Schilling Comes Clean on Domain Hike; “Understands Price Increases Unpopular”

The world is in an uproar at the moment – the domain world that is. New gTLD domain names, those under the Uniregistry umbrella (which is a lot of them), will experience “significant” price hikes in the coming years, some of which could be up to 300% higher than originally released at.

The domain community is not happy. There are many good reasons why people are in an uproar; for one, you have domain investors who may have purchased large numbers of these domains; second, you have startups which operate on a tight budget who may have purchased a new domain because they could not afford a more expensive name and went with a cheap reg-fee domain (from $10/year to now, potentially $300/year each), and you have all kinds of other situations where price hikes just aren’t good PR. But registry CEO Frank Schilling took the heat when he was interviewed by Andrew Allemann for his Domain Name Wire.

Schilling basically laid out the facts of why this needs to be done – and in a nutshell, it’s because new gTLD domains just aren’t doing well enough to ‘subsidize’ their existence with more profitable and successful Uniregistry endeavors. It’s a difficult but necessary business decision, according to Frank.

This is two-dimensional. We made a business decision that we can either continue to subsidize underperforming strings using our other business units profits or we can say that – that’s not the right way to run a business, that’s not healthy, it’s not sustainable, and so we can rip the Band-Aid off now, and that’s what we did, nobody likes it. I get it, I get that people hate it. But I am not going to apologize for it because you know we’re all in a new namespace where we’re trying to figure out what’s best; we’re trying to grow the space, that’s the reality of business. I bought a bunch of .com names a year ago Andrew, and they’re not worth anything. I have made some mistakes. I dropped… what am I going to do with those .com names? Am I going to drop them? Am I going to right-off the namespace, No, I pick up my tools and I try again. Right? That’s the nature of domaining. You know, you take risks. And new namespaces come along – this could go somewhere really great, or it could go absolutely nowhere. And you take a risk, so you can try to get ahead.

Andrew did not hold back with even tougher questions. He asked straight out about Uniregistry specifically marketing to domain investors over the last few years that this [new gTLDs] is a ‘great opportunity’ and that these people will or could potentially lose their investments.

“Well in dot-link and dot-click they’re not. Then those are the strings I think I have been pretty much on message the whole time. You know, I have said buy in low fixed price domain spaces all along. So people who watch what I do and watch what I say and comment on blogs, don’t get to sort of mix and match and cherry pick my answers to certain questions and plug them in a certain way, and use them against me, it’s not equitable and I won’t put up with that. I understand that price increases are unpopular; but I’m not telling domain investors go buy… backup the truck and buy as many of these strings as possible and then raising the price. Had domain investors bought, backed-up the truck and bought tens of thousands or hundreds of thousands of these we would not be raising the price as much because we would have a viable namespace, right. The fact that they didn’t buy means, OK, great, let’s go after the registry space.

If you are upset about the price increase I definitely recommend you take the time to listen to the entire podcast. It is rare – very rare, that you will have an executive in this position speak candidly and opening such as how Frank did and everyone should hear his point of view before making or passing final judgement. This was certainly an unpopular move but you have to hand it to Uniregisty and specifically, Frank, for coming out and opening up, honestly facing the facts (and the customers) in a public forum like this. Only in the domain industry you will see this. Thank you Frank.

John Colascione

About The Author: John Colascione is Chief Executive Officer of Searchen Networks Inc. and Internet Advertising Inc. He specializes in Website Monetization, authored a ‘how to’ book called ‘‘Mastering Your Website’, and is a key player in several Internet related businesses through his search engine strategy company Searchen Networks®