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Wednesday, Dec 3, 2008
The CEO of a company that administers the domain name for the island nation of Tuvalu thinks it could be more profitable than .com.
Jul 24, 2000 | Lou Kerner has never visited Tuvalu, but that hasn't stopped him from building a business around the group of eight tiny Pacific islands. After all, Tuvalu has exactly what Kerner says we all need: .tv, a top-level domain that's memorable, simple to spell and full of available names. In .tv, you won't need to register something like "Flooz" to start a business. Everything from business.tv to news.tv is open and available.
Kerner's plan is to turn these names into cash. The Tuvalu government agreed in November 1999 to let his company dotTV administer the domain, selling names and managing the database. The island nation owns 20 percent of the company and receives quarterly payments of $1 million, and in return, dotTV gets, well, everything else. To Kerner -- a former analyst for Goldman Sachs who first heard about dotTV last year, when its primary investor, Idealab, asked him to become CEO -- the numbers worked out.
"I had never seen a company with as compelling a business model as dotTV," he says. "I thought from the start that .tv could be bigger than .com, so I was very excited about it."
Still, the domain-name marketplace is anything but stable. Only months ago companies were adding .com to their official company names in the hopes of raising investor interest. Now, many of them are retreating from the suffix as if it were economic E. coli. On one hand, this could make .tv an attractive alternative; on the other, it could be a sign that the world has tired of dot-everything.
And that's not the only challenge before Kerner and his 50 employees. The Internet Corporation for Assigned Names and Numbers doesn't seem to be helping .tv's cause. Just this month, the nonprofit ICANN, which manages the domain space, agreed to release new top-level domains. No longer will we be limited to .com, .net, .org and country codes like Tuvalu's .tv or Tonga's .to. Soon, .store, .arts, maybe even .sex could become available, creating even more open territory -- and it could all be less expensive than .tv, which charges a minimum of $100 per year per domain name, substantially more than the standard $35 for a .com address.
Can .tv compete with .com?
We think we'll be bigger than .com. We think that more clicks will be in .tv than will be in .com. There may be more .com sites, but the leading sites, the ones people go to, will be .tv sites.
Why do you say that? What does .tv have that other domains do not?
First, it's two letters: People prefer shorter domain names and whatever new top-level domains there are will be significantly longer. It's also global, so while .store means store in English, it doesn't mean store in China. That's important; probably 5 percent of our revenues have come out of China. China.tv was sold for $100,000 a year to the second biggest ISP in China.
We can also technologically leapfrog .com, .net and .org with things like non-ASCII character recognition. For example, we're going to be introducing shortly the ability to put Chinese, Japanese and Hebrew characters into the browser.
Ultimately, we think it's the broadest option.
Still, ICANN announced this month that it would release new domain names. There's no word on which names it'll release, but what if something like .stream or .video comes out? How will the addition of new names affect your business?
Well, we think the domain-name market is exploding. There are 20 million domain names registered in the world today, jumping eventually to 200 million. And we think that .tv is the best top-level domain that will ever exist, so to some degree we don't think we compete with anybody. We actually think that ICANN's introduction of new top-level domains would be a great education for the rest of the world that there are other top-level domains than .com.
But .tv is so specific -- don't you fear that its growth is limited to the broadcasting industry?
Well, everyone in the world is going to be a broadcaster. Not all of our registrations have been from the media. Apple, AT&T, Liberty Digital -- the largest pharmaceutical company in Norway is going to be streaming video to their sales force over their .tv address, so it's much broader. What dotTV is not really about -- and this is really important -- is the box in your living room. We want to be the domain for rich media content and streaming video, which is going to be 1 percent of the good Web sites today but 100 percent of the good Web sites in the very near future.
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