SPECIAL EDITION REPORT: Are IDNs the Next Big Thing? These Two IDN Speculators Sure Seem to Think So!

DEFINITION: Internationalized domain name

From Wikipedia, the free encyclopedia.

An internationalized domain name (IDN) is an Internet domain name that (potentially) contains non-ASCII characters. Such domain names could contain letters with diacritics, as required by many European languages, or characters from non-Latin scripts such as Arabic or Chinese. However, the standard for domain names does not allow such characters, and much work has gone into finding a way around this, either by changing the standard, or by agreeing on a way to convert internationalized domain names into standard ASCII domain names while preserving the stability of the domain name system.

IDN has, by the standards of the Internet, a long history; it was originally proposed prior to (by M. Duerst) and implemented in 1998 (by T.W.Tan et al). After much debate and many competing proposals, a system called Internationalizing Domain Names in Applications (IDNA) was adopted as the chosen standard, and is currently, as of 2005, in the process of being rolled out.
In IDNA, the term internationalized domain name means specifically any domain name consisting only of labels to which the IDNA ToASCII algorithm can be successfully applied. ToASCII is based on the Punycode ASCII encoding of nameprepped (normalized) Unicode strings

SPECIAL EDITION REPORT
Are IDNs The Next Big Thing?
These Two IDN Speculators Sure Seem To Think So!

IDNs, internationalized domain names, have been a very hot topic as of late because of the growing awareness by the countries using non-ASCII languages combined with the highly anticipated release of IE7, which is believed to be IDN compliant. For those not familiar with IDNs, they are available for all extensions and use a Punycode to turn ASCII characters into non-ASCII characters. It goes without saying that any native speaker of a non-ASCII language would rather have a domain name in their local ASCII characters and not those of non-ASCII origin. With over 90% of all Internet users running Microsoft’s IE, Internet Explorer, it really is a critical factor in the success of IDNs. Being that the current version of Internet Explorer, IE 6, is not compatible with IDNs could very well be one of the reasons why they have not been so successful to date. This is also one of the key reasons why IDNs could potentially explode in the near future.

While web browser Firefox has been IDN compliant for quite some time the number of users is not significant enough to have a large impact on the IDN space. Being that there is not enough acceptance which at the heart stems from Microsoft’s lack of urgency to advance their technology to comply with IDNs. Even though Internet powerhouse, Google, now owns Firefox, it is still a long way from ever overtaking Microsoft’s Internet Explorer as the leading web browser. However, at this point it really doesn’t matter as IE7, which is set to become available in the very near future, is expected to be fully compliant with IDNs.

Recently, there have been several reported IDN sales that would make one believe in the future of the IDN space. Although a minimal number of IDN sales have been reported to date do not count them out as they really are infantile at the moment. Take the recent sale of Südtirol.info for instance. This IDN commanded a staggering €8,750 ($10,308) and it is a dot-info for that matter. For those that are wondering Südtirol is a place located in the European Alps. Many IDN speculators believe that “place” IDNs will be very successful speculations in the up and coming months and years. This sale in particular is enough to make many believe in IDNs but many need more evidence and there have been several others reported to have sold in the range. Even so, many need more proof that they will actually succeed while other speculators are acquiring them at unconceivable rates.

One critical and underlining factor that would make IDNs seem a tad risky is the possible implementation of IDN.IDNs in which both the prefix and the suffix have been internationlized. Right now, only China is using them and the Chinese government has blocked all outsiders from accessing them but nobody outside of the country would really have the keyboards to access them anyhow. Furthermore, ICANN has not approved any internationlized extensions at this point and if they ever did it would probably take years before one ever came to play as the approval process is rather tedious.

At this point it is hard to say what some of the top IDNs would sell for right now as they simply haven’t changed hands as of yet. Much like the dot-US market, which is still in it’s infancy as well, where many of the top names are held by a select group of speculators. The top names have not been traded yet and the ones that have were all subject to NDAs, so nobody really knows exactly how much they commanded or how much they will be commanding in one, two, three, four or five years down the road for that matter. You still can not deny the fact that IDNs are potentially valuable or extremely valuable for that matter.

