100-Year Domain Renewals?

Ryosen writes "I received an email this morning from Network Solutions. Seems they are offering their current customers the ability to renew their domain names for 100 years. Is this is a realistic investment considering most companies don't last 100 years? Given that the Internet is a recent phenomenom, is it realistic to expect it to be the same in 100 years? Will Verisign be around that long? Does this make sense?"

Remember "washpost.com"

[ortcutt]

Remember a couple of weeks ago when the Washington Post lost its email connection because they forgot to renew the domain washpost.com. $9.99 * 100 = $999. That's a bit of money, but a whole lot less than it cost the WP to have no email for a day.

Here [internetnews.com] is an article on the event.

Physical lease

[gruntled]

In the United States, long-term structural businesses leases -- typically for an office or shop in any structure from a one-story to a skyscraper -- top out at 99 years, oftentimes because of state law. For instance, Alabama limits leases to a maximum of 99 years. So the 100 year domain name extension is in line with that rule-of-thumb.

Re:100 years of interest loss

[Eye of the Frog]

You're assuming that registration stays at a flat rate. What do you know you can buy today for the same price 100 years ago? Or even 10? You're also talking about $131 in one hundred years from now. That $131 will most likely carry close to the same weight as $1 does today. Compare what $100 buys you today and what it bought you in 1904.

Re:One Winner

[robbieduncan]

Yes (at least in the UK). If you stop paying your line rental (on a land-line) or stop your contract (on a mobile) then you loose your phone number after a while. If you reconnect you will get a different number.

Re:It's not short sighted....

[S.O.B.]

they'll still, in the long haul, get 4 times as many real dollars out of you.

I think you forgot about inflation. All you need is one or two decades with double digit inflation like we had in the 70's and you'll be lucky if the "real dollars" break even.

Re:One Winner

[Anonymous Coward]

in the world of paper ledgers, accountants and controllers have files called "tickle files" that are organized around dates to keep track of bills that are due periodically.

Re:Um...no

[Anonymous Coward]

Active Directory is a Microsoft thing. Similar to Novell's object hiarchy.

Re:Um...no

[Alan Livingston]

Hmmm... Just how do you manage to get dressed and out the door in the morning?

First, it's not "Other way around". Second, let's assume your second sentence is correct. You contradict it with your third sentence and then give an example with your fourth sentence to come up with a completely incorrect premise. Your logic just makes me want to chuckle and shake my head.

Look, no one's going to let you buy gas at 1970's prices with today's dollars. But that's not what's happening. This would be like buying a crapload of gas in 1970, at 1970's prices with 1970 dollars. Good idea? In the case of gasoline, I don't really know. Where would you store it? What about liability for fires, pollution caused by leakage, etc... It's propbably cheaper just to buy it incrementally.

With this issue, they get to sit on your $10 for $100 years instead of getting around 10 cents a year. Go back and ask your accounting teacher, what's better, money now or money in the future?

Re:Hudson Bay Company

[Lev13than]

Umm... Hudson's Bay Company was founded in 1670. That makes it more than twice as old as Canada. In fact, it's older than the United States, the French Republic and (almost) every democracy currently in existence.

I suspect, however, that this is the exception that proves the rule. The only company still in existence from the original Dow Jones is GE. Everything else has been broken up or bought out [dowjones.com].

Re:Where does the ownership go?

[mosch]

phenomenon is a remake of mehna mehna that was on Muppets Tonight, and starred Sandra Bullock. God, I wish I didn't know that.

Re:It's not short sighted....

[mdfst13]

No, you're missing the point. High inflation *strengthens* the argument, as it is better to get $10 now than *after* double digit inflation. After a period with 100% inflation, the same nominal $10 would be the equivalent of $5 real (using now as the baseline). It would have to inflate to $20 nominal to match the current $10 real.

What NetSol is saying is that they think that inflation in domain name prices will be lower than inflation in general (note that domain name prices have been *falling* rather than rising; remember when the same $1000 would have gotten a domain for *1* year, not 100?). As a result, they are better off getting paid now, even at a discount from their typical rates.

Note: remember that we are talking about the advantages to the *seller* here. Buyers would probably be better off with short term renewals, as they can expect domain name prices to fall relative to other products as name serving, etc. becomes more efficient. All they gain are the transactional savings of not renewing as often.

Not to mention the problem of NetSol going out of business in the meantime and leaving these 100 year domain owners stranded.

Re:Um...no

[KyleCordes]

Well, yes, companies do "forget" :-)

When you do work for large firms, you learn that getting them to actually write a check for services rendered can be quite tedious. It really doesn't surprise me that all that a bill for domain renewal just sits there. It won't get paid until a "champion" makes sure it gets paid.

(As an aside, I find that we can't help but provide better, more responsive service, going the extra mile, for clients that pay their bills promptly without extra work on our part.)

Re:It's not short sighted....

[Anonymous Coward]

Actually, the point is with inflation, NetSol's subscription price for more normal term products are going to increase to match the decreased value of the dollar.

So when they charge $C for a 100 year subscription, they make interest($C, 100years) + $C. Which is probably the case. But remember that since there is a discount, $C = 10 x $X - $D. So equalize the 10 case and the regular case:
interest($C, 100years) + $C = 10 x $X. From the 2 equations, we see for the two to be equal, we must have interest($C, 100years) = $D. So the interest must equal the discount.

You argued that high inflation *strengthens* the argument. This depends on how its used. If NetSol decides their cash funds are becoming devaluated and then decides to invest them, or has already invested them, then you're right. But that's an uncertainty.

On the flip side, what if there's a deflationary period? Again, their strategy will matter. If they've already invested the money and then the value of money deflates, they made, at the very least, an oppertunity loss, and probably a real loss too.

What if there is a stagflationary period, like your parent poster mentioned about the 70s? Slow buisness growth but high inflation. It would be unlikely that the interest rates would be high, so you wouldn't make much by leaving it in the bank. And since it's a slow buisness time, investments are weak too.

So, yes, this is a risky scheme. Any long term contract is inherently high risk.

The big advantadge for NetSol is the cost factor. They get paid a large lump sum, yet their marginal cost for 100 year contracts stays at almost 0 for the rest of the time. Here too there are risks, what if costs increase? Then you're bottom line just fell out. How could this happen? Regulation. Buisness stagnation. Heavy marketing and advertising costs to compete in a more competitive market. Etc.

So, this plan has some advantadges and some disadvantages and lots of uncertainty.

Re:Makes a lot of sense for Verisign...

[3247]

Verisign clearly says on the page linked from the story that they will be renewing your registration annually.

So if Versign dies, they won't be able to do this any longer. So you have to renew the domain (and pay for it) yourself.
Of course, if Verisign becomes insolvent, you won't get your money back either.