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How this process actually works is you apply to carry a gTLD (ie .blog) this application fee costs $185,000. If no one else applies for the same string, you ar

How this process actually works is you apply to carry a gTLD (ie .blog) this application fee costs $185,000. If no one else applies for the same string, you are good to go. If they do there is an auction. The auction works like this. N parties participate and must provide an escrow account (to bid in good faith) they may bid up to what they want (and whats in escrow) and the winning bid pays out to the auctioneer (a minor fee) and the losing parties. IE 3 parties to this auction (making this up) automattic - 19 million paid Party 1 - 9.5 million earned Party 2 - 9.5 million earned You are essentially paying off your competition to go away. There are some other details and this was the initial process a few years ago, I have not heard if there are any significant adjustments now.

vmasto 10y ago
Any idea how this process manages abuse? What prevents me from bidding just $500,000 (if I had $500,000) to a TLD that I know is popular just to make money from the winner?
- curried_haskell 10y ago
  Did you read? The fact that you pay a $185,000 fee first. And then in order to make your $500,000 bid, you have to put that money in escrow. And then, you might accidentally remain the highest bidder and lose all that money in exchange for your shiny new tld.
  - markdown 10y ago
    $685,000 for .blog is a steal. Companies have paid millions for single domains. It was a very safe bet. Sounds ripe for abuse if you ask me. On top of that, think about how many people inside Automattic knew about their bid. The board at least. Any one of those people could have told a friend that WP was going to bid for it. Would you not have instantly put in a small bid of $200,000 if you'd known about this and had the cash?
    - xorcist 10y ago
      You pay for the privilege to be a registry. You don't own the domain in the same sense that you would own mydomain.com.
      - markdown 10y ago
        Yes, you own it in an even greater sense... because you basically own an almost infinite number of names under .blog. As the registrar, you can choose to not sell any domain names at all other than the ones you choose to use yourself.
        xorcist 10y ago
        What makes you say that? And what do you mean with "own in a greater sense", specifically? I'm far from an expert but I can't see how what you say is compatible with the ICANN's TLD Registry Agreement (especially section 2.9 and the whole of article 5).
  - tobltobs 10y ago
    Reading this description my first thought was, that can not work. If this would be all details there would thousands of bidders for the top 5% of domain nams.
- alphapapa 10y ago
  Seriously! $685k in, $9.5m out? Best investment value ever? Use the profit to rinse and repeat? There must be more to it than that...?
  - blowski 10y ago
    How many of these auctions are there? I'm asking for a friend.
- robalfonso 10y ago
  The process doesn't care that there are 200 bidders, the high bidder wins. The risk is in too many people bidding, and then you paid 185k and escrowed a amount of capital to do so. Now imagine you are participating in lots of auctions, it would be a substantial amount that is tied up for this process. In reality everyone who bids has a business model to actually sell the tld should they win. Not too much speculation going on here. What I don't recall is if you get your fee back if you lose, I want to say yes.
- alexggordon 10y ago
  The thing that prevents you is that the winnings don't scale. If there's a $185,000 application fee, then you need to make at least that back. That means that at: 2 parties, the winning bid needs to be at least $370,000 4 parties: $740,000 8 parties: $1,480,000 16 parties: $2,960,000 and so on. However, if people go into this simply to game the system, that means that each party needs to be able to bid at least the winning bid (because to make your money back, you need to be able to push the bid to that number), which means for 16 parties, you've now tied up $2,960,000 * 16 = ~ 50 million dollars in cash. And that's only to break even on the application fee. In addition to this, each applicant has to prove that they have the know-how and technical resources to run the gTLD[0]. Finally, the money you submit, will be in escrow for close to 9 months[1], which would make this incredibly infeasible as a money making system. [0] https://newgtlds.icann.org/en/applicants/global-support/faqs/faqs-en https://newgtlds.icann.org/en/applicants/global-support/faqs... [1] https://newgtlds.icann.org/en/applicants/global-support/faqs/faqs-en https://newgtlds.icann.org/en/applicants/global-support/faqs... (section 2.7)

vmasto 10y ago

Any idea how this process manages abuse? What prevents me from bidding just $500,000 (if I had $500,000) to a TLD that I know is popular just to make money from the winner?

curried_haskell 10y ago
Did you read? The fact that you pay a $185,000 fee first. And then in order to make your $500,000 bid, you have to put that money in escrow. And then, you might accidentally remain the highest bidder and lose all that money in exchange for your shiny new tld.
- markdown 10y ago
  $685,000 for .blog is a steal. Companies have paid millions for single domains. It was a very safe bet. Sounds ripe for abuse if you ask me. On top of that, think about how many people inside Automattic knew about their bid. The board at least. Any one of those people could have told a friend that WP was going to bid for it. Would you not have instantly put in a small bid of $200,000 if you'd known about this and had the cash?
  - xorcist 10y ago
    You pay for the privilege to be a registry. You don't own the domain in the same sense that you would own mydomain.com.
    - markdown 10y ago
      Yes, you own it in an even greater sense... because you basically own an almost infinite number of names under .blog. As the registrar, you can choose to not sell any domain names at all other than the ones you choose to use yourself.
      - xorcist 10y ago
        What makes you say that? And what do you mean with "own in a greater sense", specifically? I'm far from an expert but I can't see how what you say is compatible with the ICANN's TLD Registry Agreement (especially section 2.9 and the whole of article 5).
- tobltobs 10y ago
  Reading this description my first thought was, that can not work. If this would be all details there would thousands of bidders for the top 5% of domain nams.
alphapapa 10y ago
Seriously! $685k in, $9.5m out? Best investment value ever? Use the profit to rinse and repeat? There must be more to it than that...?
- blowski 10y ago
  How many of these auctions are there? I'm asking for a friend.
robalfonso 10y ago
The process doesn't care that there are 200 bidders, the high bidder wins. The risk is in too many people bidding, and then you paid 185k and escrowed a amount of capital to do so. Now imagine you are participating in lots of auctions, it would be a substantial amount that is tied up for this process. In reality everyone who bids has a business model to actually sell the tld should they win. Not too much speculation going on here. What I don't recall is if you get your fee back if you lose, I want to say yes.
alexggordon 10y ago
The thing that prevents you is that the winnings don't scale. If there's a $185,000 application fee, then you need to make at least that back. That means that at: 2 parties, the winning bid needs to be at least $370,000 4 parties: $740,000 8 parties: $1,480,000 16 parties: $2,960,000 and so on. However, if people go into this simply to game the system, that means that each party needs to be able to bid at least the winning bid (because to make your money back, you need to be able to push the bid to that number), which means for 16 parties, you've now tied up $2,960,000 * 16 = ~ 50 million dollars in cash. And that's only to break even on the application fee. In addition to this, each applicant has to prove that they have the know-how and technical resources to run the gTLD[0]. Finally, the money you submit, will be in escrow for close to 9 months[1], which would make this incredibly infeasible as a money making system. [0] https://newgtlds.icann.org/en/applicants/global-support/faqs/faqs-en https://newgtlds.icann.org/en/applicants/global-support/faqs... [1] https://newgtlds.icann.org/en/applicants/global-support/faqs/faqs-en https://newgtlds.icann.org/en/applicants/global-support/faqs... (section 2.7)