Africa fumbles during internet land grab

BUSINESS

By Howard Rybko, CEO, Syncrony

In mid-June of 2012, when the big Internet players revealed their cards in the highest stakes game in web history, the best Africa could come up with was four predictable geographic plays (.JOBURG, .DURBAN, .CAPETOWN and .AFRICA) and a few MNET pals covering their brand names. 

At stake is the ownership of the digital real estate represented by the few hundred new domain name extensions that will start appearing in 2013. These include extensions like .ZULU, .WEB, .LOTTO and a possible 1,400 more. The new extensions are designed to unclog the constipation resulting from the lack of availability of dot com names (and the handful of alternatives like dot net, dot biz and dot org).

The problem is that no one really knows how this is going to pan out. It is possible that the new names may cause an online earthquake that will change our digital business models for ever.  However some big players like Facebook haven’t even bought a ticket to this movie, by applying for .FACEBOOK.  Many others like Microsoft, Apple, Jaguar and Sony have been only slightly more adventurous, and have come up with the $185,000 required for each registration, simply to cover their brands and trademarks.

Closer to home, our entire African continent accounted for a paltry 13 English name applications. Peanuts compared to the enterprising Donuts Inc, who went out on a $65 million limb and applied for a staggering 307 new Top Level Domains. The names that Donuts (Domain Nuts) have applied for run the generic gamut from .RUGBY to .CASINO, .FAMLILY, .BLOG and even a controversial few like .SUCKS.  If things turn out as Donuts’ hope, they will profit by making it affordable and simple for businesses and individuals to lay claim to their online territory.

The Google Play?

After Donuts the next biggest applicant was Google. Under the quaint name Charleston Road Registry, they have applied for 101 top level domains.  As a long time Google watcher I have pondered long and hard on the possible strategy behind Google’s play. So have many others. (Note that Amazon has applied for 76 largely generic names and may possibly have a similar strategy, since many of their applications are in competition with Google’s.)

It seems to me that at the moment that Google runs a one trick magic show, producing an ocean of cash from advertising that is generated by search. Most of this revenue comes from the millions of small and medium businesses who are plugged into Google via their credit cards and tithed monthly for targeted traffic.

In order to grow, Google needs to be connected to more credit cards. Since about 70% of small companies worldwide are yet to obtain domain names or an online presence, Google needs to find ways to enable these kinds of enterprises to get online.

Domain registration and verification are huge hurdles for newcomers.   Finding an appropriate name is tough, but wiring the new domain to email and web content is much harder. This is further complicated by yearly fees and the various service providers who become involved.

What if Google provided a free domain name registration service? A service that would allow users select a meaningful name from a range of possible domain extensions, plug in some basic company info, provide a list of mailbox names and then one click later they could be fully online.

At this point, all the newcomer is missing would be some customer feet, which could easily be provided by a complimentary Adwords voucher.

Time will tell what the exact Google strategy is going to be, but if Google and Amazon get it right, Facebook may well regret the IPO preoccupation that caused it to miss the next Internet tsunami.

Other players bound to be affected by all the new domain name strategies  will be many of the niche feeders in the web ecology, like the ISP’s who use the domain registration process as a route to netting fresh paying customers. Also affected could be the huge businesses of Network Solutions, VeriSign and others who rely on revenue from bloated charges for yearly domain registrations and SSL certificate renewals.

The lucrative game of domain investment - which has seen some traders make huge windfalls - is bound to change as well.

It is definitely going to be an interesting year ahead for online organisations.