Re: registrars the big winners?

[Kent Crispin <kent@songbird.com>]

On Thu, Nov 13, 1997 at 02:18:29PM -1000, pat forrestal wrote:
> it would seem to me that at this point the only 'winners' in the
> pre-registration sweepstakes are the registrars who stand to capitalize on
> every variation of good words in the dictionary. 
> 
> now at $50 a pop or more($30,000?), there are 86 new multi-millionaries
> being made at the expense of the duped public which can't even be assurred
> of getting their chosen domain name with so many registrars. 
> 
> what a bummer.. 
> 
> pat forrestal

It might be worthwhile to run through a few numbers, very roughly:
Currently there are on the order of 1000000 domain names.  It's very
hard to get a concrete idea of what the demand will be in the new
domains -- let's say 100000 domain names will be reserved.  The price
for the great majority will be $50, more or less.  And, just in the
spirit of rounding, let's say there are 100 registrars.  That's
100000*50/100 dollars of income per registrar on the first glut of
names -- $50000 apiece. 

Now, there is some fairly wide variability in those numbers.  But it
is crystal clear that we are NOWHERE NEAR 86 multimillionaires.  In
fact, for a business with several employees, and net expenses, $50000
is likely not going to cover the startup expenses.  And this is the
one-time startup glut -- the normal state will be much lower.  We are
talking of the income stream of a small restaurant, not a goldmine.

So forget the dollar signs.  These registrars are actually taking a
substantial financial risk, they are entering a potentially extremely
competitive business, and they aren't reaping any significant windfall
profits.  To add to that, there will be strong pressure to open up 
applications for more registrars in the not too distant future.

-- 
Kent Crispin				"No reason to get excited",
kent@songbird.com			the thief he kindly spoke...
PGP fingerprint:   B1 8B 72 ED 55 21 5E 44  61 F4 58 0F 72 10 65 55
http://songbird.com/kent/pgp_key.html