for a com.au domain name. Likewise we want to make sure that we don't get people conned into selling them for too little. In other words we want to make sure there's going to be an informed marketplace."
Industry experts say an informed marketplace is likely to be a real problem to start with, if only because the current auDA policy has been so restrictive.
Bruce Tonkin, chief technology officer at Australia's biggest domain name registrar, Melbourne IT, says auDA's current rules restrict transfers of domain ownership to a very specific set of exceptional circumstances.
"The current policy doesn't allow domain names to be transferred or sold like other business assets. Essentially, you have to sell the whole business to sell the name.
"They have to apply to us for a transfer, and we have to check that the applicant has the authority to transfer the name, and there's usually some sort of legal deed that has to be attached, along with a statutory declaration.
"There are other ways of doing it but that's the main one and there are usually lawyers involved on both sides. Particularly for small businesses, it's a complicated, expensive and unwieldy process."
Mr Tonkin's latest figures show around a million Australian domain names have been registered, but very few get traded or transferred - he sees about 100 a year. Melbourne IT supports the decision to end the ban on advertising domain name sales and to simplify the transfer process. "It'll make it a lot easier for our customers and for the people who want to set up a website with a domain name that makes sense."
However, like others in the industry, he's concerned that when the policy first comes into effect, there'll be an element of sticker-shock because of the prices people will ask for com.au domain names.
"A lot of people are a bit concerned because they're thinking that some names are going to be worth hundreds of thousands of dollars."
Certainly, it's widely believed that some entrepreneurs have registered significant numbers of Australian domain names for speculative purposes.
Gold Coast-based company Dark Blue Sea is an active trader in American (dot.com) domain names, claiming a portfolio of more than half a million US domain names. It recently reported to the Australian Stock Exchange it had sold bedroomfurniture.com for more than $US250,000. However, chief financial officer Greg Platt says Dark Blue Sea has no Australian domain names in its portfolio. "The auDA rules are too restrictive and so we've never bothered," he says. "But we are certainly now looking at the dot.au space."
Mr Platt believes the upcoming rule changes could see prices for com.au domain names skyrocket. "It's a distinct possibility but it's hard to say because the current system isn't transparent and there's not much information about what people have paid in the public domain."
Indeed the only hard information on sale prices of Australian domain names is from 2002, when auDA changed its policy and auctioned off a number of domain names incorporating generic terms.
As was widely reported at the time, flowers.com.au was sold for $153,000. More recently, Tennis Australia bought the domain name tennis.com.au and admitted to having paid a substantial sum "less than six figures".
Last year's sale of jobs.com.au is also thought to have involved a six-figure sum, or close to it.
But, for the most part, trading of Australian domain names has been an underground activity. All agree that's going to change.
Simon Delzoppo, manager of the official registry or database of Australian domain names at AusRegistry, says that while auDA's rules on eligibility will remain, protecting trademark owners, domain name trading is likely to soon become very popular.
"There are lots of people with Australian domain names they're not using, and would like to sell and there'll be nothing to stop them selling them on eBay, if they like," he says. "Once the public learns about it, we think it'll be quite popular. We're expecting a fair volume of changes going back and forth between us and the registrars ... it'll be a largely automated process."
Mr Delzoppo says he thinks it unlikely that Australian domain names would ever match the prices paid for US domain names. He believes a million-dollar Australian domain name is out of the question.
Australia Post executive and auDA board member Joshua Rowe agrees with Mr Delzoppo.
"I don't think a million dollars is realistic for an Australian domain name," he says.
"I see it as a pure real estate. If you think of buying domain names as like buying land, then what you are buying is 'traffic' - or the number of people who are coming to visit that site. That might be because they've typed a guess at the domain name directly into their browser, or come via a search engine or even got there by clicking on links from other sites. But what you're paying for is the value of the traffic. And compared to the US sites the sites using Australian domain names don't attract anywhere near the same level of traffic."
Bruce Tonkin at Melbourne IT has a rule of thumb for comparing the prices of US and Australian domain names: divide by 100. "We'll probably be offering a new service to our customers where we can help them to try and sell their domain names, if they don't want to renew them. And, generally speaking, Australian domain names are worth about 100th of the prices people are paying for dotcoms."
