What If a Domain Registry Shuts Down? | DomainInvesting.com
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What If a Domain Registry Shuts Down?

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I saw a thread on a .Mobi domain discussion forum that posed the question, “When will dotMobi shut down?” I know discussions about certain domain extensions are always hot button topics, so I want to refrain from the discussion about specific extensions. However, I want to ask if you have ever considered what would happen to your domain names if a registry were to shut down? I’m not talking about a registrar like RegisterFly.com, but a registry that manages an entire domain extension.

Think this is far fetched? Apparently there were issues related to the company that operated the .Travel registry, and with the potential for a significant amount of gTLDs possibly forthcoming, I believe this will be an eventual issue that domain investors need to consider when purchasing domain names. John Levine discussed this in a blog post back in 2007:

“Given how small .travel is, the resolution is less important for what happens to this particular domain than for the precedent it sets. If ICANN ever comes through with all the new domain names they’ve been promising for the past decade, sooner or later some domain will do a bubble, get wildly successful while firmly cash negative, then run out of money and pop with a million registrants in limbo. That’ll be fun.”

I am in complete agreement with what Levine said above. I’ve received a number of press releases, Facebook fan page requests, and other emails indicating that there will a ton of new extensions. Some potential extensions right now include .horse, .eco, .sport, and even .zulu, mentioned by ICANN CEO Rod Beckstrom.  In my opinion, it is likely that there will be gTLD extensions that fail due to financial circumstances.

I don’t see a reason why anyone would want to operate a money losing registry, and this could happen if an unpopular gTLD extension is approved and it isn’t embraced by the public. This could be especially prevalent if consumer adoption of gTLD domain names isn’t as quick as many people hope.

When you buy domain names, have you ever considered what will happen if a domain registry shuts down due to a financial problem? This is another good reason for you to become knowledgeable about ICANN. Andrew discussed it before, I and I want readers to be aware of the potential issue.


About The Author: Elliot Silver is an Internet entrepreneur and professional domain investor. Elliot is President of Top Notch Domains, LLC, a domain investing company that has sold seven figures worth of domain names in the last five years. Elliot is the publisher of DomainInvesting.com.

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Comments (15)

    Mike

    Good post. I think this will be a significant problem within the next few years as gTLD’s expand then decline. ICANN says they are taking heavily into consideration a companies financial ability to fund and keep a maintain a registry. Only time will tell how successful they are.

    August 13th, 2009 at 1:39 pm

    Kevin

    In every business investment you should always plan for the worst case scenario risk that a key component of your deal could fail and thus prevent the entire deal from working.

    Look at the foreign gTLD’s as an example. Let’s say you cut a big deal direct with the leader of a country in Africa like was done on .cm squatting originally and then that leader is removed from power and the next chief in charge says new deal time gentlemen.

    So I’d say you’re exactly correct with your risk assessment for all the new gTLD registrys coming out next year. A few will make it, most will fail financially and be gone within a year or two or three.

    August 13th, 2009 at 1:53 pm

    Jamie Parks

    Another reason why .com domains will always be king.

    August 13th, 2009 at 1:59 pm

    Luke Weyrauch

    ICANN needs to let the free market prevail. The big question one should ask is, if ICANN will be ‘approving’ new TLDs, will they also then be responsible when a new TLD fails.

    August 13th, 2009 at 2:28 pm

    Patrick Jones

    Elliot,

    This is something ICANN has been working on for quite some time. ICANN has a dedicated page on the ICANN gTLD Registry Continuity Plan at http://www.icann.org/en/registries/continuity/. There are also a number of questions in the draft Applicant Guidebook for new gTLDs related to registry continuity.

    Patrick

    August 13th, 2009 at 4:28 pm

    Elliot

    @Patrick

    Is a domain extension’s viability something ICANN will consider during the approval process? For example, if I am the only person to apply for the “.SilverFamily” extension, will ICANN evaluate whether I will probably be able to afford to keep the registry active in perpetuity? For example, if I am awarded that extension, and I register Me.SilverFamily and my brother registers Scott.SilverFamily, what will happen to Scott.SilverFamily if I have a hardship and can’t keep the registry open?

    The reason I am asking is because I just can’t imagine enough people registering domain names with some of the proposed gTLD extensions, and it would seem that the few people who do register domain names in those extensions could lose out on their domain names and branding if a registry fails and nobody else wants to take over that registry.

