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Guest Post: Why IDNs Should Matter to Domain Investors

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Gold Mining

My wife and I had dinner the other night with Aaron Krawitz and his wife, Emily. Aaron and I met at a New York domain investor get together, and not only are we both domain investors, but our wives are in the same year of graduate school working on a similar degree. Aaron is an Ivy-League graduate and currently works at a prestigious New York firm.

While our wives talked about internships and the field of Psychology, Aaron and I talked about domain names and investing. Aaron has significant IDN domain name investments, and I know next to nothing about them. I asked Aaron if he would write a guest post about IDNs so I can share with my readers why he and others are so passionate about them. Aaron and his business partner, Gary Males, wrote the following. Hope you enjoy.

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Any domainer worth his salt knows the history of the pioneers in the domain industry and how in the 90’s they took a risk on buying generic domain names.  Back in the pre-Google days, there was no business model, no parking, no affiliates, no monetization – you have to admire these innovators as they took a calculated risk and have been rewarded.

How many domainers have found themselves wishing they could have done that or that they could go back in time to the 90’s?  IDNs are exactly that opportunity.

There are 100+ million domains registered today; and the majority of these are in English.  There are only 1 million IDNs registered, and that is across ~200 different languages.  Do the math – that means there is tremendous opportunity.

It’s like a 1990’s Groundhog Day, but with the benefit of knowing you can monetize domains and there is end-user demand for virtual real estate.

So what are Internationalized Domain Names (IDNs)?

They are domains that contain at least one letter not found on a traditional English keyboard.

IDNs really make a difference in countries with languages that do not use letters based on the English language; countries like Japan, China and Korea whose languages consists of symbols.  In contrast, in Spanish, French or Portuguese, it is easy to avoid IDNs and to simply substitute unaccented letters.

In these countries where the language differs so much from English, and also coupled with a nationalistic population, you can begin to see why users would use their native language over English, which is where the IDN advantage is.

As you start to take a closer look at other languages, you begin to see some unique properties that spell another opportunity.  Take for example the Japanese or Chinese language – there is no such thing as plurals, so every Japanese or Chinese term doubles up as both the single and plural version.  In other words, 2 for the price of one.  Also some Japanese words mean the same thing in Chinese, so from a domainers perspective your one domain registration now, not only means the single and plural, but it can also reach the combined population of China and Japan (1.5 billion) people – that’s 5 times more than the U.S.

Japan as an example has a very vibrant ecommerce industry, but to date, had no real use for English domain names they cannot read or remember; so what do they do, they don’t advertise the domain name, they advertise by displaying an image of someone searching in the search engine with a Japanese word, and then just buy the Adwords for that Japanese word to try and capture the searcher.  Sounds a little strange to us, when we are so used to seeing domain names in every walk of life – but that’s how it has evolved.  Domain names and IDNs definitely have a branding advantage over search box advertising.

Early domain pioneers took risks in the 1990’s not knowing what the future would look like; so what are the risks for IDN investors?

The single biggest risk, all surrounds IDN.IDN – in other words, today IDNs can be registered in .com .net .org .info .cn .jp etc – but the real benefit of IDNs is in full IDN, that is, the extension in foreign language too.

ICANN has been struggling with this for years, and will soon be inserting the first IDN extension in the root.

Dot com IDNs will remain valuable in most language as the dot com is a recognizable brand easily typed on foreign keyboards. Switching from a foreign language to English to type the “.com” is second nature, just as you or I shift characters to capitalize while typing a sentence.  In countries such as Japan, dot com is many times more popular than their ccTLD, and there are many examples of companies branding on an IDN.com.

If you still believe that an IDN extension is the holy grail to IDNs, then you can take comfort in a white paper released by Verisign that states that they intend to make available transliterated IDN versions of “com” and “net”, and alias them to the non-IDN version. This is the ideal solution after all, it provides full IDNs but leverages the brand of “com” etc that everyone is so accustomed to.

With hindsight, we all know what we should have done 15 years ago, but most of us didn’t do anything…so given what is most likely the 2nd and last domain gold rush opportunity, this time with IDNs…what will you do?  There is a risk, some say minimal, some say calculated, but the size of the prize should be enormous; this we know from the current high traffic levels on IDNs.