Mr Tonkin also cautions that the prices reported for domain name sales out of the US are often prices that include the website built on that name.
"I compare it to the difference between selling a vacant block of land and developing a block with a house on it. If someone has developed the land already, it's worth a lot more."
Surprisingly, Mr Tonkin says Melbourne IT has no plans to set up an "aftermarket" of domain names for sale, similar to those already up in the US and elsewhere such as sedo.com or afternic.com or http://www.greatdomains.com.
Nor does Sydney-based NetRegistry, another of Australia's domain name registrars and ecommerce businesses. CEO and founder Larry Bloch says he is, nevertheless, very supportive of the change in auDA policy.
"We do have customers who find it incredibly frustrating that they've found a buyer for their domain names, but the rules make it very hard to effect a transfer. We certainly have many customers who will be wanting to take advantage of the rule change."
Mr Bloch says NetRegistry doesn't plan to change its business model because of the rule changes. "What we're unlikely to do in the first instance is help our customers find a buyer. That'll be up to them. But when our customers need help with IT issues like transferring the name, as a registrar we'll certainly be able to help them effect the transfer."
Mr Bloch says that NetRegistry itself holds a limited portfolio of unused Australian domain names, and thatthat those names might be made available for sale.
Stewart Carter is editor of the industry newsletter, eCommerce Report.
mail@ecommercereport.com.au
The coming dot AU property boom
Stewart Carter
February 26, 2008
Advertisement
AUSTRALIAN model, musician, dancer, actress and net entrepreneur Estelle Asmodelle is advertising her supermodel.net.au domain name for sale.
Her modelling agency business, Supermodel, already has a well-established website at supermodel.com.au, so she figures she'll make an easy $10,000 from the .net equivalent.
It's not going to set any records - not like, say, melbourne.com or perth.com which sold recently in the US for $US700,000 ($A762,000) and $US200,000 respectively, or bored.com which sold for $US4million earlier this month.
Strictly speaking, Estelle shouldn't do it. It is illegal to advertise Australian domain names (those ending in .au) for sale - or more accurately, it's prohibited under the rules of the industry regulator Au Domain Administration Ltd (auDA). A purely commercial trade of domains is also against the rules.
But Chris Disspain, chief executive officer at auDA, said people like Estelle needn't worry. "The auDA board has recently accepted the recommendations of our review panel to lift the ban on advertising Australian domain names for sale," he says. Work on implementing the change in policy has already begun and could be finished by as early as June this year. "We've got some administrative bits and pieces to work out first, and then there'll need to be some changes made to the software and systems used at the registrars. We're also mindful there'll need to be a program of public education so the general public is aware of the new policy.
"I'm concerned to make sure that we don't see a situation arising where domain name consumers are ripped off, and conned into paying too much for a com.au domain name. Likewise we want to make sure that we don't get people conned into selling them for too little. In other words we want to make sure there's going to be an informed marketplace."
Industry experts say an informed marketplace is likely to be a real problem to start with, if only because the current auDA policy has been so restrictive.
Bruce Tonkin, chief technology officer at Australia's biggest domain name registrar, Melbourne IT, says auDA's current rules restrict transfers of domain ownership to a very specific set of exceptional circumstances.
"The current policy doesn't allow domain names to be transferred or sold like other business assets. Essentially, you have to sell the whole business to sell the name.
"They have to apply to us for a transfer, and we have to check that the applicant has the authority to transfer the name, and there's usually some sort of legal deed that has to be attached, along with a statutory declaration.
"There are other ways of doing it but that's the main one and there are usually lawyers involved on both sides. Particularly for small businesses, it's a complicated, expensive and unwieldy process."
Mr Tonkin's latest figures show around a million Australian domain names have been registered, but very few get traded or transferred - he sees about 100 a year. Melbourne IT supports the decision to end the ban on advertising domain name sales and to simplify the transfer process. "It'll make it a lot easier for our customers and for the people who want to set up a website with a domain name that makes sense."
However, like others in the industry, he's concerned that when the policy first comes into effect, there'll be an element of sticker-shock because of the prices people will ask for com.au domain names.
