For Nominet, .uk domains are ALL about money

by Edwin on July 12, 2013

It’s time to shine a bright light on the elephant in the room: for Nominet, the launch of the new .uk domain names is ALL about money.

There’s nothing crass or rude about talking about money. It’s standard – and sensible – business practice to look at the potential financial impact impact of a new product. Yet from the initial direct.uk consultation (October 2012) until now, Nominet have avoided talking publicly about the issue, and brushed away all attempts to discuss the subject.

The simple truth: .uk is a goldmine for Nominet, and they know it.

Yet their attitude is akin to claiming that the huge hole in the ground is being dug to enhance the natural beauty of the area. “Gold? Really? We hadn’t noticed… Anyway, we’re not here for gold.”

Additional revenue from .uk domain registrations

Nominet had revenue of £25,200,000 in 2012. Even a very conservative scenario for .uk, where only half of existing domain owners take up the option of a .uk name, would see Nominet make the same again from the launch. And if .uk gains a bit more traction, they could be making over £40,000,000 a year (every year) extra. That’s money coming directly out of the pockets of businesses.

projrev

(The left-hand column is the scenario in which .uk doesn’t go ahead)

To date, Nominet has provided:

  • No business case for .uk
  • No market impact analysis
  • No financial projections
  • No risk analysis (there are severe, real risks associated with launching a .uk extension which can easily be confused with existing extensions such as .co.uk)
  • No formal market research to determine interest
  • No survey of existing customers who would be impacted by .uk

In fact, their whole basis for trying to push forward .uk has been anecdotal evidence that (paraphrased) “many people have asked us why they’re unable to register domains directly under .uk”

Nominet have also failed to adequately address ANY of these legitimate issues with the concept of .uk:

  • The current system is effective and well understood
  • There are no technical reasons to change the current structure
  • 3,000,000 businesses already market .co.uk web addresses
  • Multiple organisations with the same name coexist happily (.co.uk, .org.uk, .gov.uk, .plc.uk, .ltd.uk, .ac.uk etc.) – no extension is superior to the other
  • Using .UK and .CO.UK alongside each other for businesses creates confusion
  • Businesses will be forced by this fear of confusion to acquire and maintain both registrations, regardless of cost
  • Higher annual renewal fees (2 domains rather than 1)
  • Astronomical rebranding costs for UK plc to change cards, stationery, website etc.
  • High marketing costs to inform customers about the .co.uk/.uk confusion
  • Increase in phishing attacks, and higher probability of them succeeding because of confusion
  • Misdirected emails intended for .co.uk end up at an unrelated .uk name
  • Potential privacy breaches, loss of trade secrets etc. because of emails gone astray
  • Technical setup costs for running two domains and redirecting emails and traffic
  • Loss of confidence in .co.uk as .uk takes off
  • Push from all organisations at the third level to be present at the second level i.e. .org.uk organisations will also want to be at the .UK level, as will schools, etc. – but there can only be ONE winner
  • All or nothing decision – no new domain extensions (e.g. .shop.uk) can be launched in future to meet new market demands

Despite this, Nominet continue to march relentlessly forward, eyes fixed firmly on the glittering jackpot payoff that launching .uk represents.

You still have a chance to make a difference: Nominet’s consultation runs until 23 September 2013. Take the time to read up on the issue, and bear in mind that Nominet stand to cash in to the tune of £25,000,000 or more every year if .uk goes ahead – then formulate your response accordingly.



BACKGROUND NOTES
Nominet is proposing to allow registration of UK domains directly under .uk for the first time. Historically, people have been limited to registering domains under .co.uk, .org.uk, .me.uk, .gov.uk and other extensions.

They suggest a price of £5.50/year for one year registrations and £4.50/year for multiple year registrations. The graphs above assume a £5/year average registration fee.

There are approximately 10,500,000 domains registered under extensions managed by Nominet (.co.uk, .org.uk etc.)

Nominet will be informing all registrants about the new .uk domains (if they go ahead with the launch) and the oldest continuous registrant under any matching domain (e.g. example.co.uk and example.org.uk, in the case of example.uk) will be given the right to register the matching .uk.

The above graphs are based on very simple math – there’s no hidden trickery! For example, if 50% of existing domain registrants take up the option of the .uk, then Nominet make: 0.5 x 10,500,000 x £5 = £26,250,000 from them.

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25 million reasons to say yes
July 18, 2013 at 1:13 pm

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