Domain Name Market Evaluation and Policy Development
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This document provides an overview of the global domain name market and internet statistics by region. It summarizes internet user penetration rates and growth between 2000-2011. The document outlines the domain name market structure and the roles of ICANN, registries, registrars, and registrants. It also lists the current generic and country-code top-level domains. Charts show trends in .com, .net, and .org domain name counts between 2004-2012 and models for naming, addressing, and routing on the internet.
Domain Name Market Evaluation and Policy Development
- 1. Domain Name Market Evaluation & Policy Development Dr. Kenny Huang 黃勝雄博士 [email protected] Executive Council, APNIC Board Member, TWNIC 1
- 2. Internet Statistics by Region Population Internet Users Internet Users Penetration Growth Users % World Regions ( 2011 Est.) Dec. 31, 2000 Latest Data (% Population) 2000-2011 of Table Africa 1,037,524,058 4,514,400 139,875,242 13.5 % 2,988.4 % 6.2 % Asia 3,879,740,877 114,304,000 1,016,799,076 26.2 % 789.6 % 44.8 % Europe 816,426,346 105,096,093 500,723,686 61.3 % 376.4 % 22.1 % Middle East 216,258,843 3,284,800 77,020,995 35.6 % 2,244.8 % 3.4 % North America 347,394,870 108,096,800 273,067,546 78.6 % 152.6 % 12.0 % Latin America / 597,283,165 18,068,919 235,819,740 39.5 % 1,205.1 % 10.4 % Carib. Oceania / 35,426,995 7,620,480 23,927,457 67.5 % 214.0 % 1.1 % Australia WORLD TOTAL 6,930,055,154 360,985,492 2,267,233,742 32.7 % 528.1 % 100.0 % (Internet World Statistics, 2012) 2
- 3. Internet Population & Penetration Internet Population Internet Penetration (Internet World Stats, 2012) 3
- 4. Internet in Numbers (Pingdom, 2012) 3.1 B email accounts (end of 2011) 555 M websites (end of 2011) 220 M total registered domain names (July 2012) 103.1 M .com 86.9 M ccTLD 14.7 M .net 9.97 M .org 800 M facebook users (end of 2011) 1.2 B mobile subscribers (end of 2011) 4
- 5. DNS & Its Working Simple view of the DNS and its working, From “The Pharming Guide” by G. Ollmann, 2005 5
- 6. Domain Name Market Structure ICANN Domain Name Authority Registries Who are managers of TLDs Registrars Companies that sell TLDs Resellers Companies that are not registrars themselves but use technology of another registrar Registrants Who buys domain names 6
- 7. Current TLD List .aero .asia .biz .cat .com .coop .edu .gov .info .int .jobs .mil .mobi .museum .name .net .org .post .pro .tel .travel .xxx (ICANN Registries, 2012) 7
- 8. 245 out of 260+ Country Codes of the World 8
- 9. Model for Naming, Addressing & Routing General Internet Routing Scheme (Bernard M Hauzeur,1986) Routing by Name (Bernard M Hauzeur,1986) 9
- 10. Analytical Framework for Identifier Resources Rationing Methods First-Come/First-Served Layer 3 : Policy DN registration Decisions about Rights Administrative Fees Layer 2 : Economic discourage those who might consume too much Decisions about Rationing Scarcity Market Pricing Layer 1 : Technical determined by demand and supply Coordination to ensure Uniqueness Administrative Rules easy to implement but unable to reflect demand & supply Merit Distribution “beauty contests” but would be intensely political (Milton Mueller, 2004) 10
- 11. Competitiveness of Industry Concentration Ratio CRm= Σmi=1 si Four-Firm Concentration Ratio measures the total market share of the four largest firms in an industry No concentration 0% means perfect competition or at the very least monopolistic competition. If for example CR4=0 %, the four largest firm in the industry would not have any significant market share. Total concentration 100% means an extremely concentrated oligopoly. If for example CR1= 100%, there is a monopoly. Low concentration 0% to 50%. This category ranges from perfect competition to oligopoly. Medium concentration 50% to 80%. An industry in this range is likely an oligopoly. High concentration 80% to 100%. This category ranges from oligopoly to monopoly. 11