    August 13th, 2009 at 4:34 pm

    us virgin islands

    That’s exactly what we had discuss on a forum about the dot pro extension witch have some problem with registration because they have a restriction on it (must provide professional license) may 2010 will be the end of contract with Registry pro and Icann if my source is right, of course they will renew contract that cost $$$$$$ because they have no choice since many have invested on .pro and must be their last chance to survive so they will soon release 2 and 3 letter .pro but how, I don’t know maybe auctionning or premium price (like .ws and .tv) anyway they better remove their restriction and lower price for reg. I’m not scare for .mobi but for some like .travel, .pro,… Even the newly launch .cm will become a flop, you know the reg fee price for .CM? Not worth buying. It reminds me the .TM tld that requires a $1000 fee reg to secure for several years.
    I think it’s stupid that ICANN wants to release other kind of TLds like .eco .nyc, .green…. It’s enough with what we already have.

    August 13th, 2009 at 4:36 pm

    Antony Van Couvering

    Hi Elliot,

    Good question you pose. Luckily there’s a good answer. If you apply for a new TLD from ICANN, you will have show “business continuity,” which means keeping the registry going if you fail. The aim here is to make sure that the registrant isn’t harmed by the fact that you didn’t plan correctly, or if there is something beyond your control.

    ICANN asks for financial guarantees (for 5 years!), and in the case of Minds + Machines, we are pursuing mutual arrangements with other registry providers so that we would take over the running of their TLDs if they fail, and vice-versa.

    I have some criticisms of ICANN, but in this case they’ve done a very good job.

    Antony

    August 13th, 2009 at 4:42 pm

    Patrick Jones

    The Applicant Evaluation looks at technical, operational and financial criteria. There are questions on business continuity, as Antony notes. The gTLD Registry Continuity Plan also has a process for TLD Transition in the event of failure, or closure of the TLD if that is necessary.

    August 13th, 2009 at 5:30 pm

    johnny D

    You never know. Your not losing much if the extension is that bad. As far as .mobi goes that will never go away, it will look much better when all these other ones come out.

    Some say iphone is .mobi killer. Well what are you going to do if iphone only works with att. Very limited. >what happens if .mobi tech changes? Its all about the cell phone and having something that is open source.

    August 13th, 2009 at 5:48 pm

    marko

    in my ho . mobi is dead
    i have purchased 250 plus names ,there has been no media attention to it ,new hitech phones will add to its demise,and after asking dozens of users of mobile phones only 2 percent or so know what .mobi is about .
    its sad for me and also for other investors and .mobi itself,but at the end it does not provide a real need with tech moving forward so very fast..
    i am afraid thats my conclusion.

    August 14th, 2009 at 5:51 am

    Jamie Parks

    @marko Feel free to push any of those ‘dead’ 250 .mobi’s to me anytime…

    August 14th, 2009 at 12:10 pm

    Vance Hedderel, Director of PR, dotMobi

    While it’s not the **point** of this blog entry, I want to make sure that everyone knows the .mobi domain and the dotMobi registry are not in danger. Frankly, I’m not even sure why an idea like that arose.

    The .mobi domain is the world’s 6th largest top-level domain and the .mobi domain is sold by every large registrar in the world. The .mobi registry – that’s to say, the dotMobi company – is bigger than 95% of the world’s ccTLD registries.

    The .mobi domain registry is already profitable, given our size. And that’s what allows us to invest in products like our award-winning DeviceAtlas and acclaimed Instant Mobilizer, which led Entrepreneur to name us as one of the world’s 100 brilliant companies in May 2009 (http://www.entrepreneur.com/startingabusiness/businessideas/100brilliantcompanies/article201820.html).

    Products like these help content owners build mobile-ready sites. And after all, without mobile content, there’s not a lot of reason to try to identify it with the .mobi domain.

    August 16th, 2009 at 11:39 pm

    Antony Van Couvering

    I agree 100% with Vance. .MOBI is in fine shape, with about 1.2M registrants. It’s not the size of .COM, but it’s doing very well.

    There are a lot of ways to define success. As long as the registry is financially and technically stable, success is what the registry — and users — define it to be.

    August 17th, 2009 at 11:16 am

    Udegbunam Chukwudi

    My question is what happens when the domain registrar that registered your domain for you, goes out of business? Is that domain name lost forever?

    September 1st, 2009 at 9:03 am

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