Countries that use non-ASCII based languages such as China and India could potentially become economic superpowers with their massive populations and progressive economic and industrial growth. It has been said that the majority of people in India will not be accessing the net by English, but by Hindi, their true native language. China, of course, is no different as their people are most familiar with Chinese, another non-ASCII based language. In fact, the Chinese government has already embraced IDNs and is indeed using them for some of their websites already. This is very important because of this the Chinese public is becoming increasingly aware of IDNs and naturally they too are embracing them. The number of Internet users in both of these countries is growing exponentially each and everyday and the numbers are expected to increase at unfathomable rates for years to come. The majority of non-ASCII based speaking countries fall into this category as well. There is no question that there is massive potential for IDNs for these very reasons. Some believe that a couple years down the road 40% of all domain names will be IDNs. Nobody knows for sure but it certainly is a bold and very possible speculation, especially with China and India’s combined populations being in the billions.

Many speculators have high hopes for IDNs and we were fortunate enough to be able to get in touch with two of the most adamant IDN speculators known at this time, Dave Wrixon and Craig Nine. Both have vested interests in the space and have a tremendous amount of experience to share.

Dave Wrixon is one of the most passionate IDN speculators known at this time with well over 2,500 IDNs in his domain portfolio at present. We thought that would it be a great idea to delve a little bit deeper into his mind and find out where his passion for IDNs stems from.

Here is what top IDN speculator, Dave Wrixon, had to say:

Q: db – What is your name, how old are you, where are you from and how did you come to be involved in domaining?

A: DW – My name is Dave Wrixon. I am 46 years old. I became involved in domaining some 5 years ago when I set up my own company website for a bridge inspection consultancy. I tried to pick up BridgeInspection.com and acquired the Snap but it went to BuyDomains.com, who I found out are big time speculators. That told me that this was big business. I have been hooked ever since.


Q: db – What got you involved with IDNs? What about them caught your interest?

A: DW - Well, my main interest previous had been picking up drops, first using SnapNames, then NameWinner and finally Pool. The game changed, at one time you bought an option on the name and when it dropped it was yours. It then changed to a lottery situation and finally an auction. The prices rose so dramatically, that it I felt the likely rewards were no longer commensurate with the risk. I also picked u some dot-CN acronyms from the grandfathered list that weren’t taken up.

One day I saw a German IDN go for a lot of money, but had no concept of what I was looking at. I asked a friend of mine from Thailand what’s going on, and he explained the whole Punycode thing. He had bought a few Thai IDN, but was devoting his life to providing a better drop list service.

I was very impressed with concept, but didn’t do much about it for a while. Then one day, I realized that there were online bilingual dictionaries. I then realized that because we were really only looking for single word, this level of knowledge of a language was enough to get going.


Q: db – What kind of experience did you have with domaining leading up to your involvement with IDNs?

A: DW - My previous experience involved picking up drops, mainly dot-Net and then selling them at Sedo. Lucrative but hard going and I realized the supply of good names at reasonable prices was drying up.


Q: db – When exactly did you start speculating in IDNs?

A: DW - I started in 2003 which was about 2 year after the start of the VeriSign dot-com test-bed. Apart from day one this was the best time to start, but we were probably not ambitious enough to start with, registering quite a few mediocre names. Then the initial wave of IDN test-bed drops came through and we realized we had struck gold. Many initial investors became disillusioned or just totally confused when the encoding changed, and the initial registrar Network Solutions that had by this time split from VeriSign, told them to transfer out or loose their names.


Q: db – How many IDNs do you currently hold?

A: DW - We have about 2,500, which is a lot to manage. At the moment sorting out IDNs takes a lot of time and is now complicated by the fact that we are invested in 16 distinct languages/scripts.


Q: db – What are your best IDNs?

Must be Asian, not Latin script. Longer-term Chinese domains will be the most valuable.

A: DW - It’s difficult to know, but what sells right now are city names. People cannot get enough of these. Longer-term the generics will come into their own.

Not really sure which is the best, we have so many good ones. I think the Hindi/Marathi for finance that I registered this week could be massive.


Q: db – How much traffic have your IDNs been receiving?

A: DW - IDN are not currently producing much traffic. Generally maximum of 3 uniques per day, but we have had surges from China up to 150 uniques per day.


Q: db – Out of all of your IDNs which one receives the most traffic and how much traffic does it receive exactly?