"A lot of people are a bit concerned because they're thinking that some names are going to be worth hundreds of thousands of dollars."
Certainly, it's widely believed that some entrepreneurs have registered significant numbers of Australian domain names for speculative purposes.
Gold Coast-based company Dark Blue Sea is an active trader in American (dot.com) domain names, claiming a portfolio of more than half a million US domain names. It recently reported to the Australian Stock Exchange it had sold bedroomfurniture.com for more than $US250,000. However, chief financial officer Greg Platt says Dark Blue Sea has no Australian domain names in its portfolio. "The auDA rules are too restrictive and so we've never bothered," he says. "But we are certainly now looking at the dot.au space."
Mr Platt believes the upcoming rule changes could see prices for com.au domain names skyrocket. "It's a distinct possibility but it's hard to say because the current system isn't transparent and there's not much information about what people have paid in the public domain."
Indeed the only hard information on sale prices of Australian domain names is from 2002, when auDA changed its policy and auctioned off a number of domain names incorporating generic terms.
As was widely reported at the time, flowers.com.au was sold for $153,000. More recently, Tennis Australia bought the domain name tennis.com.au and admitted to having paid a substantial sum "less than six figures".
Last year's sale of jobs.com.au is also thought to have involved a six-figure sum, or close to it.
But, for the most part, trading of Australian domain names has been an underground activity. All agree that's going to change.
Simon Delzoppo, manager of the official registry or database of Australian domain names at AusRegistry, says that while auDA's rules on eligibility will remain, protecting trademark owners, domain name trading is likely to soon become very popular.
"There are lots of people with Australian domain names they're not using, and would like to sell and there'll be nothing to stop them selling them on eBay, if they like," he says. "Once the public learns about it, we think it'll be quite popular. We're expecting a fair volume of changes going back and forth between us and the registrars ... it'll be a largely automated process."
Mr Delzoppo says he thinks it unlikely that Australian domain names would ever match the prices paid for US domain names. He believes a million-dollar Australian domain name is out of the question.
Australia Post executive and auDA board member Joshua Rowe agrees with Mr Delzoppo.
"I don't think a million dollars is realistic for an Australian domain name," he says.
"I see it as a pure real estate. If you think of buying domain names as like buying land, then what you are buying is 'traffic' - or the number of people who are coming to visit that site. That might be because they've typed a guess at the domain name directly into their browser, or come via a search engine or even got there by clicking on links from other sites. But what you're paying for is the value of the traffic. And compared to the US sites the sites using Australian domain names don't attract anywhere near the same level of traffic."
Bruce Tonkin at Melbourne IT has a rule of thumb for comparing the prices of US and Australian domain names: divide by 100. "We'll probably be offering a new service to our customers where we can help them to try and sell their domain names, if they don't want to renew them. And, generally speaking, Australian domain names are worth about 100th of the prices people are paying for dotcoms."
Mr Tonkin also cautions that the prices reported for domain name sales out of the US are often prices that include the website built on that name.
"I compare it to the difference between selling a vacant block of land and developing a block with a house on it. If someone has developed the land already, it's worth a lot more."
Surprisingly, Mr Tonkin says Melbourne IT has no plans to set up an "aftermarket" of domain names for sale, similar to those already up in the US and elsewhere such as sedo.com or afternic.com or http://www.greatdomains.com.
Nor does Sydney-based NetRegistry, another of Australia's domain name registrars and ecommerce businesses. CEO and founder Larry Bloch says he is, nevertheless, very supportive of the change in auDA policy.
"We do have customers who find it incredibly frustrating that they've found a buyer for their domain names, but the rules make it very hard to effect a transfer. We certainly have many customers who will be wanting to take advantage of the rule change."
Mr Bloch says NetRegistry doesn't plan to change its business model because of the rule changes. "What we're unlikely to do in the first instance is help our customers find a buyer. That'll be up to them. But when our customers need help with IT issues like transferring the name, as a registrar we'll certainly be able to help them effect the transfer."
Mr Bloch says that NetRegistry itself holds a limited portfolio of unused Australian domain names, and thatthat those names might be made available for sale.
Stewart Carter is editor of the industry newsletter, eCommerce Report.
mail@ecommercereport.com.au
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