Automattic Purchases .blog TLD for $19M | Hacker News Reader

Automattic Purchases .blog TLD for $19M

ma.tt

121 pointselbigbad128 comments

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.

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?

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...

[1] https://newgtlds.icann.org/en/applicants/global-support/faqs... (section 2.7)

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...?

How many of these auctions are there? I'm asking for a friend.

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.

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.

$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?

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.

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.

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).

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.

It's amazing that in the age of Google Search that anyone places any value on the TLD for a domain. Browser vendors have run dozens of studies that indicate that most people do not enter fully qualified domains in the address bar, which is why all address bars are wired into a search provider.

I feel like the the explosion of TLDs is a very thinly veiled money grab aimed at exploiting two groups of people:

1) Trademark owners

2) Unsophisticated internet marketers

Disagree:

When we first launched Sync we had to settle with "Sync.us" due to all other TLDs were taken. We forced ourselves to love the name. We printed "Sync For Us" on all our t-shirts and swag. We thought it was an awesome way to capitalize on the TLD. Sync Us .. Sync Us ... Sync Us ....

Boy, were we ever wrong! At some point the powers that be (Nokia I think) put Sync.com up for auction.

We stumbled on it quite accidentally, one of our developers landed on the auction page while trying to get to our own website. This little irony itself highlights the value of the TLD.

So we paid a small fortune and rebranded our company from Sync.us to Sync.com.

This turned out to be a game changer for Sync. Everything came into focus. People could more easily remember us, and find us. We gained credibility. Traffic to our website increased dramatically, as did signups.

Our initial TLD decision held us back.

Is .blog a good TLD? For WordPress users it just might be.

TLDs give a business credibility. People are much more likely to shop at foo.com than foo.info.

The question is if people are more likely to visit foo.blog than blog.foo.com. I don't think that is the case.

OTOH, having the ".blog" TLD allows you to start a blogging website (like Medium), and hand out domain names to your clients.

... Which literally describes why Automattic bought it. They own Wordpress.

But foo isn't buying '.foo' or foo.blog. I don't see how credibility is related to the new TLDs.

people are just as likely to click foo.co.m.ru too

use whatever money you were going to use on a TLD and use it on your facebook adspend, nobody is typing in addresses anymore.

Much fun building a brand with foo.co.m.ru

Throw in a 'u' after the 'm' and foocomuru is far from the worst brand name I've heard.

Reminds me of cs.rin.ru [1]

[1] http://cs.rin.ru/forum

"Where does the dots go again?"

Look at my username so you know my answer is legit. The umlaut goes over a consonant.

Seriously though, I don't know how anyone names a business anymore and manages to get a reasonably relevant .com domain name. At some point we gotta give up and use these other TLDs.

ha! Flashbacks to bookmarking in 2003

I'd argue that a TLD can add semantic meaning to a website's domain name in a more general way than what would be possible by using subdomains, and without the clutter of using /paths/to/sections/and/pages.

It is not about directly entering, it is about search results and yes you still get to work to rank them better.

It still matters for email addresses.

Why does everyone has such high hopes for ICANN go be correct and ethical? Their track record reads like the equivalent of a digital mafia.

ICANN raises prices abrtrary regularly. You tell me why a .COM costs suddenly $0.22 cents more this year. It sure shouldn't be for bandwidth or storage space regarding the administration of the domain name. In fact, you would think it would become cheaper.

A few years ago 95% of the bandwidth was malign or useless (ie things like ddos attacks or endless looks around DNS lookups). If that's increased to 96% that'll counter any savings cheaper traffic.

ICANN may not be terribly nice, but please be fair.

This has made me realise I have no idea what the answer to these questions is: who did they buy it from? Where does that money go? Who mines/forges/lays new tlds?

ICANN.

Who can basically make new TLDs whenever, can't they? At no real cost to themselves. By what authority to they derive that privilege, why are they allowed to make such huge sums without doing anything useful for the money?

"Who can..." ICANN. Yes it can be whenever they want. No one ever stops them. They added several in 2001. Now they've opened the floodgates.

