Tucows to auction off expired domain names

Tucows Inc. is launching an auction service to resell expiring domain names that will capitalize on a market valued at US$60 million worldwide, said the company’s chief executive.

Tucows, an ICANN-accredited, wholesale provider

of domain-name registration services, expects to roll out the auction through its channel of service providers later this year.

Initally seeking the approval of former owners of domain names will become “”a standard part of the renewal process,”” said president and CEO Elliot Noss. “”In other words, if a name is not renewed by a certain date, it will automatically go into the auction state.””

Yet, Tucows plans to protect the previous registrant’s existing rights because even if a URL enters the auction, the old registrant still has a window of opportunity to retain the name under the system. Noss said Tucows plans to “”hold the name in escrow for another 30 days”” on top of a period of “”anywhere from one to 45 days”” that a former registrant has to reclaim their domain name after expiry, depending on which registrar they’re dealing with.

“”We haven’t yet published what the practice will be in connection with this”” period of one day to 45 days, he said.

Tucows said a percentage of expiring domain names up for grabs in the secondary market was originally registered through its Internet registery. Anecdotally, Tucows said it believes between two per cent and five per cent of names that expire are immediately signed up by other registrants in the global domain-name market.

Describing the expired-names industry as “”very vibrant but inefficient,”” Noss explained it’s a telling statistic that every month “”at least one name goes for at least US$10,000 in this market.””

In other words, every month someone allows a name to expire that they could have sold at an exorbitant rate since they’re ignorant of the domain name’s true value in the secondary market, he said.

“”And that’s because it’s nearly impossible as a registrant to go through the time and effort to find that out. It’s very opaque.””

Under the system, Tucows will give its registrants the chance to share the revenue with the former registrant and participating service providers. Although the economic terms have not been laid out, former registrants will receive a “”significant majority of the money,”” said Noss.

Tucows will in essence “”take a transaction fee or processing fee off of the top,”” which will be shared by the company’s customers, including ISPs and Web-hosting companies.

Tucows calls its auction service a “”fundamental change”” in this market that competitors haven’t replicated, but may result in an industry-wide approach in the future.

Whereas his auction service is tailored to an unsophisticated customer, Noss said other Web sites catering to the secondary market, such as Ottawa-based Pool.com, and both Clubdrop.com and Namewinner.com in the state of Washington, demand that users “”understand a lot of arcane nuances.””

Gabriel Ahad, director of communications for the Ottawa-based Canadian Internet Registration Authority, which manages dot-ca domain allocation, said the agency doesn’t track the market to resell domain names in Canada. He said, therefore, that it cannot provide insight on the extent to which local firms provide these auction services. There are currently 80 CIRA-certified registrants.

Yet, Ahad said he is happy to see new services entering the market because he it provides Canadian customers with more choice.

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