The end of an era: RIP Afternic.com
Date: Wednesday September 25 2002, @04:53AM
Topic: Registrars

fnord writes "Should one need further evidence that the bottom has dropped out of the domain speculator market, and that much of the domain name market is looking more than a little ragged, one need look no further than the recent steep decline and now imminent death of domain reseller auction site Afternic.com."

Citing its own lower than expected revenue and earnings, its parent Register.com, with its own storied history: one of ICANN's largest registrars, ICANN's first operational accredited registrar after VeriSign, an unsuccessful applicant in the new gTLD rollout, the first to auction off expired names (which VeriSign's now ICANN blessed WLS largely supplants), and one (or rather two, albeit the latter two) of the five finalists for .org redelegation ...Whew... well they've now announced that they are closing Afternic, which they purchased two years ago (that is, after the dotcom crash was well underway) for $48 million.

This was after Afternic created yet another first by being the first to file a lawsuit against ICANN. Strangely, but not atypically, the ICANN site seems to have mysteriously disappeared any mention of that absurd brouhaha. Thankfully the internet proper is not so unforgiving, and early coverage and its farcical dénouement remain extant. Perhaps it was that last first that doomed register.com to a perpetual role of bridesmaid when it infrequently comes time for ICANN to hand out its trinkets. While the icann.org site seems to forget such matters, one suspects its staff have longer memories, and/or Register.com actually fell for the hype it helped to generate and has repeatedly thrown good money after bad.

Afternic was for some time one of the best sources and aggregators of ICANN news (I wrote more than a few ICANNWatch submissions based on info that first bubbled to the surface there, the ICANNWatch archives will contain a number of dead links). Afternic was also once a vibrant community of thousands of members with hundreds of daily posts to its forums, considerably more chat messages, scores of evaluation models by participants regarding which names were worth what (most of them wildly optimistic), oh...and hundreds of thousands of already registered domain names up for auction, mostly in .com, but also in other ICANN gTLDs, new and old, and ccTLDs, mostly but not entirely repurposed ones like .tv and .ws. They also dabbled in other areas, EG: for a time they offered new.net names, both new and for resale.

I cannot say that I am too surprised by this as the site has lost most of its functionality over the past year, its postings tapering off until a few months ago its forums were shuttered, its news now infrequent and stale, probably not one in a hundred of its domains ever receiving a single bid, and some of those were by shills and widely alleged bid-rigging rings.

Still, I am sad to see it go. Many of the regulars were speculators chasing a dream, a dream largely built on incredibly inflated hype, much of that coming from ICANN registrars and well-funded bulk resellers (some of those having since gone on to become ICANN accredited registrars themselves, and some of those playing a considerable part in the multiple and continuing ICANN new TLD rollout fiascos, they've been laying low but I expect them to rear their ugly heads with ICANN approval now that the MoU is signed, but that's a story for another time).

The regulars were mostly small speculators, unlike the big money folks who knew how to game the system and weren't about to share their secrets. And the regulars were mostly decent folks, they'd mercilessly flame those who deliberately cybersquatted, many of the latter being the same big money players. The regulars weren't for the most part, despite ICANN's myopia, the enemy. They were rather, due to ICANN's artificial throttling of the namespace, the source of a considerable part of ICANN's revenue.

Although I am not a speculator, I respected many of them for what they were trying to do (while often suggesting they put their names to actual use and pointing them to resources that might help them turn a profit from that actual use, and also trying to warn them gently that they were hopelessy deluded regarding any chance of resale riches, even with a site that was somewhat profitable). They're all gone now, they certainly haven't just moved over to similar sites like VeriSign's greatdomains, which prior to this announcement was arguably even more moribund. Given the non-renewal rate for expiring domains I suspect most of them have left the industry, hopefully (and probably a little sadder, wiser, and shorter of pocket) they have gone on to more profitable pursuits. It's not like they lost their life savings to the hype of Enwrong, WorldCon, et al, although the differences in both cause and effect are probably not of kind, but of degree. And perhaps some few of them actually did put their names to use, some few of those perhaps being profitable, perhaps part of a new era. -g

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Re: The end of an era: RIP Afternic.com
by fnord (groy2kNO@SPAMyahoo.com) on Wednesday September 25 2002, @06:45AM (#9380)
User #2810 Info
Your points of criticism aren't without merit. Afternic certainly wasn't perfect. But I've had this argument with you, or some other Anonymous, here a few months ago. While it may be in speculators' best interests to market their domains to relevant industries, I don't see that as a viable business model either. If I recall, I asked you, or some other Anonymous, for any evidence that anyone was having any success with that endeavor, and am still waiting.