A: DW - The best domain on a regular basis for traffic is the Japanese for translation.


Q: db – What kind of revenue do these IDNs produce and how are you monetizing them right now?

A: DW - The revenue to date is very disappointing. It is limited. IDNs at the moment have a P/E of about 10K.


Q: db – What kind of growth do you project for IDNs for the future?

A: DW - Exponential. Within 10 years 40% of all domains will probably be IDN.


Q: db – Do you plan on developing all of your IDNs as the traffic increases?

A: DW - Yes, I think so. Longer-term revenue is the key, but we will need partners on board if we go down this route.


Q: db – What are your thoughts about the current state of the countries using IDNs at this time and what kind of growth do you think will be seen as time goes by?

A: DW - I believe that IDN will explode as IE 7.0 becomes available. The SEO advantages are overwhelming. The reason is that are not much used at the moment is that in the key markets there is very little adoption of browsers that support them. Consequently, there is no content as to use an IDN URL at the moment would be very damaging. Without content, even those that have browser support are going to get bored typing in the local characters but getting nothing back.

IDNs are quite widely used in Korea, but Japan is the market that matters in the short-term. There success in China is assured as the Chinese Government are in the process of switching over their own websites.


Q: db – Do you have any tips for those want to start speculating/investing in IDNs?

A: DW - Join www.IDNForums.com, which is still free. Do it now! In Japan and China the initial land rush is all but over. There are still opportunities in the Arabic and Russian markets. Do not overlook India. It is thought only 3% of Indians will actually use English to access the Internet.


Q: db – Are there are tools and or websites in particular that maybe useful for beginners?

A: DW - You need translations. You need a good IDN enabled registrar such as www.DomainSite.com, but above all you need view and opinions of peers which you will get at IDNForums.com.


Q: db – How important do you think it is to have a full understanding of the languages before speculating on the IDN space?

A: DW - I didn’t. I couldn’t the breadth of our speculation would have made it impossible. You only need one word at a time and be able to copy and paste. How difficult is that!


Q: db – Is there anything else that domainers should know about IDNs?

A: DW - I believe that this is the last Internet land rush of any significance. If you have failed to capitalize on the others, don’t miss out. This is your last best hope of striking gold.

Craig Nine, is another passionate IDNer, so passionate in fact, he dedicated a forum specifically to IDNs. Craig’s forum, IDNForums.com, is one of the best resources for IDNing (internationized domaining) on the web providing IDNers with the knowledge and tools they need to start speculating on the IDN market. Not only does Craig run the forum but he is also the holder of some of the top Japanese IDNs in existence.

Here is what top IDN speculator and owner of IDNForums.com, Craig Nine, had to say:

Q: db – What is your name, how old are you, where are you from and how did you come to be involved in domaining?

A: CN – My Name’s Craig Nine, currently I’m 32 years & living in Tokyo, Japan, but originally from Boston. I became involved in domaining by being a website developer, & SEO consultant for some companies in Tokyo.


Q: db – What got you involved with IDNs? What about them caught your interest?

A: CN – I’m 100% American but bilingual in Japanese, reading & writing. I was on another forum & had a bit of a discussion about IDN domains with Dave Wrixon, actually I was very opposed to them & completely ignorant as to their progression. Thinking about it from the Japanese perspective & doing a bit of research, I started to realize that it was coming close to the time when IDN domains were finally going to be usable even though they have been available since 2000.


Q: db – What kind of experience did you have with domaining leading up to your involvement with IDNs?

A: CN – I own a lot of domains but was very bad at selling domains because my focus was Asia. The marketing value of IDN domains & SEO value outweighed every western thought of negative aspect of an IDN. Usually most westerners will keep saying Japanese are just used to English domains, or these Japanese domains won’t be good for international use, or since it has dot com at the end it would be troublesome to switch the language while writing.
Companies in Japan pay millions a year on advertising on trains, short commercials etc. What great value would it be to have a Japanese character dot com that actually could be seen & instantly understood what it was.. Plus the percentage of consumers that would be able to just type in domains would increase a thousand fold. Most people don’t know this but type-ins are almost non-existant currently because Japanese don’t usually have confidence in functioning in English. This of course in referring to Japanese in Japan & not English speaking Japanese


Q: db – When exactly did you start speculating in IDNs?

