Re: John Palmer

[Kent Crispin <kent@songbird.com>]

An interesting discussion, Leo.

Leo Smith allegedly said:

[...]
> The market for the new gTLDs depends on
> their "value", which, in turn, depends on the letters. For example, if IAHC
> issues 7 new gTLDs of .law, .music, .medic, .sex, .toys, .soda and .medic,
> then marketability  might be tremendously greater than if the new gTLDs
> were .pqa, .fza, .err, .swlm, .ttdv, .mox and .krka. 
> 
> At this point, without knowing what 7 gTLDs will be selected for use, it is
> impossible to define the market size for them.

Even with foreknowledge of the 7 gTLDs names I don't think it will
be possible to make a meaningful estimate of their value.  It would 
be easy to be off by a factor of ten.  And the names will probably be 
known before it is necessary to commit to an application.

[...]

> Once the market size were estimated, the 20 to 30 registries would take the
> even more important second step of developing a business strategy for
> capturing a sufficiently large segment of the market to justify the
> investment needed to create the registry. Without an exclusive right to a
> particular gTLD, and with all registries sharing the same bank of available
> gTLDs, market share will be determined by expensive and aggressive
> advertising and promotion.

I don't think so.  I think quality of service and price will be what
determines success, not advertising and promotion.  And most of the
advertising and promotion will undoubtedly be over the web.  

> Of the 20-30 new registries, no all will be
> bankrolled equally. More deep pocketed companies may engage in costly
> marketing campaigns, for the same reasons that AOL recently spent over
> $150,000,000 in advertising to capture 330,000 new subscribers.

That's almost $500/customer.  Any registry that spends that much 
money per customer for advertising will lose a *lot* of money.  In 
general, I think that aggressive marketing is an inappropriate 
strategy for success in the registry business.

But I think your premise is wrong -- registrars won't differentiate 
themselves by marketing, they will differentiate by appealing to 
natural segmentation in the market.  For example, a French-language 
registry has a natural market without needing much advertising.

> Registries
> not able to financially afford the aggressive marketing campaign will face
> a steep climb in their effort to gain marketshare. The likelihood of
> registry failure in the SHARED environment is greater than it is in an
> EXCLUSIVE one.

1) You have not made a case for this.  2) It doesn't matter anyway.  A
failed registrar in a shared registry is a relatively minor event, in
terms of customer impact, compared to a failed registrar in an
exclusive registry.  In any healthy capitalist system a substantial 
fraction of business fail.


-- 
Kent Crispin				"No reason to get excited",
kent@songbird.com,kc@llnl.gov		the thief he kindly spoke...
PGP fingerprint:   5A 16 DA 04 31 33 40 1E  87 DA 29 02 97 A3 46 2F