If I am Acme Hardware and can't understand how to buy a name on Afternic or, as you say, a registrar site, then getting an unsolicited email (or snailmail or fax or phonecall or visit) from from the likes of MyKewlNames@aol.com or aol@mykewlnames.ws offering me acmehardware.com for $5000 is unlikely to trigger me into cluefulness. I am more likely to flush it as spam (or at least a scam, similar domain scams receiving about as much press as ICANN's new TLDs, with there being not inconsiderable overlap between the two!), or ask a nearby techie what it means (who will tell me to flush it), or get somewhat clued and find out I can register acme-hardware.biz for a small fraction of that cost and from a (somewhat) known entity, or get more clued and go after you as a squatter (your correspondence being entered as evidence).

And this isn't before the bloom came off the dotcom hype, that is well past. If I'm Acme Hardware I either already have an address (which means I or my techies somewhat understand the name market and will reject your offer out of hand), or I don't want one.

Or I may fire up a search engine and go looking to buy a name more cheaply. For much of its existence Afternic showed up first or at least above the fold, with a search on "buy domains" or "domains for sale" on most of the common search engines (this before google, which returns 500k and 50k hits respectively, try to market yourself through that). They did know how to market in that sense at least, and on the internet that makes very good sense. They no doubt got a considerable amount of any buyer traffic, but that still didn't help them. There simply isn't much buyer traffic and never has been, that was, and apparently remains, part of the hype. What few buyers still out there (and most who ever were) are small speculators looking to buy from larger ones, still deluded, still chasing a dream, still propping up the MLM pyramid with ICANN at the peak and hype for a foundation. You can allege that there is such a market out there but I simply don't believe you and I doubt anyone but a few remaining speculators do either. As to your last paragraph:

Register.com discovered it would actually take hard work to make Afternic successful, at which point the decision was made to dump it. After all, I cannot think of any registrar who really has to work that hard to make money.
Afternic was at the peak of its game when Register.com bought them as the dotcom burnrate hadn't yet reached three alarm fire status (it has long since become an out of control conflagration). They had the eyeballs (admittedly almost entirely belonging to speculators, with most of the remainder being IP folks, one of the far smaller database of still remaining names up for auction is aolxrated.com), and they marketed to those eyeballs, offering what the wallets behind those eyeballs presumably wanted to buy. They didn't do that perfectly but they did it somewhat competently (better than most other sites, though I'm open to contrary examples). Unfortunately the market was already dying, the lightened wallets were what the eyeballs were seeing. I thought register.com was foolish to spend that kind of money on afternic, and they apparently were. But if you can't think of any registrar who really has to work that hard to make money that shows how little you understand the domain name industry. -g
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Re: The end of an era: RIP Afternic.com
by fnord (groy2kNO@SPAMyahoo.com) on Wednesday September 25 2002, @07:21AM (#9383)
User #2810 Info
As I've said, Afternic wasn't perfect, although in my experience they weren't as bad as some make out. I think speculators who can't sell names have a habit of looking for someone to blame, it's Afternic, or it's ICANN, or [insert excuse here]. It's actually due to the fact that there are very few buyers and very many sellers, but to blame the market, speculators would have to admit that they believed the hype, and it's only human nature that that is difficult to do.

Afternic's heyday, as I've also said, was around the time of Rcom's purchase, but Rcom doesn't bear total blame for its demise. After taking it over it did gain additional features, it was at least as functional as before. The difference was that many speculators were coming up on the renewal of their names, and got a reality check that if they wouldn't sell (or even get an offer) in a good market, they were even less likely to sell in a bad one. Look at the Active vs Deleted names here. This is an industry in freefall. -g

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Re: The end of an era: RIP Afternic.com
by fnord (groy2kNO@SPAMyahoo.com) on Wednesday September 25 2002, @01:08PM (#9399)
User #2810 Info
[blush] Sorry, I forgot that. Where do I go to register .pro names exactly? -g
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