Monday, May 30, 2011

Domain name registration scares Nigerian firms

Several months after the commencement of the auction process for Nigeria’s Second Level Domain (SLD), only 10 companies have so far registered.


The process, which was commenced by the country’s official domain name registrar, Nigeria Internet Registration Association’s (NiRA), has only two indigenous firms, with the others being international institutions with presence in Nigeria. Registering under the SLD requires that such companies will adopt .ng as a suffix to internet address.
Omoniyi Ewete, Chief Technology Officer at Websoft Limited, one of NiRA’s Pioneer Platinum Accredited Registrars, noted that Nigerian companies may be reluctant to register due to the cost.

“Foreign brands are still the only ones that have purchased the second level domains, despite the perceived high cost ($20,000 to $50,000) and the reason is that they are more exposed, have a lot more at risk, and understand real estate value of domains,” Mr Ewete said.

He said Nigerian companies prefer to achieve online presence through cheaper platform for as low as N2000 rather than patronise Nigeria’s official domain registration.

“Auctioning second level .ng domains for $20,000 in comparison to premium domains worldwide are not exorbitant...but as enlightenment increases and more internet penetration, it would drive up the value and appreciation for these domains,” he further said.

Over the years, NiRA has tried to guard the .ng domain and have put up an auction process that puts generic domains at a premium price. At an initial price of N6 million ($40,000), the cost of .ng SLD was later reduced to N3 million ($20, 000), to encourage more indigenous participation.

Marketability
Despite this reduction, the cost of the .ng SLD has raised a lot of questions and controversy, with operators concerned mainly on the marketability of the .ng SLD in the global domains marketplace.
While it is too early to predict, the .ng SLD has for a long time been viewed as one of the most valuable extensions in the domains market for the reason that it creates virtually any verb-related web domain on the surface of the Internet. For example, with .ng you may soon find domain names such as facebooki.ng, pi.ng, etc and could eventually come in handy for URL shorteners such as bit.ly.
“Examples like .ly have shown how lucrative SLDs can be”, says Gbenga Sesan, an ICT expert. According to him, three factors that should be put into consideration are management, content, and protection.
“I think management is now sorted and content will get better as technopreneurs provide local value. And finally, I think there should be a way to protect local businesses from losing .ng identity to global biggies,” Mr Sesan said.

Other contenders
However, operators think that the real issue may be how well the .ng country codes top-level domain (ccTLD) fare amongst its counterparts (.cn, .de and .in) and amidst the global contenders (.com, .net, .org).

A look at the highest reported ccTLD sales in the weeks of December 20 to December 26 of 2010, according to DNJornal.com, shows domains such as coupon.ca (Canada’s ccTLD) being sold for $75,600.
Other top selling ccTLD’s include .de (Germany’s ccTLD), .es (Spain’s ccTLD) and .ch (Switzerland’s ccTLD) which also sold within the 5-figure range. That said, it is possible that the .ng could take on these other TLDs in the domains market. But it is very unlikely that it could outsell some .com domains such as Sex.com (sold for a whopping $13 million in November 2010), or Logo.com (sold for $500,000 in November 2010).

While the .ng SLD may be beyond the reach of small and medium businesses, it is expected that large companies in telecoms, oil & gas and global technology companies with a focus on the Nigerian market would get a slice of the .ng cake.

If this happens, there are indications that this could disrupt the local and global domains market, as big companies would fight to protect their brand name from being used for an .ng domain name.