Apr 24, 2010

Domain'ing is Annoying

The way in which domain names are allocated seems broken to me.  Speculators register domain names for a very small amount of money ($6/yr for .com's, sometimes pennies for some ccTLDs) and then refuse to give up the rights for anything less than $10,000.  The domains are worth more than the registration cost to someone who would actually use them, but less than the squatter price.  As a result, excellent domain names go unused (parked) while good content creators with low budgets end up with stupid domain names that nobody wants but which are affordable.

A strawman proposal for fixing this:
Instead of a flat $/yr charge for domain names, charge based on demand.  If a user comes along to the registrar and wants to buy an already used domain name, they can file a bid with the registrar.  The registrar records and authorizes the charge for the bid, perhaps even taking the money into escrow.  At the same time, the current owner is contacted.  The current owner can now choose:

  1. Accept the offer, sell the domain name.
  2. Accept an immediate increase in the annual registration fee for that domain name of 5% of the offer price.
So for example, I might bid $1,000 for greg.com.  The owner of greg.com doesn't have to accept my bid, but if they don't, the registration cost rises to $50/yr.  This should make them less inclined to squat.  More valuable domain names will end up with a higher registration cost and worthless domain names will end up with a potentially lower registration cost.

The 5% is just a random number.  Tweaks might include a some cap at $500, or having the percentage decrease as the offer increases so that the registration fee for google.com or whatever isn't astronomical.  Perhaps reduce the percentage the longer the current owner has owned the domain as changes in identity are undesirable.  It also seems like you might want to have registration fee hike exceptions in some cases, such as trademarks.  Lots of options available.

Where should the extra registration money go?  The registrars don't deserve most of this.  I'd probably put it towards public projects to build better planet-wide network infrastructure (fiber in the ground) or something.

1 comment:

Ashish said...

I agree that the domain system should change. But don't agree with your solution of bidding. This way only big companies with top $$$ will own the domains.
But there could be some quality guidelines which can be added like if the domain/site has been inactive for a certain time then allow other people to bid on it.