RE: [registrars] Comments on Proposed Domain Name Wait Listing Se rvice

[Paul Stahura <stahura@enom.com>]

Chuck & Tim,
My comments below...

Paul
eNom, Inc.

> -----Original Message-----
> From: Gomes, Chuck [mailto:cgomes@verisign.com]
> Sent: Thursday, January 03, 2002 12:56 PM
> To: 'tim@godaddy.com'; Gomes, Chuck; registrars@dnso.org
> Subject: RE: [registrars] Comments on Proposed Domain Name 
> Wait Listing
> Se rvice
> 
> 
> Tim,
> 
> The price point is based on a lot of cost factors, including but not
> limited to:
> 1. Licensing the technology (initial and ongoing costs)

Why not select another method that does not include this cost?

> 2. Integration of the technology into Registry systems
> 3. Testing and quality assurance of the system
> 4. Development and support of OT&E versions of the service
> 5. Development and support of registrar agreements of the WLS
> 6. Customer service (initial and ongoing, 7x24x365)
> 7. Equipment
> 8. Operational support (development, implementation, ongoing
> maintenance, etc.)
> 9. Policy development
> 10.Billing and collections (this will be a new service factor for us,
> very different than regular registrations)
> 11.Legal liability
> 12.Easy to use tools for registrars
>    etc.

Disregard how the revenue is generated to Verisign for a second.
You've already paid for most (all?) of these costs with the current system.
Why not modify it to be more efficient with the load, thus save
the cost of building and supporting an entirly new seperate system?

> 
> We learned a long time ago to use very rigorous methods anytime we
> implement a new offering.  It costs more but the reliability of the
> service for our customers is greatly improved.  Also, we build in
> redundancy in telecommunications, equipment and people to minimize
> service impacting outages in the future.  I am sure that an offering
> like this could be done less expensively, but I am equally as 
> sure that
> it would not meet the high standards that our engineering and 
> operations
> teams demand.

It seems the current system is closer to "there" than some
un-built different system is.

> 
> As I have said in other posts on this subject, we literally 
> do not know
> how successful this offering will be.  

I thought you said in your original post that it would get 5%
of the number of currently registered names. 

> It may turn profitable in the
> first year; it may not; it depends on volume.  

If, as you said, it gets 5% of the names, wouldn't it then
generate $70M in revenue?  Even if you paid SnapNames 50%
of the revenue, the remaining $35M would be extreamly profitable.

> We will design a system
> that will scale to handle high volumes and, if the high 
> volumes do come,
> we should do well.  If they do not, it may be cancelled in a year and
> there is risk of taking a loss.  That is the way things work in a free
> marketplace.  There are risks but the risks are tolerable if there are
> also incentives.
> 
> Could we roll this out at 70 to 80% of the proposed price?  

I don't know how much of the proposed price is going to SnapNames,
but if that fee was zero, then I bet you guys are smart enough
to do it for 85-90% of the proposed price.  
An easy way to find out is to ask SnapNames what it cost them
to build.  Assume they spent *all* the money they raised on building
the system, then just find out how much they raised.  
It would be less than that number.

> I don't
> know.  I have already noted that we could by compromising on 
> the quality
> of the support and infrastructure.  Also, if business volumes turn out
> to be very high, then the scale will increase margins, but I 
> would guess
> that that won't happen in the first year.  That is one of the reasons
> for proposing a one-year test; that should give you and us the market
> data we need to decide how to proceed in the future.
> 
> Another point that was made in the proposal is that it is 
> important that
> the price be set high enough to avoid high volumes of abusive
> speculative subscriptions.  Otherwise, we will end up with a similar
> problem with the WLS as we now have with the deleted names 
> issue.  

Unfortunatly, if the price is high, it will not decrease the load
on the current system (which you said will still exist after WLS is
implemented),
as much as if it was low since people will still 
fight over names that are not worth the high price, which most are not.

> That has become a very high cost item for us in the regular registration
> business.
> 
> It will be up to registrars to establish their own retail price, so it
> would be up to you to set your own price for your customers.  

With the brass-knuckled competition that exists, 
I predict that the retail price will be about
$1 more than the registry price.

> Depending
> on the value of the name, I would think there is lots of room 
> to play on
> your side.  

I disagree.  We will not be able to charge more just because the value
of the name is more due to competition.  We wont be able to guage
value because as soon as a retail person says $41.95 they'll get it
at the registrar next door.

> There certainly seems to be plenty of demand.  In fact, I
> would think that you as a registrar would have the chance to make even
> better margins than we will.

Please explain how we will be able to do that when you have a monopoly
and we are competing like crazy.  Seriously.  I'd like to know how
to make money on this.  Not that that is the only issue, but 
if you could explain how, I bet you'd get more support from registrars.

> 
> With regard to the limit on the number of transfers allowed to other
> domain names, that is primarily a customer support issue.  
> The more that
> are allowed the more impact their is on our systems and our support
> staff, including the possibility of transfer complaints.  
> What would be
> helpful to me is if you could explain why you think three is not
> sufficient.  I don't know that there is any magic to the 
> limit of three;
> if there was good rationale for changing this, I would certainly be
> willing to take it up with our business development team.
> 
> I hope that helps.
> 
> Chuck
> 
>  
> 
> 
> 
> > -----Original Message-----
> > From: Tim Ruiz [mailto:tim@godaddy.com]
> > Sent: Thursday, January 03, 2002 3:06 PM
> > To: 'Gomes, Chuck'; registrars@dnso.org
> > Subject: RE: [registrars] Comments on Proposed Domain Name 
> > Wait Listing
> > Service
> > 
> > 
> > Chuck,
> > 
> > I would be interested in any detail you can share that 
> > justifies the price
> > point you're considering. Similar services now available 
> have end-user
> > prices close to that already. Given the monopoly you will 
> have on this
> > service, and that the registrars will be selling it for you, 
> > it would seem
> > you could roll this out for 70-80% of what you're proposing. 
> > Granted, you
> > offer 100% success rate, but we need to be able to sell this to our
> > customers. Some will understand the difference, others won't.
> > 
> > Also, in 2.a.vii you state that a the subscriber may change 
> > the domain name
> > the subscription is tied to only 3 times. What is your 
> > rationale for that
> > limitation? Why not allow them to change it as often as they like?
> > 
> > Best regards,
> > Tim Ruiz
> > Go Daddy Software, Inc.
> > 
> > 
>