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> Make .org domain names "accessible and reasonably priced for all", including limiting price increases to no more than 10% per year This immediately stuck out

> Make .org domain names "accessible and reasonably priced for all", including limiting price increases to no more than 10% per year This immediately stuck out to me as a really bad deal. Rising with inflation, somewhere between 1 and 4% per year, would essentially keep prices stable. This is tricky when selling internationally, but roughly possible. Rising by 10% each year is significantly faster than inflation, and would result in a $20 domain name doubling in price in 7 years, or 6x in 20 years. This is the internet we're talking about, 20 year time horizons are important and yet still short sighted. In 100 years we're talking $275,000 rather than the $400 that inflation would get us to. > Ethos has said that their plan is to "live within the spirit of historic practice," This is not what Private Equity does. It cuts costs and quality, raises prices, strips assets, and seeks to significantly increase profits. I think it's naive and short-sighted to take them at their word, as this article admits they are doing.

oefrha 7y ago
Not sure why OP tosses out 10% price hikes per year as reassuring. Maybe he’s too rich to make sense of small amounts of money like this. Even $10 is a nontrivial sum in some underdeveloped countries as is. Also, this is just “what Ethos themselves have said about their intentions with regard to .org”, and we all know how good for-profit entities are at keeping promises that affect their bottom line.
- cartoonworld 7y ago
  His argument seems to be: 1: The Internet Society does great work protecting the Internet 2: Ethos is a worthy successor to the Internet Society as the steward of .org. This is incoherent. THis blog post can be summed up in one sentence: "I reckon its fine." Thanks for voting to sell .ORG Richard Barnes. I know he thinks its fine, I think jacking the prices up 10% year over year is nonsense. What do the financials look like and what's the internet getting out of this? A money grab looks like a money grab.
  - oefrha 7y ago
    .org registry was already a pretty good cash cow. According to their tax return[1], in 2018 they grossed ~$93m over ~$33m registry administration expense, ~$7m employee compensation (interestingly there's a 30% year over year increase here), and some other smaller expenses. They raised $48.7m for Internet Society. Note that out of registry administration expense, $18.1m went to Afilias[2] (this should also be in the tax return), a for-profit technical registry provider. So every time you paid your $10 .org registration fee, at least $5 went to Internet Society as a mandatory donation, somewhere between $0-2 went to Afilias the for-profit contractor, some small amount went to GoDaddy for marketing, etc. Anyway, a non-profit printing $50m/yr without begging for donations is certainly nothing to sneer at, and under the control of a for-profit entity they should expect more even if the price stays the same. And you bet the price won't stay the same. [1] https://thenew.org/app/uploads/2019/09/PIR-2017_2018-990.zip https://thenew.org/app/uploads/2019/09/PIR-2017_2018-990.zip [2] https://domainnamewire.com/2019/10/28/pir-org-slashes-registry-fee-to-afilias-in-half-to-18-million/ https://domainnamewire.com/2019/10/28/pir-org-slashes-regist...
    - cartoonworld 7y ago
      As you said, according to the 2018 tax return revenues from PIR running .org resulted in $48,000,000.00 in cash grants handed over to the Internet Society. How much is the sale worth? That $48M Grant was worth more than Internet Society's total revenue in 2016 according to wkipedia. ISOC just sold a sustainable $50Million revenue stream. If LetsEncrypt copped a $0.10 fee per certificate, how much would it cost for Richard to rubber stamp a Symantec acquisition of LetsEncrypt?