Another reason why people tend to shy away from IDNs is because investing in foreign markets can be accompanied by a steep learning curve, especially if you do not speak the language. With this in mind, we have launched the first 2 dedicated IDN services:

IDNnewsletter.com – A subscription based, hand picked list of our members’ top IDNs for sale, and all of the IDNs listed will have been certified by a native speaker.

IDNtools.com – a set of IDN measurement tools, drop lists and translations.

This guest post was written by Gary Males and Aaron Krawitz, co-owners of IDNTools.com and IDNNewsletter.com.  You can also follow Gary and Aaron at IDNDemystified.com and at IDNBlog.com.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


Reach out to Elliot: Twitter | | Facebook | Email

Comments (35)

    Aaron

    Thanks for including the post.

    October 27th, 2009 at 2:06 pm

    Helder

    I also believe that IDN’s have a bright future, specially in asian, and eastern european countries.

    Germans also seem to like IDN’s, and as a Portuguese i can tell you that we would like to write with accents in our browsers and SE’s. I believe that French and Spanish feel the same way, nationalism always has some weight, and i believe everyone Loves, and are proud of their own language, after all is one of the most precious things we all have, no matter where we’re from.

    However there’s one thing on my mind, that has been holding me back from buying IDN’s, and i would like to have your opinion. Everyone usually says to stay away from ccTLD’s when you don’t know the language, because without knowing the language one can make mispelling mistakes registering, one can’t develop the domain unless you hire a translator, it’s always harder to contact end users to sell, and it’s hard to contact advertisers, the language and lack of knowledge of a market, culture, mentality etc… can be a real obstacle

    All this i believe also applies to IDN’s, not knowing language, end users, market etc…

    What’s your opinion on this? and what advice would you give to overcome this situations?

    Thank you very much

    October 27th, 2009 at 3:12 pm

    Aaron

    Helder,

    I agree that a major barrier entry is not knowing the language in which you are registering.

    To overcome this obstacle, I would suggest that you use a trusted native translator.

    As good native translators are hard to find, one of the features IDNNewsletter.com has is that all names we sell are certified by a trusted native translator so that the buyer knows what he/she is getting.

    Similarly, from the sellers point of view, it can be tough to sell to native end users. That is why we are offering our newsletter in multiple languages, and we are reaching out directly through marketing and personal connections to connect with native end users.

    I believe that if there are barriers to entry, rather than not enter, it is our job to knock them down.

    October 27th, 2009 at 3:26 pm

    Lidador

    Also don’t forget to visit idn.bz top 10 lists, the estibot of IDNs, to get a glimpse of the what makes a premium IDN.

    October 27th, 2009 at 3:34 pm

    Helder

    Hi Aaron

    I already subscribed your newsletter, i agree that the obstacles are there to overcome, besides it makes things a bit more interesting :)

    A good native translator like you said is the answer, to develop, to buy, to contact advertisers or end users.

    Thank you for your quick answer and good advice

    October 27th, 2009 at 3:36 pm

    Steve

    Great Article.
    It looks like the IDNs are just starting to get some serious exposure, now ( Yahoo, Wall Street Journal, CNN).
    It appears, that they will have a HUGE effect, on the internet, as we know it.

    October 27th, 2009 at 4:04 pm

    domain report

    I have some French IDN .com domains, and they do get traffic. Luckily I know french as a second language though. The good thing is the .com isn’t affected by a potential .IDN, because the French use the same letters as english. Same goes for Spanish IDN too, the .com extension doesn’t need changing to a native language. The hard part about Asian IDN is if you don’t know the language, you need a resource to let you know you are buying quality. Because Asian countries have large populations and are emerging, it’s a good market to get into with domains. Thanks for the tip on your newsletter, I will sign up.

    October 27th, 2009 at 4:47 pm

    Clotho

    To those that have done their homework and understand the implications IDN’s are a no-brainer. The language barrier is a significant hurdle but if you make good use of all the tools at your disposal it becomes pretty clear when you have a good term. Many have amassed significant portfolios without access to a native speaker but if you are uncertain there is no doubt that a native speaker is the way to go.

    Having a tool that facilitates sales across multiple languages is a brilliant idea and is sure to gain wide acceptance.

    I look forward to receiving your publication!

    October 27th, 2009 at 4:52 pm

    Doña O

    Interesting article, though somewhat inexact from a linguistic point of view. Indeed, knowing what you’re gonna work with to some extent is a must.