"At no real cost..." True. Except the cost of running one of the 13 server addresses. And IMO it could be a dog and no one would notice. I think the A server (198.41.0.4) is really all anyone needs. The cost of a new TLD to ICANN is the cost of editing a text file.

"By what authority..." None.

", why are they allowed..." A question I have been asking for over 20 years. Answer: Because we let them?

You can say no to ICANN. Run your own root on 127.x.x.x. You can edit the root.zone to be just as you want it. Want to delete a silly TLD (e.g., .loans)? Edit a text file. Want to add your own new TLD? Edit a text file. The cost? Editing a text file.

I recall a former Board member of ICANN admitting he himself ran his own root for many years.

ICANN's ability to make millions in profit from TLD's relies on an interesting prerequisite. All DNS admins have to use a root.hints file that points to the (13) addresses serving ICANN's root.zone. Often they have no idea this root.hints file even exists, let alone have the guts to edit it. The root server addresses to use are chosen by the authors of the DNS software, e.g., the software automatically downloads root.hints from ICANN to bootstrap itself.

If admins or users choose to use a different list of root server addresses (e.g., 127.x.x.x, 10.x.x.x., etc.), all bets are off.

So how do you stop ICANN from making millions posing as a pseudo licensing authority for registries? One way is to stop using ICANN's root.hints and use a different root.zone that you control. If enough people do this then one day ICANN has no relevance.

Right. Not gonna happen. I'm probably one of only a small number of users who will ever run their own root.

Having worked for a registry ICANS technical requirement are a lot more than just throwing up a single AWS instance.

For .coop we had to have fully redundant servers (ie < 99.9999 uptime) on 4 continents

Well, for new applicants they have to go through the Swedish Internet Foundation testing.

https://www.iis.se/vad-vi-gor/pdt/#PDT_eng

Disclaimer: I work for the Internet foundation in Sweden.

The problem is that DNS-as-a-global-naming-service is only useful because more-or-less everyone agrees that for a given domain, it'll resolve to the same place. Therefore, to change away from ICANN's authority, you have to get every user of DNS to agree to do so.

Now that they opened the floodgates I kind of think this is the end of it, though? The number of decent candidates for a new site has skyrocketed (to the point of there being too many even to guard against from domain squatters for many companies), and thus value of new TLD's plummeting?

Namecoin tries to break that monopole by using a p2p database with a blockchain like bitcoin.

So far without any success :)

That is because it still relies on paying for the domain.

The Tor network can "register" and address ( call it a pointer, because it's basically a hash ) for .onion. That means if you run the the tor service, you have a pointer, and this is probably a good solution.

So if we'd all had a distributed global "dns"-like network, where each and every system gets a unique id this would partially be solved, for free, but the requirement for master nodes (like tracker servers for torrents ) would probably still be present.

The problem with this approach is that obviously you can't make a choice for xyz.mydomain, because there will be at least someone else who wants xyz.mydomain, and in this case, who and how would decide which of you can have it? Right now this decision maker is money, which of course is an issue, but at least a solution.

So: does anyone have a distributed, fair solution, that is able to solve disputes and act as a replacement for dns? So far I'm not aware of any.

Because ICANN is responsible for overseeing the DNS root servers, and those roots are always used by ISPs as a matter of convention.

If you made your own DNS root and got folks to adopt it, you could make your own TLDs as well. Folks have tried in the past, none have really caught on (outside of a few specialized services, like .onion for Tor).

There's a pretty interesting book about the formation of ICANN called Ruling The Root if anyone wants to read about it further.

Amazon link:

http://smile.amazon.com/Ruling-Root-Internet-Governance-Cybe...

To be fair, someone has to be responsible for deciding which TLD's should exist. Since the modern internet as we know it came from the ARPANet, the US government (specifically the USDoC) formed the ICANN to privatize the management of the public DNS system (they also sit over the IANA by contract from the US government at this time) - everyone else just fell in line and went with it.

> someone has to be responsible for deciding which TLD's should exist

Why? Why can't we have as many custom TLD's as we want? Or why can't my blog just end with .helloworld if I decide to do so?

