Hi all,

I have been interested in this recent thread
revolving around the economics, benefits or
otherwise of DN competition. Much of the
commentary has been insightful however a number
of observations / hypotheses are IMHO are not
correct. Below I attempt to throw some light on
some of these:

___________________________________________

Ari Maniatis wrote:

>What I do not understand is a competitive model 
>where the product from every reseller and
>registrar is identical. They all sell domain
>names.

Ari, the **product** may be the same but **the
value proposition** to customer is demonstrably
very different. Consider for example two
offerings in the competitive US DN marketplace.

Yahoo's personal e-mail address offering. See 

http://billing.mail.yahoo.com/yo/vorder1?.refer=services
 
As a value proposition, this is might be seen as
a customising option add on to the the basic free
of charge e-mail service that Yahoo provide. In
marketing terms it is closely allied to vanity
car rego plates. Yahoo's nominated benefits are
instructive in this regard:

"Be memorable!
It's easy!
You own it"

As a stark contrast consider now the service
provided by Mark Monitor, See
www.markmonitor.com, a Boise Idaho company that
have bundled DN services with a more
comprehensive corporate IP management service. 

The value proposition here is clearly targeted a
corporates who want to ensure their brand
integrity isn't tarnished online. Same product at
the core of both of these products, a DN, but
very very different value propositions aimed at
very different target markets.

Those who want to better understand this area
could do a lot worse than reading Hal Varian and
Carl Shapiro's brilliant book: 

Information Rules : A Strategic Guide to the
Network Economy


__________________________________________

Ian Johnston wrote

>Hypothesis: Given the scale and scope of 
>domain name registrations in the
>.au namespace, under new registry arrangements 
>the marginal cost of issuing a domain name
>license should approach zero

Ian, not sure that this follows logically at this
point in the product adoption life cycle.

This may be a rough approximation when the vast
majority of the planet's population have a DN
however the flaw in the logic at this point in
time is that whilst marketshare penetration is
relatively low,  significant cost is *still*
required by all players in the marketing value
chain (ie in au: auDA, Registrars and
Resellers)to market DNs.

Interestingly IMHO this is the greatest challenge
that those who propose to offer Free of Charge
(FOC) services around .id .org (for example) in
the .au space face.

It is not that a non profit entity couldn't
operate these 2LDs effectively at this point in
time however it is hard to see where they would
derive funds to market these spaces to grow
market share effectively in the future.

Hope this is useful

Cheers 


David G Thompson

  

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