    Japanese and Chinese do not use “symbols” but characters. The ones in which both languages would coincide (Chinese Hanzi vs. Japanese Kanji) might just *not* coincide, since most of Continental China adopted the simplified script in the 20th Century.

    Korean’s writing system is not made up of symbols either: It is phonetic.

    Some Indoeuropean languages are mentioned in the article (Spanish, Portuguese…). The author points out that these cases are different, ’cause you just don’t write an accent and it’s the same. This is also inexact. These languages have also special “symbols” that really make a difference in a word’s meaning. Take for instance the Spanish “ñ” and what a difference it would make to register the domain año2000.com (year 2000) or ano2000.com (asshole 2000). Accents are there for a reason as well.

    I do not think this has to do so much with nationalism, and much more with what comes natural to the citizens in a given country. Imagine having to register English domains using the Cyrillic alphabet?

    Just two cents from a linguist. Excuse my spelling and writting as I am not an English speaker, and I am using the phone.

    I

    October 27th, 2009 at 4:55 pm

    Gary

    @ Doña

    Thanks for taking the time to write.

    You are quite correct of course; my use of the term “symbols” was a linguistic inaccuracy, but one hopefully that got the point across to those unfamiliar with other scripts. My messaging was simply to highlight that some languages do not use the ascii character set (a-z), or indeed letters visually similar to the English alphabet.

    To your point about languages coinciding, there are many examples in my portfolio of terms that do coincide (Traditional Chinese vs Japanese Kanji), and I also have a few where they coincide with Simplified Chinese too (as you know, sometimes the Traditional and Simplified are if you like one and the same)

    I think the takeaway from all this as you have further highlighted, is that dabbling in languages foreign to you can be a minefield; it’s for this reason why IDNs have largely been passed over by so many people – and it’s just this that we are trying to address. There is a lot of untapped opportunity out there in the IDN space, and those that have the skill sets or access to resources will do well; we hope that by working with native speakers in validating the linguistic properties of non-English domain names, we can overcome that obstacle.

    @ Elliot: thanks for the air-time.

    October 27th, 2009 at 5:33 pm

    steve epstein

    Elliot, Aaron, and Gary….

    thanks for the blog, the guest post and comment…

    full disclosure:
    and part ownership of
    idnforums.com …

    but let’s go straight to korea…

    Here is the latest from Seoul relative to Russian IDN cctld
    timeframes and roadmap…

    most important point..Trademarks not in Cyrillic
    will not be protected…..

    http://sel.icann.org/meetings/seoul2009/transcript-ccnso-members-meeting-27oct09-en.txt

    from the ccnso in Seoul by the Russian registry rep:

    Next, Andrei Kolesnikov from the dot ru registry will present
    implementing Cyrillic IDNs in Russia.

    >>ANDREI KOLESNIKOV: Thank you very much. Just I’ll be really
    brief.

    So now we have about 2.4 million domains. By the end of this
    presentation, it will be 2.4161 hundred. So we really are running up
    at the high rate, but we’re also involved in the IDN launch and it’s
    just a brief update where we are.

    We all — you know, we all wait for the end of this week, of course.
    It goes without saying.

    And as soon as the fast track process will be started, we have all
    the documents already in place, ready to upload, submit, go through
    the checks, and answer the questions. And also, we accept the
    financial conditions which were presented earlier.

    So what we do within the country for this project?

    On November 2nd, which is next week, we start formal accreditation
    of the registrars who will be accepting registrations for the dot rf,
    which is the IDN for Russian Federation. Okay?

    And on November 25th, we plan to open the priority registration for
    the trademark owners who keep the trademarks in Cyrillic. It’s a
    very sensitive matter because we already are getting some letters
    from big corporations worldwide, trademark protection bureaus and so
    on, asking if they will be protected names for the Cyrillic. And we
    checked with some legal people who were, you know, good known guys.
    They said there is no — there is no entity in the world who can
    actually put a parallel between the Latin script and the Cyrillic
    script, so we will be focusing exactly on the Cyrillic script
    trademark. So if the trademark is not in Cyrillic, it will not be
    protected.

    So this period will be for the four months until 25th of March of
    the next year, and we plan, on April 12th next year, to open the
    auction in this new domain zone to keep the zone protected from the
    cybersquatters and, you know, from the bulk registrations.

