'Fierce struggle for internet's future is like Wild West'

From its earliest days the web was dominated by a handful of suffixes: dot-com, dot-co.uk, dot-org…

But in recent years the internet’s caretaker, ICANN, launched a scheme under which anybody with $185,000 could bid for their own top-level domain (TLD).

Dozens of companies such as BMW have already staked a claim on their own brand names, while others have opted for generic terms like dot-beer and dot-porn.

Whenever there was competition the process went to auction. Many tens of millions of dollars changed hands.

The draw was that millions of domains can be leased out from under each TLD. Telegraph.co.uk, for example, is just one of millions of domain names under dot-co.uk.

Buy a short, snappy one for a good price, watch it become the next dot-com, and you could profit enormously. Register one which nobody wants and you've wasted $185,000.

Google has, among others, bought the rather generic dot-app for around $25m. This gives it the sole right to create web addresses such as Google.app or Android.app, and to charge others for their own. Amazon then beat the search giant to dot-buy, but it cost them a reported $4.6m.

Not all of the bidders are technology giants with deep pockets. Entrepreneur Daniel Negari launched a start-up in the US based around his purchase of dot-xyz and dot-college. The former has already made him $6.4m.

He has “several” others that he’s bought from the original winners on the open market that are yet to be announced.

In one particularly frenzied auction he lost out to Amazon on dot-now, and has also faced the well-funded domain registrar Donuts which won 200 TLDs.

The competition is “fierce”, says Negari, and has created a “Wild West” scenario where investors are making a land grab for the future of the internet.

His company, gen.XYZ, has been created to monetise his TLDs by selling domains wholesale to registrars for $8 each. Dot-xyz already has 840,000 registered domain names; they've sold well in emerging markets where internet users are not conditioned to see dot-com as the only reputable choice.

“In China for example, the letters dot-com don’t mean anything to them. With dot-xyz, it also doesn’t mean anything, but at least they can remember it because they know their ABCs,” Negari said.

He believes that the new TLDs “will slowly chip away at the dominance” of dot-coms. “It gives people a better naming option.”

The problem being that dot-com has been around so long that it can be hard to claim short, memorable domain names that haven’t already been registered.

Promoting this issue has caused problems with the company that manages dot-com, Verisign; it’s suing Negari for false advertising over a video (shown below) which claims it’s “impossible” to buy the right dot-com address.

The lawsuit also takes issue with claims that dot-xyz is the most popular of the newly-launched TLDs. They argue that many of the 800,000 domain names were actually given away for free to make it look more popular in league tables of registrations.

“This is the Wild West,” said Negari. “There’s upstarts like mine that are coming out and saying ‘hey, dot-com, we’re here to play’, and then the 800lb gorilla’s pounding on its chest and saying ‘oh, we’re just going to crush you’.

“That’s why they’re suing me, right? If you read the lawsuit it’s pretty much rubbish. It’s focused on them trying to bully me, to be unfair, to slow down the competition.”

Verisign has not publicly said what it's motivation was for bringing the action, and was not willing to provide a comment for this story when contacted.

Negari denies claims that he gave away domains because of any ulterior motive, and says that even once they're removed from the equation dot-xyz is still the most popular new TLD. It would have around 500,000 registrations compared to the 200,000 under the second largest, dot-club.

“They’re suing for false advertising, and that’s one of the items… claiming that dot-xyz is actually not the number one new domain extension, when in reality it is, even if you take out the free domains. We’re still number one by far,” Negari says.

“That was a registrar promotion that we had limited involvement with. The registrar came to us and said ‘hey, we want to buy a certain amount of domain names’ and we were like ‘great’. And then they decided to give it away to their customer base. I’m not going to say no to that.”

Despite the problems surrounding the lawsuit, Negari hopes that dot-xyz will become as common a sight online as dot-com is today, and that such expansion is vital because of the increasing number of people online and soaring demand for domain names.

“I think that over the next five or ten years there’s going to be over a billion domain names in existence, and right now there’s 300m domain names in existence,” he said. “ There’s people in China coming online today who have never had reliable internet access.

“My dream and my passion behind dot-xyz is for it to truly become for every website everywhere. We made my application fee back in a few days, really. It’s been an amazing run. The economics of the business are fantastic. There’s no better business in the world.”