A: CN – I just started buying IDN domains in August 2005 but my bilingual skills let me get a lot of Japanese domains a lot quicker than most IDNers.


Q: db – You recently start a forum dedicated to IDNs, IDNForums.com. What motivated you to do this and what have you learned from the process? It really is a great resource for IDN domaining as it’s complete with an array of plentiful information on IDNs as well as necessary tools that you will need if you want to get involved with IDN domaining. How did it come to be and where do you see it headed?

A: CN – I created IDN Forums because I was sick of getting reasons why my premium top keyword domains were only worth registration fee. I own the Japanese equivalent of the term Anime which even in the US is over a few hundred million dollar a year market. I own the original Japanese term anime but was told it’s only worth registration term because it doesn’t have an an ext in the OVT results. I thought this was ridiculous & there needed to finally be a place to find out how to access value of IDN domains, increase awareness, & provide a bit of research about how to use IDN domains. I plan to expand the site a bit more this year & launch a few IDN resources.


Q: db – How many IDNs do you currently hold? What are your best IDNs? How much traffic have your IDNs been receiving? What is your best one? What kind of revenue do these IDNs produce?

A: CN – I now own about 45 IDN domains. My best IDN is 派遣.com. It is Japanese for a recruiting or job placement company. The Japanese registry actually reserved the dot-JP so no one can own it. The others are simple terms like 髪.com (hair), テレビゲーム.com (TV game) パソコンゲーム(PC Game), & セール.com (sale). I’m still doing lots of research mainly with search engines & IDN domains so I don’t have a lot of interest in buying to just park domains. I need to expand the actual use of these domains even in the Japanese market. Otherwise they become useless for Japanese if each domain goes to a Sedo parking site.


Q: db – How much traffic have your IDNs been receiving?

A: CN – I have a few that are in experimental mode to test traffic. Some of them get traffic because of a few experimental things that I’ve done. I haven’t really parked any because the parking services don’t know enough about IDNs yet. It’s not their fault it’s just that the optimization for IDNs has not been perfected just yet.


Q: db – Out of all of your IDNs which one receives the most traffic and how much traffic does it receive exactly?

A: CN – My domain テレビ局.com (TV Station) receives the most traffic more than 400 uniques a month. This is only because it has a really good position in the search engines for my name. I think I should also mention I sometimes act on a very popular Japanese comedy TV show with the two top Japanese comedians. This is one of the reasons I’m sure I can develop a few popular Japanese sites.


Q: db – What kind of revenue do these IDNs produce and how are you monetizing them right now?

A: CN – I’m not going to rely on parking of my IDN domains. I have a few general hot categories & plan to earn revenue through creating Japanese portals or selling the sites. I’d rather create a site with content that I can promote than park it & not being able to add backlinks to my site.


Q: db – What kind of growth do you project for IDNs for the future?

A: CN – I see Japan using IDN domains very soon especially after the release of IE7. I say it will take 2 years for them to be used commonly if IE7 comes out this spring.


Q: db – Do you plan on developing of your IDNs as the traffic increases?

A: CN – Of course, I am thinking of creating my personal Japanese blog with an IDN domain for fans.


Q: db – What are your thoughts about the current state of the countries using IDNs at this time and what kind of growth do you think will be seen as time goes by?

A: CN – Well, the Japan registry already foreseen the future. They reserved high selling premium dot-JPs. The Japan registry is already working with Google & Yahoo to create useful Japanese IDN sites to increase awareness. This is just a theory but I’ve recently been thinking that the search engines might even be given a bit of a SERP boost to IDN sites to increase awareness.


Q: db – Do you have any tips for those want to start speculating/investing in IDNs?

A: CN – When buying IDNs please keep it simple initially. Think about the region you want to target. You can still get many simple keywords in many languages.


Q: db – Are there are tools and or websites in particular that maybe useful for beginners?

A: CN – Other than IDN Forums there isn’t much info in English about IDNs.


Q: db – How important do you think it is to have a full understanding of the languages before speculating on the IDN space?

A: CN – It’s not a requirement. If you can use an online translator you can find at least a few domains. You just have to make sure you understand that translations could have different meaning. On our forum I try to correct wrong Japanese translations. I don’t want anyone to get cheated.