You can. But if you want it to be resolvable by everyone in the world, it needs to be added to the root servers, which are controlled by US DoC/ICANN.

> Why? Why can't we have as many custom TLD's as we want? Or why can't my blog just end with .helloworld if I decide to do so?

You can do whatever you want, but the internet runs on consensus and if consensus devolves into everyone doing whatever they want then DNS doesn't add anything beyond just using raw IP addresses.

my.stupid.web.s.i.t.e

Is ridiculous and an example of something I think should be avoided, but even it has added value beyond a raw IP address

If you really want to stick it to "the man", you should just use the raw IP address for your blog and forgo the domain name! ;)

Ah, but your provider got those IPs from one of the regional registries* (ARIN, RIPE NCC, etc.), who got them from the IANA, which is a division of...ICANN!

(* Unless it's a legacy IPv4 allocation that predates the RIR system.)

someone needs to manage a tld just like and for the same reasons someone needs to manage a domain...

The US government. Someone else will be able to explain. I just read a bunch about it and am still extremely confused.

I'll just leave this quote:

> The Internet Corporation for Assigned Names and Numbers (ICANN) is the private sector, non-profit corporation

DNS admins who use the standard root.hints -> owners of those IP blocks -> administrators of those servers.

It's essentially the same attention-consensus-economy game that web startups do, but earlier, more primitive, and deeper.

They're now arbitraging the trust which got them to this point.

They gave it to themselves.

Because USA.

Nobody tell him about banks and fiat currency. Let this one sink in first.

No, actually. The sum for the TLD. is actually split between the other bidders for that gTLD.

So if you had applied to bid, and lost out on .blog, you would have gotten an equal share of the money that Automattic paid to be the owner of the TLD.

> We wanted to stay stealth while in the bidding process and afterward in order not to draw too much attention

Why, because a major blog host owning the .blog TLD would appear anti-competitive?

It could be worse. Google (DBA "Charleston Road Registry") had a bid in to purchase .blog and make it only usable for Blogger (= Blogspot) blogs:

> This Google Registry service causes the domain name to be associated with the Blogger service, so that DNS for second-level domains (SLD) within the TLD will automatically resolve to the relevant Google service. [...] Client-initiated updates to the name servers for the domain name will not be accepted and the server will respond with an error type 2304 - “Object status prohibits operation”.

https://gtldresult.icann.org/application-result/applications...

You nailed it. We wanted the TLD to be open, and anyone will be able to use it regardless of whether they use WordPress or not.

So would WordPress/Automattic be able to limit .blog to only be used for WordPress sites?

No. The terms that the TLD was created under ([1]) effectively establish it as public.

[1]: https://gtldresult.icann.org/application-result/applications...

It's not like it's a concern for ICANN, Google owns .search, .ads, .dev, .app and more.

.dad and, yes, .foo!

.google

Probably to avoid having others enter the auction, driving the price up further.

Huh:

"How much will a .blog domain cost?

While not yet finalized, domain registration prices will be in the standard range for new top-level domains, with some premium pricing for higher-value names."

No longer 'first come, first served', now "How much you got?". Isn't registration supposed to be egalitarian?

I've seen several "new TLD's" do this pricing scheme. Typically they come up with some kind of pricing algorithm for "premium" domains by seeing if the word is in the dictionary and how often it's used in everyday language.

Things like "business.blog" will fetch a price that'll likely be in the 4 or 5 figures a year for the registrant.

This makes sense to me. Some domain names are worth more than others. gaming.blog will probably have a lot of value, while ilikegrasshoppers.blog is not worth very much. I see no reason why these things should be assigned the same arbitrary value when it is clear their values are not equal.

> gaming.blog will probably have a lot of value

I'm not sure about that; many everyday users I know are now wary of 'general' domain names and see them as spammy or suspicious.

In the UK B&Q has to remind us that diy.com is actually their retail website and not some ad-ridden "answer aggregator"

Elan is a credit card provider in the US, and the domain name for their web panel is "myaccountaccess.com". This is not as cool as they think.

Aside from download.com and weather.com, I can't think of too many generic domain names that have picked up any traction. They actually come off as sketchy to me and many seem to be held by speculators looking to sell. I don't see the value.

pizza.com and sex.com. Two things the human race cares a lot about.

