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Who owns the domains?

A domain name is a website name, a unique alphanumeric identifier of a specific Internet node. Domain names are needed for convenience. Without them, the website address would look something like this - 127.0.0.1.

ICANN (Internet Corporation for Assigned Names and Numbers), a non-profit headquartered in the USA, manages everything on the Internet. It was created to regulate issues related to domain names, IP addresses and other aspects of the Internet. It is the one that introduces new domain zones, of which there are more than 1500 in 2024.

Top level domain (TLD) is the last part of a domain name, appearing after the dot (e.g., .com in example.com). TLDs help identify the type, purpose, or origin of a website. They are categorized in different groups:

  1. Generic TLDs (gTLDs): Standard domains for general use, like .com, .org, and newer ones like .blog, .tech, .shop, or .xyz.
  2. Country Code TLDs (ccTLDs): Specific to countries or regions, like .uk (United Kingdom) or .jp (Japan).
  3. Internationalized TLDs (IDNs): Use non-Latin scripts, such as Chinese (.在线) or Arabic (.شبكة).

Quick facts:

  • The most popular domain zone is .COM, with 160 million names registered in it (2024).
  • The .SE zone (Sweden ccTLD) has about 1.5 million names (2024).
  • There are about 337 million domains in the world (2024).

How do you get a domain, and who owns it?

1. ICANN Oversight

  • ICANN (Internet Corporation for Assigned Names and Numbers):
    The global organization responsible for managing the Domain Name System (DNS) and ensuring unique domain names and IP addresses.
    • It accredits registrars and oversees policies for domain management.
    • It manages the root zone of the DNS, delegating TLDs to registries.

2. Registries

  • Definition:
    A registry is the organization responsible for managing a specific TLD (e.g., Verisign manages .com and .net; PIR manages .org).
    • They maintain the central database (zone file) of domain names under their TLD.
    • Registries sell domain names indirectly via registrars and occasionally offer them directly to customers.
  • Pricing:
    The registry sets the wholesale price for domains, which registrars mark up.

3. Registrars

A registrar is a company accredited by ICANN to sell domain names to the public (e.g., GoDaddy, Namecheap, Google Domains). They act as intermediaries between registries and customers.

  • Services:
    • Offer domain search, registration, renewal, and transfer.
    • Provide add-ons like DNS management, WHOIS privacy, and hosting packages.
  • Competition:
    Registrars differentiate themselves through pricing, support, and features like ease of use and bundled services.

4. Domain Search and Availability

When a customer searches for a domain:

  1. Registrar Query: The registrar queries the registry database to check domain availability.
  2. Real-Time Results: The availability result is displayed in real-time.
  3. Premium Domains: If a domain is in high demand or part of a premium tier, it is priced higher, either by the registry or as a resale by a current owner.

5. Registration Process

When a domain is registered:

  • The registrar collects customer information (name, address, etc.).
  • The registrar sends this data to the registry to update the central database.
  • WHOIS Database Update:
    The domain's ownership and details are added to the publicly accessible WHOIS database (unless privacy protection is enabled).
    • ICANN mandates WHOIS accuracy for accountability.

6. Domain Lifecycle

A domain follows a structured lifecycle:

  1. Active Registration: The domain is owned by the customer and usable.
  2. Expiration Grace Period (typically 30-45 days): The customer can renew the domain at the standard cost.
  3. Redemption Period (additional 30 days): The domain can be redeemed, usually with a penalty fee.
  4. Pending Delete: The domain is prepared for release.
  5. Available Again: The domain returns to the open market for registration.

7. Secondary Market

  • Domain Resellers:
    Resellers buy domains in bulk from registrars or registries and sell them individually.
  • Aftermarket Platforms:
    Platforms like Sedo, GoDaddy Auctions, and Flippa enable buying and selling of previously registered domains (e.g., premium or expired domains).
  • Domain Investors:
    Investors purchase valuable or trending domain names, holding them to sell later at a profit.

8. Revenue Streams

  • Registry Revenue:
    Earned from wholesale domain pricing and premium domain sales.
  • Registrar Revenue:
    Comes from domain markups, add-on services (e.g., email, hosting), and renewals.
  • Reseller/Aftermarket Revenue:
    Profits from domain flipping and premium sales.

9. Security and Compliance

  • ICANN Policies: Registries and registrars must comply with ICANN policies, including transparency, dispute resolution (e.g., UDRP for domain disputes), and data protection.
  • DNSSEC (DNS Security Extensions): Ensures that domain data cannot be tampered with during queries.
  • WHOIS GDPR Compliance: Post-GDPR, registrars must protect personal data unless required for legal purposes.

So how much money is made in the domain industry?

ICANN itself earns little. Its income is about $250,000,000 per year, but Operators and Registrars earn much more.

In 2000, Verisign bought NetworkSolutions for $20.8 billion, and became the monopoly operator for .COM, .NET, and .ORG domains.

Looking at the company's financial statements, you can say that it practically "prints" money. Over the past 12 months, the company received $1,189,669,000 in revenue and $480,559,000 in net income (equivalent to 40 percent).

Go Daddy is the world's largest domain name registrar. GoDaddy Group supports about 60 million domain names. Its Revenue: $2.232 billion.

There are hundreds of registrars. You can see the full list here: https://www.icann.org/registrar-reports/accredited-list.html

However, there are about 10 really large companies.

Now that ICANN has chosen a policy of creating new domain zones, new players in the domain industry market and new records of company income are ahead.

In fact, as many words as there are, so many domain zones can appear and multiply this by the number of languages. Demand dictates supply. The application fee is $ 185,000. Experts have calculated that about half of the largest American companies included in the Fortune 500 rating have become applicants for their own top-level domains. A new Internet revolution is ahead.

The most anticipated domain zone is .WEB, according to forecasts, it will have to compete with the .COM zone. In 2016, ICANN held an auction for the right to manage this zone. Nu Dot Co (Verisign) won this auction, offering $135 million.

Domains are virtual addresses of websites, each of which has its own value. I think it's no secret that beautiful domain names go to auction for a tidy sum.

For example, the Sex.com domain was sold for a record $14 million. This is 1 billion rubles at the current exchange rate.

Just think about it - 1 billion rubles just for a Name. If anyone makes money out of thin air, it's domainers.

Look at these numbers:

  • Hotels.com - $ 11,000,000
  • Fund.com - $ 9,999,950
  • Porn.com - $ 9,500,000
  • Fb.com - $ 8,500,000
  • Business.com - $ 7,500,000
  • Diamond.com - $ 7,500,000
  • Vk.com - $ 5,560,000
  • Slots.com - $ 5,500,000
  • Toys.com - $ 5,100,000
  • Clothes.com - $ 4,900,000

The vast majority of the most expensive domains are in the .COM zone,

If, for example, the Vodka.com domain was purchased by Russian Standard for $ 3,000,000, then Vodka.ru cost them only $50,000.

In the .RU zone, the first place in the ranking of high prices is occupied by the sms.ru domain, sold for $550,000.

Of course, there were more significant sales, but then we were talking about the sale of the domain and the assets of the company that previously owned this domain. This was the case with the insurance.com domain, sold for $35,600,000.

However, it is important to understand that the domains of some corporations, even without their assets, can cost colossal amounts of money. Imagine how much, for example, the Google.com domain could cost with its multi-billion dollar traffic? Definitely not less than a billion dollars.

Beautiful and expensive domain names have great potential in terms of attracting an audience. And often domains are a key factor in the success of an Internet project.