The internet is a global resource for the benefit of the many.
-Ram Mohan
The Executive Vice President and CTO at Afilias, Ram Mohan is an influential stakeholder in how the internet is organized and managed. Not only does Afilias own and operate the top seventh top-level domain (TLD) .INFO, Ram is also a non-voting board member of the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit entity dedicated to run the “natural resource” of the internet.
Because the internet infrastructure is not sanctioned by any government, non-profits such as ICANN define policies for how the “names and numbers” of the Internet should run, which involves a “bottom-up, consensus-driven, multi-stakeholder model.” The result is a business model that reacts to a wide variety of stakeholder interests and is driven by a creative auction-like system of new TLD submission.
Afilias’s role in this process is very interesting. Not only did Afilias enter ICANN’s auction with 30 unique TLD submissions (an activity which cost the company $185k for each submission), the company also performs and manages all back-end services for any winning bidder in ICANN’s auction. If Afilias wins the bid for any of these 30 TLDs, it’s possible that the company could have won the managing rights to a large revenue generating activity. However, this depends on the demand for each of these new TLDs; will the public see the value in a .RADIO TLD? If it does, Afilias stands to make a large profit based on the business models their customers create for each of these niche TLDs.
On the other hand, Afilias’s managed services division is easily their best laid plan to take advantage of the structure of the internet. Without any upfront costs (such as the $185k per domain submission), Afilias will provide all back end IT services for the companies participating in ICANN’s auction. Based on their standing with ICANN, any company that wins a new TLD will use Afilias’s services on a subscription revenue model.
Knowing of this managed services aspect to Afilias, it’s confusing why the company would choose to participate in a costly auction for new TLDs. Even though Afilias entered the internet infrastructure industry with their winning bid on .INFO, that business model is less efficient than the managed services model they currently are running. The company is betting high on niche TLDs that they hope will spur demand in the marketplace, but knowing how widely used .COM is, it will be difficult to change buyer’s behavior and move to a different TLD. The stakes are high and the potential profits are large for a winning TLD (such as .ME), but the consistent revenue generated from Afilias’s managed services activities is sustainable.
Indeed, the internet is a resource for the benefit of the many. And Afilias has positioned itself to greatly benefit off of the internet structure with its managed services division. As long as more companies participate in building and growing the structure of the internet, Afilias is guaranteed to incrementally share the successes of this global demand.
What do you think about the future of Afilias … or even of the future structure of the Internet?