    And we decided to go with the linear price, fixed price decrease
    model, which runs as one day of, I don’t know, like 10 million rubles
    for one day and then, you know, a million rubles for one week, then
    500,000 rubles for one week and so on and so forth. Between each
    week, we’ll have a one-day pass, you know, just to — to deal with
    some, you know, problems, if they exist, if they appear.

    So we probably will be ready to — for the open market price by the
    June 14th of the next year, if everything goes according to the
    previous schedule.

    And this system of the registration based on the EPP has enhanced
    security. It has special digital signatures on the time stamps to
    avoid, you know, questionable who goes first, who goes last.

    It also will support the stop-list for the offensive words which,
    you know, the Russian language is very rich in this term, so —

    And regarding the mass market estimation, how many domains will be
    registered in our IDN, we don’t know. All we know is like there are
    millions of people around the world, 140 million in Russia and the
    same in other countries, so it may go from, you know, 100,000 to 10
    million very fast, but as this is a new project, no one can really
    tell, and it’s hard to do some preliminary estimations in this area.

    That’s it. Thank you.

    October 28th, 2009 at 2:51 am

    Victor

    One of the best ccTLD’s is Dot FM. Easy to remember and one can use it for fm radio station, farmers market, family matters, future markets, and so on…….

    October 28th, 2009 at 11:02 am

    Aaron

    @Victor – Disagree. Dot FM is not one of the best ccTLDs, it is definitely in a different league than Dot DE for instance.

    I do not know of many who are rushing to buy Dot FM because they think it refers to “farmers market” and “family matters” as you suggested.

    October 28th, 2009 at 11:13 am

    fizz

    Hi Aaron and Gary,

    Great article. Would you kindly explain the para below in layman’s terms (a link to the Verisign doc if possible too):

    “…a white paper released by Verisign that states that they intend to make available transliterated IDN versions of “com” and “net”, and alias them to the non-IDN version.”

    TYIA

    October 28th, 2009 at 2:48 pm

    Gary

    @ fizz

    There have been many comments made by Verisign recently, but the white paper with all the detail is here: http://www.icann.org/en/announcements/dname-white-paper-verisign-17nov05.pdf

    (page 23 is a nice summary)

    October 28th, 2009 at 4:25 pm

    Jung Galicia

    You may want to read this article first published in the Domainer’s Magazine in March of 2007 entitled “The Birth of a Gold Rush”

    http://sociedaddelainformacion.com/blog/2007/03/20/articulo-de-marzo-2007-del-domainers-magazine/

    October 28th, 2009 at 5:26 pm

    fizz

    Many thanks Gary – I’ve also signed up for your newsletter and looking forward to IDN developments.

    October 28th, 2009 at 5:32 pm

    Michael

    @ fizz

    If you are the registrant of i.e the Russian domain name Book .com (книга .com) , Then you are the only one entitled to get the 100% native language equivalent (книга .ком)

    In addition, due to the new ascii gTLD process delays, It is expected and anticipated that both IDN gTLD’s and ccTLD’s will remain within a reasonable time frame.

    Official documents:

    IDNG Working Group Charter
    1. Purpose
    To meet community demand and user expectations for IDN TLDs, as well as to address the potentially significant time difference between the introduction of new IDN ccTLDs and new IDN gTLDs, methods to coordinate the timing of the implementation of new IDN TLDs are being considered. While the timing of the introduction of IDN TLDs into the root is of concern, neither the full New gTLD process nor the IDN ccTLD Fast Track implementation, evaluation and associated schedules should be delayed.
    The purpose of the IDN gTLD Fast Track Working Group (IDNG WG) is to develop and report on feasible methods, if any, to coordinate and minimize the time difference of the introduction of new IDN ccTLDs and new IDN gTLDs to the root, to within a reasonable time frame. One of the possibilities being the introduction of an IDN gTLD Fast Track.

    Draft 3.1 http://gnso.icann.org/files/gnso/dra…er-16jul09.pdf

    And from yesterday’s transcript: http://sel.icann.org/node/6708

    The GNSO consistently over the — I don’t know how long, last year
    or two — has taken a position that gTLD IDNs should be introduced at
    the same time as ccTLD IDNs, or at least minimize the gap, so that
    those who have generic top level domains can experience a full IDN
    experience. And the GNSO has, I think, pretty much been unanimous in
    our support for that, but one thing that’s very helpful is for that
    message to come from people like yourself, and not just from us.
    Thank you very much. Very important comment.

    Edmon?