Pizza.com was sold for millions http://www.cnet.com/news/pizza-com-domain-name-fetches-milli...

So was sex.com http://www.businessinsider.com/the-20-most-expensive-domain-...

He wasn't commenting on the price. He was commenting on the actual traction that the website's have generated.

As in, how many 'generic' domains are actually being used to their potential?

Has anyone ever ordered from Pizza.com? (Or manually put that in their address bar other than right now?). I think you'd be surprised how low that number is.

That's a good point. I'd guess that sex.com is doing fine but pizza.com website seems like one of those ad only squatter domains. I googled Pizza and they were nowhere to be found in the search results. I wonder how they're doing.

I use domain.com regularly.

That's fucked up. At least with normal domains you pay 10$/year after buying it for whatever amount.

This just screams for these new TLD buyers to extort customers. Imagine if that happened with .com. Nice domain you have there, Facebook. What is facebook.com worth to you on a yearly basis?

Don't buy domains whose TLDs are run by private corporations.

I hate that this is even allowed by ICANN rules.

Why, out of curiosity? Is first-come-first-served really any better?

Yeah. One you pay a million bucks for a domain, it's around 10/year after that.

At least it's fair. Part of what makes the Internet amazing is the typical cliche that anyone can come out of nowhere to disrupt huge business. This seems like a slippery slope where you have to be able to pay to play.

I kind of disagree, since I am young I would never have the change to register a nice, generic domain name.

I'm in my late 20's and I've never had that opportunity myself either; not with the original TLD's at least.

However, with these new TLD's coming out, you do have that chance, as long as the pricing is fair. If .blog is announced and it's $10 per domain, you have the same chance anyone else does to snag "gaming.blog". However, if that domain is considered "premium" and costs $10,000 to register, well... that really limits potential buyers to those that have deep enough pockets to afford it.

No - which I didn't proclaim it is. But it seems somehow a bit fairer thant prime-pricing.

/"Isn't registration supposed to be egalitarian?"/

Not anymore, no. There was an outcry at the creation of generic TLDs back in 2008, but it wasn't loud enough or important enough and the community lost. It didn't help that it benefits most those that would have been most powerful to stop it: large corporations.

it's like 'used' book sales.

publishers of 'books' would prefer you buy them new so that they can collect the actual profits.

they don't really earn more than 10$ per year on the sale of 'Exclusive.com' given that someone probably registered it in the 90's for 10$ and they're selling it in a private sale for thousands or millions of dollars.

---

Obviously this is not amazing, if it was 'first come first serve' domain squatters would do the same thing anyways.

It's not really like the 90's any more, once 'domain squatting' was invented, it doesn't really matter if you make new TLD's, there squatting will still exist on the shortest/simplest names.

Why is "I got there first" (not to mention "I got there first and grabbed a bunch of good names") more egalitarian than selling things that are obviously more valuable for more money?

What does it mean they purchased .blog TLD?

Does this mean they bought every single domain that ends in .blog?

Effectively yes. Basically, they own the TLD and can sell any domains under that. So, if you want thechthrowaway.blog, you've got to pay them to purchase it. In reality, you will probably purchase this from godaddy or similar, but ultimately they own the namespace and set the price on the cost of the domains.

One way to combat this kind of thing is to just not own any domain names whose tlds are owned by private corporations.

You prefer state controlled?

Yes. If one country tld is unacceptable you can use a different one. There's lots of options.

Couldn't you apply the same principle to TLDs controlled by private companies? There are lots of options.

To clarify, I'm perfectly ok with a private company managing a state controlled tld.

But then you have two possible points of failure.

So... all of them, ultimately?

They purchased the right to issue domains under that TLD as the registrar, I believe. That means they can set and collect the price for domains registered.

It means that Automattic gets a share of every .blog domain sold or renewed, and gets to enact policies around what .blog domains are available (like, can you register emoji in domain names) and other arbitrary restrictions about what can be hosted on the TLD (for example, Google was also bidding on .blog to restrict it to only Blogger sites -- but Automattic bid against them so you can do whatever you want t with your .blog)

Basically, it's an investment both in an open web and in a return on investment over the long term depending on volume of registrations.