      - type0 7y ago
        > If LetsEncrypt copped a $0.10 fee per certificate, how much would it cost for Richard to rubber stamp a Symantec acquisition of LetsEncrypt? Easy now, don't give him ideas.
        ohashi 7y ago
- danpalmer 7y ago
  It's the exponential growth bias too. Repeated price hikes like this work out to become vastly more than most people expect, very quickly.
im3w1l 7y ago
Changing domains is not easy, but if you bring up 20+ year horizons, then it is definitely viable to change domains to deal with rising costs.
- femto113 7y ago
  Except that the way trademark law works in the US you have to "defend" your marks or they can be considered abandoned. This means as long as renewing your domain is cheaper than the cost of hiring an attorney to send a Cease and Desist letter to the squatter who grabs it after you're better off paying. I'm guessing that horizon is more like 30-40 years off.
  - akiselev 7y ago
    Is there any precedent where the abandonment of a domain has been accepted by the courts as abandonment of a trademark?
    - femto113 7y ago
      I do not know if anyone has lost a trademark over this, but in a practical sense you still need to be proactive--there is no trademark police force that will ensure nobody uses the domain inappropriately. Consider a donation-solicitation business that takes over abandoned .org domains to collect donations in your organization's name and then keep a percentage. You probably don't want that to happen, you certainly could make a reasonable trademark infringement case, but unless you take steps like sending them a C&D there's nothing stopping them. Even if all they did was put a CNAME for your old .org in that redirects to their own domain they could have a meaningful impact on your operations.
- astrodust 7y ago
  What costs? They have to run some DNS and WHOIS servers, plus collect money. This isn't rocket fusion, this is something every country, no matter how tiny, manages to deal with for their own national domain. If they're in way over their heads maybe they should out-source components of it, but retain control over things like pricing. Or, sure, sell it off. I'm sure nothing bad will happen like when .com went evil.
tlb 7y ago
PE companies are very much in the business of valuing a revenue stream that goes up 10% per year highly. This article doesn't show thinking beyond 10-20 years, but most of the economic value comes even farther in the future. In 50 years, it could be 14000x the current price! If you plug a 10%-growing revenue stream into a net-present-value formula with a discount rate less than 10%, you get infinity. The future revenue stream has infinite value. Even under reasonable economic uncertainty, you might be able to justify a P/E ratio of 100. That hedge fund got a sweet deal.
- somebodythere 7y ago
  1. The price cap is an informal agreement, not legally binding 2. The domain name market would probably not bear a 14000x increase.
  - jjoonathan 7y ago
    So they run price discovery to figure out who gets $10 domains and who gets soaked for millions.
deleted 7y ago
[deleted]
astrodust 7y ago
10% per year, so in 10 years it's 2.6x more, and 6.7x in 20 years. That's way above the rate of inflation.
stjohnswarts 7y ago
It is a bad deal. No way a for-profit company bought rights to .org without having an intention to make a profit on it. I have confidence in capitalism and it always, always seeks to maximize profit.
jwalton 7y ago
I suspect if you ran the .org domain for profit, and you raised the price to $275000 a year, you would find you'd rapidly lose all your customers. There are lots of other TLDs that are cheap, there's healthy competition, and .org stands to earn a lot more money by being competitive than by raising the prices into the stratosphere.

