Fund FAQs



Q?What is your added value? What sets you apart?
A.

First. In summary:

We are the only regulated commingled investment fund that can provide external investors with the opportunity to gain exposure to the ICANN Program.  This is a major strategic development in the evolution of the Internet, which ICANN is currently in the process of unravelling. It is an asset class that ordinarily is closed to outside individual investors; for example, you can invest in Google or Amazon (two participants in the New gTLD program), but not specifically in their generic TLD operations. It also offers significant and entirely uncorrelated returns compared to the financial markets… (Read more)

Q?Will people still type in web addresses or will they use search engines to locate content?
A.

The way Internet web pages are indexed is critical to the success of the new gTLD program. If a user types in a web-address into a browser address bar they will be doing so based upon certain criteria.

For example: If someone is looking for an accountant in New York they may currently type www.newyorkaccountant.com. However, under the new gTLD program they may also type www.newyork.accountant or www.NYC.accountant. The advantage of a New generic Top Level Domain such as .accountant is that it segments the Internet name space into communities of interest, something that the current system of .com, .net, .org does not achieve.

If someone is using a search engine to locate relevant content, it is important to know that all search engines rate web pages on a number of different factors and the Uniform Resource Locator (URL or ‘web address’ as it is often called) is a highly weighted factor.

For example: Currently, if someone is searching on the term “football” one would expect the web address www.football.com to be ranked quite highly. The term ‘football’ in www.football.com is known as the ‘second level domain name’ and the .com is known as the ‘Top Level Domain’ (TLD).

Under the new Internet naming regime, the ‘football’ term can actually be in the TLD (e.g. www.stadiums.football) and is likely to be deemed ‘more relevant’ by search engines than the second level domain name, thus appearing higher up in the organic search listings.

Using ‘Geo-location’, if the searcher is located in Birmingham then the search engine is likely to favour www.birmingham.football over www.birminghamfootball.com.

A telling fact is that Google is one of the largest applicants (Google has applied for over 100 TLDs), this a key indicator of the direction in which Google believes the Internet name space will develop.

Q?With so many more TLDs available on the market surely the number of second level domains registrations per TLD will be lower than previous launches
A.

Dilution will definitely be a factor. However, a more segmented approach to Internet naming is expected to drive up the price per name. For example, consider how much a corporation would be prepared to pay for www.newyork.accountant  or www.tax.accountant. These ‘Keyword’ domains are designed to maximise traffic from search engines. Whilst it is important for companies to secure their brand names in the segment in which they operate e.g. www.brandname.lawyer, it is relatively rare that people will search on the term. It is far more likely that someone looking for a law firm will be looking by speciality, e.g. www.divorce.lawyer or geography, e.g. www.chicago.lawyer or other generic terms such as www.ineeda.lawyer

Under the existing regime, most of the generic second level names have already been snapped up and therefore the cost of acquiring them is prohibitive. For example Hotels.com paid $11m for www.hotels.com. The opportunity, under the new regime, will be for organizations to acquire names that rank in search engines as highly for a fraction of the cost.

In addition, under ICANN rules, each registry must run what is known as a ‘Sunrise period’. In this limited time window, trademark holders will be given the opportunity to secure second level domain names matching their trademarks before a domain name registry opens its doors to the general public. In order to do this a trademark holder must register its trademarks with a body known as the Trade Mark Clearing House (TMCH). Typically, Trademark owners registering names in the Sunrise period, will purchase domains matching their trademarks at a premium price.

Q?Who else has applied to run Top Level Domain (TLD)?
A.

With 1,930 applications there are a large number of applicants. These applicants can be broken down into sub-sets as follows:

– Brand owners:

        operating Top Level Domains for their own use (names are not available to the general public), e.g. .Nike

– Communities:

        operating a Top Level Domain to benefit their community, e.g. .LLC which the Top Level Domain applicant claims to serve the interests of the Community of Registered Limited Liability Companies

– Geographies:

        operating a Top Level Domain to serve specific geographical jurisdictions, e.g. .Africa or .Paris

– Open to all:

      operating a Top Level Domain as a commercial entity, allowing anyone to register second level names, e.g. .webcam or .download

 

Key Players 

Google and Amazon are the best known names involved, having applied for over 200 Top Level domains between them.  In addition, there are 4 other ‘multiple’ TLD applicants (including the DVP backed applicants) which account for the majority of the ‘open’ TLDs. The ‘big 4’ are specialist gTLD applicants looking to operate a large number of strings as commercial ventures.

Domain Venture Partners has funded 60 applications. In 15 TLD applications, the Domain Venture Partners’ backed bid vehicles are the only applicants for the specific TLD term and are proceeding to launch with TLDs now delegated and live on the Internet. The remaining TLDs are in contention with other applicants and will be resolved over the coming months. 

Q?Which are your uncontested TLD applications?
A.

We now have 16 uncontested these are: .accountant, .bid, .charity, .cricket, .date, .download, .faith, .loan, .men, .party, .racing, .review, .science, .trade, .webcam and .win

Q?What other areas is Domain Venture Partners investing in?
A.

The other businesses are all part of the same group and form part of the whole eco system that helps us exploit the full opportunity set of managing and operating the generic TLD (as opposed to ‘flipping’ them).

Q?When do I get a return on my investment?
A.

As soon as any of the TLD’s generate cash, Domain Venture Partners can return it to investors such that there will be a regular ‘dividend’ or ‘distribution’. Each generic TLD is a stand-alone SPV, so investors have direct equity ownership in the assets. Whenever we have a ‘liquidity event’ investors will receive a cash payment, and of course still look forward to the significant additional venture upside and valuation accretion derived from the greater use and development of the new TLD space.