The registry ..

I would assign anything hosted on .blog a huge reputational hit. But the fact that so much money was put behind it makes me think of two possibilities:

1) Auttomatic has far more money than sense, or 2) I am out of touch with the way other internet users assign value to domain names.

It's entirely possible that the second one is true. I've been using the internet for twenty years now, so I really have no idea how meaningful other people find particular gTLDs.

I think that in your head you're comparing this to buying a single domain name, e.g. playing 19 mil for blog.com or something, but it reality Auttomatic is really paying to be the registrar for .blog domains. I can imagine a lot of reasonable people paying $19 a year for a myname.blog website.

> I can imagine a lot of reasonable people paying $19 a year for a myname.blog website.

Why would a reasonable person do that when they can do something similar with blog.myname.com (and the like)?

I don't know how the new TLDs have been perceived, but I certainly would prefer a nice sounding myname.com than a website on any of these newfangled names.

Well they have raised over $190M, and I don't see them spending it on marketing like Wix, Squarespace, Weebly, and GoDaddy. At least I haven't seen any ads or anything. Maybe this is their marketing budget?

This also means that automattic can take down your .blog if they don't like you.

This is true for any TLD. Just instead of Automattic it's either another company, a country, or some overreaching US agency (FBI took over .com domains in the past)

Just look at Sweden taking down ThePirateBay.se

Wow 19 million for a couple of characters, that are an impish abbreviation of 'web log', for virtual placeholders. Does anyone even use the word blog anymore? It sounds soo last decade. How very odd. These vanity domains just don't do it for me, and this is one of the better ones.

Should we start other TLDs for .vlog and even .wlog?

.diary, .journal, .thoughts, .musings might be a better choice ;).

I recall a while back that based on this new TLD scheme, it was mentioned that ICANN pocketed a tidy +USD100M from it.

What ICANN needs this money for, I'm not sure...

They should send a bottle of wine to Peter Merholz :) http://www.peterme.com/archives/00000205.html

Is it possible to create 2-letter TLD's instead of .mycoolbutreallystupidtld or just plain .bullshit TLD's?

There are plenty of unused 2-letter TLD combos around, why bother with .blahblah ?

All unused two letter combinations are reserved for country-code top-level domains. This is to ensure future countries have the ability to have their own TLD. New countries are created perhaps more often than you may think, on average about one per year or two.

What is wrong with wordpress.com?

Is that the best use of funds?

Why not put at least 1/10th of that money into just providing a sliver of love to their big breadwinner Wordress VIP?

Charging more for some domains than others. I am disappointed.

Why? What intrinsically makes the value of all domains equal?

Intrinsically they cost less per instance for each new one registered. It's externalities - like demand, marketability, pronouncability, fashion, coincidence with trademarks - that allow them to be sold at high prices.

The web has been historically very democratic and ICANN's dicking about with internet domain names is one of many things that seems to be moving increasingly away from that ideal.

Hooray! More Wordpress websites

Heh, I don't know why it's at all surprising but I, for some reason, expected there to be some kind of restrictions regarding TLD ownership/providership.

I really dislike this, that a single entity owns a TLD when they don't have any justification for it other than 'we bought it'.

At least 99% of other TLD's are maintained by countries/orgs/etc. who at least have an arguably justified ownership.

Private entities owning all TLD's here we come.

Here comes the end of any potential anonymity that DNS provided.

ICANN began the process for this in 2008 and the first gTLDs were sold in, I think, 2012(?). However, yes, you're right, private entities will end up owning all of the TLDs and it will put likely startups at a disadvantage to incumbents as they become more common.

Who do you think owns .com? All the new ones, and some of the country codes, are companies.

You can't just go out tomorrow and buy a TLD - there's a whole process to prove you have the technical capabilities and financial capital to run the operation.

Verisign owns both .com and .net, so that's not a new thing with gTDLs.

Neat: a new way to waste 19 million dollars. Silicon Valley just keeps innovating.

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