oefrha 7y ago

Not sure why OP tosses out 10% price hikes per year as reassuring. Maybe he’s too rich to make sense of small amounts of money like this. Even $10 is a nontrivial sum in some underdeveloped countries as is. Also, this is just “what Ethos themselves have said about their intentions with regard to .org”, and we all know how good for-profit entities are at keeping promises that affect their bottom line.

cartoonworld 7y ago
His argument seems to be: 1: The Internet Society does great work protecting the Internet 2: Ethos is a worthy successor to the Internet Society as the steward of .org. This is incoherent. THis blog post can be summed up in one sentence: "I reckon its fine." Thanks for voting to sell .ORG Richard Barnes. I know he thinks its fine, I think jacking the prices up 10% year over year is nonsense. What do the financials look like and what's the internet getting out of this? A money grab looks like a money grab.
- oefrha 7y ago
  .org registry was already a pretty good cash cow. According to their tax return[1], in 2018 they grossed ~$93m over ~$33m registry administration expense, ~$7m employee compensation (interestingly there's a 30% year over year increase here), and some other smaller expenses. They raised $48.7m for Internet Society. Note that out of registry administration expense, $18.1m went to Afilias[2] (this should also be in the tax return), a for-profit technical registry provider. So every time you paid your $10 .org registration fee, at least $5 went to Internet Society as a mandatory donation, somewhere between $0-2 went to Afilias the for-profit contractor, some small amount went to GoDaddy for marketing, etc. Anyway, a non-profit printing $50m/yr without begging for donations is certainly nothing to sneer at, and under the control of a for-profit entity they should expect more even if the price stays the same. And you bet the price won't stay the same. [1] https://thenew.org/app/uploads/2019/09/PIR-2017_2018-990.zip https://thenew.org/app/uploads/2019/09/PIR-2017_2018-990.zip [2] https://domainnamewire.com/2019/10/28/pir-org-slashes-registry-fee-to-afilias-in-half-to-18-million/ https://domainnamewire.com/2019/10/28/pir-org-slashes-regist...
  - cartoonworld 7y ago
    As you said, according to the 2018 tax return revenues from PIR running .org resulted in $48,000,000.00 in cash grants handed over to the Internet Society. How much is the sale worth? That $48M Grant was worth more than Internet Society's total revenue in 2016 according to wkipedia. ISOC just sold a sustainable $50Million revenue stream. If LetsEncrypt copped a $0.10 fee per certificate, how much would it cost for Richard to rubber stamp a Symantec acquisition of LetsEncrypt?
    - type0 7y ago
      > If LetsEncrypt copped a $0.10 fee per certificate, how much would it cost for Richard to rubber stamp a Symantec acquisition of LetsEncrypt? Easy now, don't give him ideas.
      - ohashi 7y ago
danpalmer 7y ago
It's the exponential growth bias too. Repeated price hikes like this work out to become vastly more than most people expect, very quickly.

im3w1l 7y ago

Changing domains is not easy, but if you bring up 20+ year horizons, then it is definitely viable to change domains to deal with rising costs.

femto113 7y ago
Except that the way trademark law works in the US you have to "defend" your marks or they can be considered abandoned. This means as long as renewing your domain is cheaper than the cost of hiring an attorney to send a Cease and Desist letter to the squatter who grabs it after you're better off paying. I'm guessing that horizon is more like 30-40 years off.
- akiselev 7y ago
  Is there any precedent where the abandonment of a domain has been accepted by the courts as abandonment of a trademark?
  - femto113 7y ago
    I do not know if anyone has lost a trademark over this, but in a practical sense you still need to be proactive--there is no trademark police force that will ensure nobody uses the domain inappropriately. Consider a donation-solicitation business that takes over abandoned .org domains to collect donations in your organization's name and then keep a percentage. You probably don't want that to happen, you certainly could make a reasonable trademark infringement case, but unless you take steps like sending them a C&D there's nothing stopping them. Even if all they did was put a CNAME for your old .org in that redirects to their own domain they could have a meaningful impact on your operations.
astrodust 7y ago
What costs? They have to run some DNS and WHOIS servers, plus collect money. This isn't rocket fusion, this is something every country, no matter how tiny, manages to deal with for their own national domain. If they're in way over their heads maybe they should out-source components of it, but retain control over things like pricing. Or, sure, sell it off. I'm sure nothing bad will happen like when .com went evil.

tlb 7y ago

PE companies are very much in the business of valuing a revenue stream that goes up 10% per year highly. This article doesn't show thinking beyond 10-20 years, but most of the economic value comes even farther in the future. In 50 years, it could be 14000x the current price! If you plug a 10%-growing revenue stream into a net-present-value formula with a discount rate less than 10%, you get infinity. The future revenue stream has infinite value. Even under reasonable economic uncertainty, you might be able to justify a P/E ratio of 100. That hedge fund got a sweet deal.

somebodythere 7y ago
1. The price cap is an informal agreement, not legally binding 2. The domain name market would probably not bear a 14000x increase.
- jjoonathan 7y ago
  So they run price discovery to figure out who gets $10 domains and who gets soaked for millions.

deleted 7y ago

[deleted]

astrodust 7y ago

10% per year, so in 10 years it's 2.6x more, and 6.7x in 20 years. That's way above the rate of inflation.

stjohnswarts 7y ago

It is a bad deal. No way a for-profit company bought rights to .org without having an intention to make a profit on it. I have confidence in capitalism and it always, always seeks to maximize profit.

jwalton 7y ago

I suspect if you ran the .org domain for profit, and you raised the price to $275000 a year, you would find you'd rapidly lose all your customers. There are lots of other TLDs that are cheap, there's healthy competition, and .org stands to earn a lot more money by being competitive than by raising the prices into the stratosphere.