Q: db – Is there anything else that domainers should know about IDNs?

A: CN – The IDN market doesn’t really open till Microsoft releases IE7. Most Japanese use Windows & not being able to even access these because of IE not being IDN compatible hindered the progression of IDNs. Most people hear IDN & think of spoofing, etc. That’s not what it’s about. There is too much of an advantage for countries like Japan, Russia, China, & Japan, etc to not believe that IDNs will be used.

We were also fortunate enough to have Jothan Frakes, Vice President of Name Intelligence, and Gavin Brow, CTO of CentralNIC, extend their opinion about internationalized domain names.

Here is what Jothan Frakes, Vice President of Name Intelligence, had to say:

”IDN is a hot topic, and it will be discussed at the upcoming Domain Roundtable Conference in April. We'll have big names in the industry talking on the current state of events in Internationalized Domain Names (IDN) and some of the future trends.

There is a catch-22 about the technology, in that IDN will become embraced upon use, and it will also become used upon belief that it is becoming embraced.

Thus far, browser support and widespread adoption has been trickling, even though Mozilla/Firefox had embraced it. We'll see the figures improve on adoption and use now that things like Homonym spoofing and other misuses have been identified and being addressed, plus, the huge catalyst in driving corporate adoption: Microsoft has put concerted efforts into making IDNA and local language support in their efforts with industry participation, and their next browser apparently will be IDNA from early reports.

From personal experience, I hear frequently that IDN.IDN is the interest for folks who work with namespace that requires additional effort to swap between pinyin, bopomofo, or nihongo input and then add a '.com' or local ccTLD in roman on the end of a web address. This is far from available now, but the technology we have now is pretty solid in its performance.

In First Come First Served scenarios, such as domain registration, the old adage that "you get the best seats if you show up to the concert early" applies.

Adoption will drive values, once traffic is happening, and the right things are in motion to start seeing increases in adoption and traffic. Advertisements in print media or on busses in local languages that show URLs as .TLD will impress and amaze, especially in regions that embrace local language over all else.

Microsoft's strong support for local language, coupled with more and more viral adoption is going to drive up use and thus value.

Still, speculation is called speculation for a reason. There is risk attached to any speculation, but the rewards are there, especially given the size of the world population that would adopt the technology compared to the amount of people who are honing in on the available keywords and namespace in "xndashdash"-land.

The downside to current IDN speculation would be that if an IDN.IDN came out, it would likely be a category killer. There are a whole lot of things that need to iron themselves out in being addressed in delivering IDN.IDN, so these are a little ways out yet.

In contrast to the growth we see in the non-IDN namespace, IDN does not appear to have the same traction, but it also means that the really valuable words are out there.”

Here is what Gavin Brown, CTO of CentralNIC, had to say:

”It seems that Jothan and I are of one mind about this issue, since he seems to have said pretty much what I was going to!

I think the principle blocker on the widespread adoption of IDN is the
lack of IDN domains at the top level (so called "IDN.IDN" TLDs). IDNs
are much less useful without them. The Chinese government has used its
control over the Great Firewall to introduce some IDN.IDN TLDs for its
own population, but which are not visible to the outside world. The
irony is that it doesn't really matter, since only Chinese speakers
would ever be interested in using them, and only Chinese speakers would
have the keyboard layout required to be able to type them in!

As you probably know, it takes several years, a great deal of work, and
a bundle of cash to get a Latin-script TLD approved. I can easily
imagine the process for an IDN.IDN domain taking a lot longer.

From an intellectual property point of view IDNs raise all sorts of
issues, in addition to the homograph spoofing we saw last year. If
you've trademarked a phrase (like "always low prices", in the case of
Walmart), you now need to register "总低价.cn" and "항상 저가.kr" as
well as "alwayslowprices.com" (not sure that's a good example, since
Walmart hasn't actually registered that last one!)”

All and all nobody can be 100% certain what the future has in store for IDNs but you can not deny that there is great potential for some serious gains within the space but with all speculations there is an associated risk. It will be interesting to see how everything plays out as all of the pieces of the puzzle come into place. We will let you make your own decision on the space. Are IDN.TLDs here to stay? Time will tell. If they are there is no question that these will be exceptionally valuable commodities with time.

Source: IDNForums.com, Wikipedia.com

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