    >>EDMON CHUNG: Yeah. Just adding to that comment, I think it’s
    very important. I think — I forgot whether it was Mike — mentioned
    — somebody mentioned about priorities about the council’s work. I
    think we — I think it’s — it’s ‘– you know, the time is ripe for
    us to spend a little bit more time on IDNs and IDN gTLDs. I’m not
    saying that in the past, we have not. I’m just saying that there is –
    – with the — with the public relations that ICANN has done on the
    IDN ccTLD fast track, I have in the last couple of days actually
    received an abundant amount of e-mails asking about IDN gTLDs, and
    there is a certain expectation from the community that when IDN
    ccTLDs are there, IDN gTLDs should be there as well.

    So I think there’s — there’s room for work. There’s room for
    potential work here, you know, such that we could see that happen as
    soon as possible.

    October 28th, 2009 at 6:05 pm

    fizz

    Thanks Michael.

    Is there a list of the proposed ccTLDs that will have IDN.IDN?

    October 28th, 2009 at 7:06 pm
    October 28th, 2009 at 7:21 pm

    Jad

    I think it would be much better if you have some basic knowledge of the language that you’re trying to register the IDN in.

    October 30th, 2009 at 10:53 am

    Aaron

    @Jad – I would go further. It is not only “much better” to have “some basic knowledge” of a foreign language when registering IDNs, but it is absolutely essential for large $$ purchases that the registrant has a sophisticated understanding of a language and all its nuances.

    If the registrant is not a native, he/she needs to use a very trusted native translation service, such as that provided in IDNNewsletter.

    October 30th, 2009 at 11:06 am

    Mike

    great read. thank you

    @ Jung

    a quote from the article you referenced:

    “That day came in 2004 with Christian Chena, a 27 years old entrepreneur from Paraguay. Christian gave to an hispanic engineer from Chicago two domains: supernova.org and grandcasino.com. In exchange, him gave Chena juegos.com.”

    Are you kidding me!?? Talk about trading up! whoof

    October 30th, 2009 at 1:52 pm

    Michael

    There is no future for Verisign IDN aliasing initiative. The main reason is a lot of trademarks that look like “IDN.IDNcom”. If somebody (Verisign, ICANN, IDN.com holder) will begin to use such an automatic aliasing, a lot of laws suits will begin.

    November 7th, 2009 at 4:05 pm

    Aaron

    @Michael – You are right that there are likely a good number of lawsuits to follow the IDN aliasing initiative.

    While nothing is guaranteed with Verisign’s future initiative, all signs point to it happening within the next year or so, which is great for IDN investors.

    Read this article: http://blog.netchoice.org/2009/10/idns-in-cc-minor-an-unfinished-symphony.html

    November 7th, 2009 at 7:35 pm

    Micha

    @Michael
    “If you are the registrant of i.e the Russian domain name Book .com (книга .com) , Then you are the only one entitled to get the 100% native language equivalent (книга .ком)”

    You’re wrong. Let’s see: somebody [domainer] holds Книга.COM, but, at the same time, somebody else holds Книга.КОМ trademark (legally signed in RosPatent).

    How Verisign can decide that the domainer has more rights than trademark holder?
    Don’t you think it’s a trademark violation?

    November 8th, 2009 at 4:05 am

    Aaron Krawitz

    @Micha: Agreed, that there are always ambiguous trademark issues when new extensions are released. And when aliasing is introduced it will be no different.

    If someone owns a trademark to Book.nyc, before the .nyc extension is released, what will happen? Will the trademark owner get the name automatically? Unclear, but the rollout of .nyc will not be prevented.

    Same with aliasing.

    November 8th, 2009 at 1:49 pm

    Micha

    @Aharon
    “If someone owns a trademark to Book.nyc, before the .nyc extension is released, what will happen? Will the trademark owner get the name automatically? Unclear, but the rollout of .nyc will not be prevented.
    Same with aliasing.”

    No, it’s definitely not the same:
    1. If someone owns a trademark to Book.nyc, before the .nyc extension is released – Book.nyc will get the pimary right to sign the domain [I don’t think we may call this “automatically” though].
    2. The rollout of .nyc will not be prevented – agreed, but aliasing is something different.
    3. Verisign just can’t prefere domain speculants interests before the trademark holders interests. Every lawer will tell you why.

    November 8th, 2009 at 3:55 pm

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