WHAT is the worth of a good name?

That, as it turns out, is for the market to decide, and the answer will become clearer in a few months when it will become legal to buy, sell and trade .au domain names. But those with names to sell should not get over-excited: while there might be some nuggets, the changes are unlikely to spark an e-property boom.

"I expect we will see an active market, but our aim is to see a fair one," says Chris Disspain, head of Au Domain Administration (auDA), the policy authority and industry self-regulatory body for the .au domain space. He notes that .au already has more than a million names registered. It is safe to assume that some, at least, will have a significant market value.

"Our intention is to establish a market framework in which both buyers and sellers are properly informed," he says. "We also want to avoid 'cyber-squatting' - that is, people buying up generic names on a speculative basis not with the intention of using them but of selling them to people who need them."

Speculative trading is one reason the US market in domain names often sees names change hands for six- or seven-figure sums. In Australia in 2002, auDA released names that had never before been registered: flowers.com.au was sold for $153,000.

Even with the ban in place, there has long been a certain amount of trading in domain names. Names could be legally sold as part of the sale of a business, and there has long been a "grey" market on eBay and elsewhere. The virtual nature of domain names has made the ban difficult to monitor and police - and the general consensus in the tech community is that auDA does not really see itself as an enforcer.

Disspain notes that the ban will not be fully lifted until about June, even though a review panel decided late last year that it had outlived any usefulness it might have had. The reason for the delay is essentially administrative: there will need to be significant changes in the registry and transfer process, and possibly a public database to show what names have been sold, and how much for.

"We plan to conduct an education campaign, not just about buying and selling but about the advertising of names for sale being legal. And there are some rules that sellers and buyers will have to understand. You will have to own a name for six months before you can sell it, for example. Also, the standard eligibility rules will apply, meaning that the buyer's business will need to have a close and substantial connection to the name they are buying. The idea with that is to prevent the speculative element creeping in."

The tech industry is generally supportive of the changes, although there are some questions over the new rules.

In practice, those conditions will probably be difficult to enforce, says Tristan Newton of Sublime IP, a company that acts as a domain name registrar, and provides server housing and other internet services.

"I suspect that a bit of cyber-squatting and speculation will creep in, although I don't think it will have much effect," Newton says. "The value of com.au and net.au names is simply not as great as .com names - Australia is a smaller economy and marketplace.

"It is difficult to estimate the value of .au domain names as each case will depend on issues such as the recognition of the name itself, and its capacity for higher-level ranking on popular search engines like Google. These are the points that a seller will have to put into their advertising, but even at the upper end of the market I would not expect to see many sales involving more than four figures.

"The market has become fairly mature in the past few years and I believe there will be some active trading, but I doubt there will be any fortunes made."

Likewise, Disspain advises both buyers and sellers against undue optimism.

"Approach it like any other business transaction," he says. "Do some homework ... and don't feel obliged to take the first offer."

Source: The Australian online, March 28, 2008 | Author: Derek Parker
http://www.theaustralian.news.com.au/story/0,25197,23399226-5010941,00.html