That article is written from the domain name speculator's perspective.
And as much as gains on a tiny set of .com name sales captures the writer's (and usually ICANN's attention) it is the other side of the .com registry fee that is of far greater economic impact.
In past years I have speculated that the cost to operate the .com registry (including the name server cloud) is on the order of $0.03 per name per year.
Using that $0.03 number, ICANN is gifting to Verisign an unearned profit of $7.82 per name per year - which when measured over the number of names in .com amounts to about $1.5BILLION - with a "B" per year in pure profit.
Suppose my estimate is off by 10x, i.e. 1000%. Suppose that the
cost is $0.30 per name per year. That barely changes the result.
It is still a gift from ICANN to Verisign in excess of $1.5BILLION
per year.
Suppose my estimate is off by 100x - 10,000%. That the cost is $3/name/year. That still results in roughly a $BILLION/year gift from ICANN to Verisign.
Now, ICANN has been around for 20 years. From which we can make
a very imprecise estimate that ICANN's lack of auditing and
concern for the actual cost of providing the .com registry service
has amounted to a wealth transfer from internet users to Verisign
of perhaps as much as $20BILLION - so far.
Now, a rational internet user might wonder if my numbers are accurate or not. It seems, however, that ICANN is not concerned because as far as I know ICANN has never asked for gross numbers, much less performed an audit.
We know that Verisign has engaged in various forms of security
theatre - such as construction of visually fortress-like data
centers - to make it appear to uninformed government
administrators and legislators that Versign deserve pallets of
cash else Verisign might stumble and collapse the internet. Even
if we allow that kind of posturing - those expenses ought to have
been depreciated down to zero over the two-plus decades that
Verisign has been sitting on .com.
So perhaps a few domain name speculators are getting a few tens of thousands - maybe even a couple of $millions - out of buying and selling domain names in .com. That, however, amount to nothing more than grain of sand on the vastly larger beach of money that is ICANN's fiat .com registry fee gift.
Did anyone mention .net? Similar story.
Compare Versign's registry fee - now approaching $8/name/year with the cost of things like Gmail or Facebook, which are "free". (One may counter that Google and FB obtain revenue from other sources, such as advertising or compiling marketing targeting data on users. But who among us can say with certainty that Verisign is not compiling valuable marketing data from domain name activities or selling useful intelligence data to various governments - maybe they are not, but has ICANN ever inquired?)
--karl--
and breadcrumb the money trail.....
-Carlton
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Carlton A Samuels
Mobile: 876-818-1799
Strategy, Process, Governance, Assessment & Turnaround
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