- 12. Value Chain and Five Forces Model Porter’s Five Forces Model 12
- 13. SWOT Analysis 13
- 14. Decision Making Methodology: Four-Quadrant Matrix Stephen Convey. (1994). First Things First: To Live, to Love, to Learn, to Leave a Legacy. New York: Simon and Schuster, ISBN 0-684-80203-1. 14
- 15. Global Domain Name Market Overview Total : 225 Million names ccTLDs : 90.6 Million (40.2%) (Verisign, 2012) .com : 103,591,675 .net : 14,746,618 .org : 9,999,090 (2012.06.30) 15
- 16. COM/NET/ORG DN Counts COM NET ORG 2004 32,390,225 5,190,241 3,226,527 2005 43,303,414 6,475,384 4,046,832 2006 57,543,658 8,450,170 5,424,925 2007 70,745,010 10,584,307 6,331,208 2008 78,361,107 11,956,290 7,246,015 2009 83,586,300 12,587,589 7,895,072 2010 91,164,993 13,515,715 8,703,984 2011 98,884,902 14,328,728 9,615,985 2012 103,591,675 14,746,618 9,999,090 (hosterstats, 2012) 16
- 17. COM/NET/ORG DN Histogram 140,000,000 y = 9E+06x + 3E+07 120,000,000 103,591,675 98,884,902 100,000,000 91,164,993 83,586,300 78,361,107 80,000,000 70,745,010 COM NET 60,000,000 57,543,658 ORG 43,303,414 40,000,000 32,390,225 y = 1E+06x + 5E+06 20,000,000 14,328,728 14,746,618 11,956,290 12,587,589 13,515,715 10,584,307 6,475,384 8,450,170 5,190,241 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 (hosterstat,2012) 17
- 18. gTLD DN Counts 120,000,000 103,120,068 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 14,724,169 9,967,847 7,844,252 3,571,727 2,237,838 1,043,405 274,496 205,266 197,657 118,324 0 .com .net .org .info .eu .biz .mobi .tel .name .asia .xxx (hosterstat,2012) 18
- 19. ccTLD DN Counts 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 23 (hosterstat,2012) 19
- 20. ccTLD DN Counts/ Inhabitant 0.35 0.30 0.29 0.25 0.21 0.21 0.20 0.18 0.16 0.15 0.13 0.13 0.12 0.11 0.11 0.10 0.09 0.06 0.05 0.05 0.04 0.04 0.03 0.03 0.03 0.02 0.02 0.02 0.01 0.01 0.00 0.00 0.00 0.00 0.00 20 20
- 21. gTLD DN Counts by Country 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 25 (webhosting,2012) 21
- 22. c/g Ratio by Country 18.00 15.74 16.00 14.00 12.00 10.00 9.67 8.12 8.00 7.66 6.90 6.04 6.00 5.73 5.22 5.19 5.02 4.65 4.00 3.45 3.33 2.53 2.44 2.32 2.12 1.75 1.55 2.00 1.18 1.01 0.92 0.68 0.65 0.49 0.47 0.25 0.00 4 c/g Ratio : ccTLD registrations/gTLD registrations 22
- 23. Sales Market (1/3) • Sales Market Category – Retail market – Trade market • Baseline Assumption – Market price USD10 /name • Global DN sales market estimation – Total 2.25B names – Sales market : USD 22.5B per year 23
- 24. Sales Market (2/3) DN Trade Marketplace @Sedo 24
- 25. Sales Market (3/3) DN Trade Marketplace @Sedo Top Category 2010 25
- 26. Equity Market (1/4) DN Policy vs. DN Stock Price (John Matson, 2012) 1. June 26, 2008 – GNSO Approves New gTLD Policy 2. June 20, 2011 – ICANN Boar Approves New gTLD Program 3. Jan 12, 2012 – New gTLD Application window opens 4. May 30, 2012 – New gTLD Application window closes Measure the financial performance of publicly traded stocks associated with DN market : Tucows (TCX: Toronto), Verisign (VRSN: Nasdaq), Neustar (NSR: NYSE), Top Level Domain Holdings (TLDH: London) and Demand Media (DMD: NYSE) Growth from Date to 30 May 12 Company 26 JUN 2008 20 JUN 2011 12 JAN 2012 30 MAY 2012 26 JUN 2008 20 JUN 2011 12 JAN 2012 TCX 0.60 0.81 0.76 1.43 138% 77% 88% VRSN 38.24 32.74 36.01 38.62 1% 18% 7% NSR 21.69 25.75 35.96 32.95 52% 28% 8% TLDH 3.50 10.05 8.30 8.07 131% 20% 3% DMD 14.58 7.05 9.13 37% 30% DJ 11347 11935 12422 12420 9% 4% 0% IXIC 2316 3653 2711 2837 22% 22% 5% 26
- 27. Equity Market (2/4) DN Market Valuation Price @7/13/2012 Shares Outstanding Market Value TCX $ 1.22 46,238,000 $ 56,410,360 VRSN $ 43.17 157,988,000 $ 6,820,341,960 NSR $ 32.78 66,906,000 $ 2,193,178,680 TLDH $10.1 4,751,049 $47,985,600 DMD $ 11.83 83,915,000 $ 992,714,450 Five Firms Aggregated Value : $10,110,631,050 27
- 28. Equity Market (3/4) VRSN Profile VRSN Number of Names = 103591675 (com) +14746618 (net)=118338293 Unit Gross Profit (com) = $7.85 - $0.2=$7.65 Unit Gross Profit (net)=$5.1-$0.2=$4.9 Gross Profit = $864,734,742 P/E Ratio =42.5 Market Value =$ 6,820,341,960 Net Profit=$160,478,634 (Bloomberg, 2012) 28
- 29. Equity Market (4/4) The Journey to Profitability • DN business is a recurring revenue business model: 2t – The previous year’s efforts count t – Sales growth speed outpaces the sales efforts Sales base from existing recurring customers • Previous year’s efforts count: $ – Do not need to start from scratch Sales every year Sales growth outpaces sales efforts – Less vulnerable and volatile • Sales growth outpaces sales efforts: – Explosive growth at upward economic environment Recurring – Stable growth at downward economic environment Time t 2t 3t 29
- 30. TW Registry / Registrars • Registry • Registrars ccTLD: .TW TISNet Asia Pacific Telecom Operator: Chunghwa Telecom TWNIC Net Chinese Co. PC Home online Sparq Telecom • Policy & Regulation TFN Telecom – Telecom Act 21 Neustar – Domain name registration & Webcc administrative policy IP Mirror (92.02.11) 30
- 31. .tw DN Histogram 600000 y = 29729x + 142864 512399 503109 500000 444467 406669 400000 356182 332022 310579 300000 264680 238917 241585 226181 196451 200000 100000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (TWNIC, 2012) 31
- 32. com.tw DN Histogram 250000 y = 10459x + 62610 200000 187098 180471 172255 155980 150000 145644 135478 125535 110074 100000 96129 92624 86367 79496 50000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (TWNIC, 2012) 32
- 33. ascii.tw DN Histogram 100000 y = 8847.9x + 18077 90000 80000 73267 71920 70000 68494 60000 58090 50000 45487 40000 32159 30000 24863 20000 10000 0 2006 2007 2008 2009 2010 2011 2012 (TWNIC, 2012) 33
- 34. Registrar Market Shares 1.95 2.02 1.94 6.48 26.41 中華電信 7.57 NeuStar 亞太電信 網路家庭 網路中文 8.67 WebCC 新世紀資通 IP Mirror 協志科技 9.68 台灣固網 24.08 11.2 (TWNIC, 2012) 34
- 35. Total gTLD Names in Taiwan Total gTLD Names in Taiwan : 67,694 Rank TLD Total Domains Market Share Net Gain/Loss 1 COM 54,027 79.8106 % 121 2 NET 5,020 7.4157 % 6 3 INFO 4,602 6.7982 % 12 4 ORG 2,721 4.0196 % 14 5 BIZ 954 1.4093 % 3 (webhosting, 2012) 35
- 36. Innovation vs. DNS Correlation between Incorporation and DN (Nominet, 2010) 36
- 37. Competitiveness of DN Industry Concentration Ratio CRm= Σmi=1 si Four-Firm Concentration Ratio measures the total market share of the four largest firms in an industry CR4= 94.66% gTLD (com/net/org/info) Monopoly Market Registry Actual Volumes vs Projected Volumes (ICANN, 2010) By year 4, seven of the gTLDs had missed their projections by an average of negative 83%. Infringe NTIA agreement & ICANN Core Value “promote and sustain a competitive environment” 37
- 38. Registry/Registrar Reversed Structure Post new gTLD Stage 22 gTLDs 248 ccTLDs Registries Registries 22 gTLDs 248 ccTLDs 1930 new gTLDs New gTLD Registrars Registrars 1016 Accredited Registrars 1016 Accredited Registrars 38
- 39. New CDN gTLD • 1930 gTLD applications • 116 IDN gTLD : – Chinese : 73 – Arabic : 17 – Japanese : 9 CDN New gTLD Applications – Korean :3 一号店 公司 天主教 慈善 書籍 盛贸饭店 诺基亚 香格里拉 世界 公益 娱乐 我爱你 机构 移动 谷歌 電訊 中文网 商城 娱乐 手机 机构体制 网址 购物 點看 亚马逊 商店 家電 手表 欧莱雅 网址 通用电气公司 企业 商标 工行 招聘 淡马锡 网店 通販 佛山 嘉里 广东 政务 深圳 网店 集团 信息 嘉里大酒店 广东 政府 游戏 网站 電訊盈科 信息 在线 广州 新闻 点看 网站 飞利浦 健康 大众汽车 微博 时尚 珠宝 网络 食品 八卦 大拿 微博 普利司通 盛貿飯店 联通 餐厅 39
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- 41. DN Market Value Chain Backend Registry Software VCb VCa Operators b2 Vendors b1 Registries/ Registries a1 Registrars DN Trade Registrars Resellers Marketplace Brokers a2 a3 Market c1 c2 DNS/Web DN Hosting Holders d1 VCd Cloud Services Server Hosting VCc d3 d2 41
- 42. Value Chain Analysis • Primary VC (value chain) • Primary VC isn’t meant to – VCa come with missing links • Assess missing links in VC – Market saturation • VC with missing links isn’t • Core competitiveness meant to be the primary VC – Irreplaceable link in a VC • Primary VC doesn’t last forever – Things vary over time – Registry/Registrar reversed structure 42
- 43. VC Matrix Assessment VC Value Uncertainty node P1 P2 P3 Mean P1 P2 P3 Mean a1 5 4 5 4.67 4 5 4 4.33 a2 4 4 3 3.67 2 3 2 2.33 a3 1 2 1 1.33 1 2 2 1.67 b1 3 3 2 2.67 2 2 1 1.67 b2 3 3 4 3.33 4 3 2 3.00 c1 3 2 2 2.33 2 3 3 2.67 c2 2 1 2 1.67 3 4 4 3.67 d1 3 2 3 2.67 2 1 1 1.33 d2 3 3 3 3.00 2 3 2 2.33 d3 4 5 4 4.33 3 5 4 4.00 43
- 44. VC Value Distribution 5.00 a1 a1 a2 4.00 d3 a3 c2 b1 Uncertainty 3.00 b2 b2 c1 d2 a2 c1 2.00 c2 a3 b1 d1 d1 1.00 d2 d3 0.00 0.00 1.00 2.00 3.00 4.00 5.00 Value 44
- 45. Taiwan DN Policy Strategy 5.00 a1 Deprioritize and source Risk mitigation alternative technologies a1 a2 4.00 d3 a3 c2 b1 Uncertainty 3.00 b2 b2 c1 d2 a2 c1 2.00 Strengthen industrial competitive advantage c2 a3 b1 d1 d1 1.00 d2 Develop fair competition d3 environment 0.00 0.00 1.00 2.00 3.00 4.00 5.00 Value 45
- 46. References 1. Bernard M Hauzeur. (1986). A Model for Naming, Addressing and Routing. ACM Transactions on Office Information Systems. Vol. 4, No.4 Oct 1986 P293-311 2. Deborah A. Garza. (2008). Letter to ICANN: ICANN's Draft RFP for New gTLD. Dec 3 2008. From http://www.ntia.doc.gov/files/ntia/publications/icann_081218.pdf 3. Elizabeth Feinler (July–September 2010). "The Network Information Center and its Archives". Annals of the History of Computing (IEEE) 32 (3). DOI:10.1109/MAHC.2010.54 4. GNSO.(2007). Introduction of New Generic Top-Level Domains, gNSO Board Report. September 11, 2007 5. Hosterstats. (2012). ccTLD Domain Name Counts 2012. From http://www.hosterstats.com/DomainNameCounts2012.php 6. ICANN Registries. (2012). Registries Listing. From http://www.icann.org/en/resources/registries/listing 7. Internet World Stats. (2012). Internet World Population Statistics. From http://www.internetworldstats.com/stats.htm 8. Michael Porter. (1996). The Five Competitive Forces That Shape Strategy. HBR Must Read on Strategy. Harvard Business Review 1996. 9. New gTLD. (2012). Reveal Day 13 June 2012 - New gTLD Applied-For Strings. From http://newgtlds.icann.org/en/program-status/application-results/strings-1200utc-13jun12-en 10. Pingdom. (2012). Internet 2011 in Numbers. From http://royal.pingdom.com/2012/01/17/internet-2011-in- numbers/ 11. Sedo. (2010). Sedo's Domain Market Study 2010. From http://sedo.com/fileadmin/documents/pressdownload/2010Market_Study.pdf 12. U.S. Department of Commerce. (1998). Memorandum of Understanding between the U.S. Department of Commerce and Internet Corporation for Assigned Names and Numbers. From http://www.icann.org/en/general/icannmou-25nov98.htm 13. U.S. Department of Commerce, National Telecommunications and Information Administration. (1998). Statement of Policy : Management of Internet Names and Addresses, 63 Feg. Reg. 31741. 14. Verisign. (2012). The Verisign Domain Report. Volume9 Issue1, Mar 2012 15. Webhosting . (2012). Total Domains in Taiwan. From http://www.webhosting.info/registries/country_stats/TW 16. Wikipedia. (2012). List of Countries by Population. From http://en.wikipedia.org/wiki/List_of_countries_by_population 17. Xahlee. (2010). Domain Names， Cybersquatting， Resell Market. From http://xahlee.info/js/domain_names.html 46
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