DSTI/ICCP/TISP(2004)2/FINAL 

defensive registrations these data considerably overstate the real demand. The available evidence also 

indicates a considerable proportion of registrations, under the new gTLDs, have been made by traffic 

aggregators and speculators. 

The number of domains registered under 

.biz

 and 

.info 

actually

declined in the final part of 2003. In 

December 2003, registrations under 

.biz 

declined by just over 90 000. Registrations under 

.info

 declined in 

both November 2003 and December 2003 by more than 50 000. By way of contrast, registrations under the 

traditional gTLDs 

(.com

, 

.net

 and.

org

) continued to increase. The combined impact of both these trends 

was that new gTLDs sharply fell in proportion to total gTLDs. This raises the question of why this 

occurred and why 

.biz

 seems to have been hit harder than 

.info

.   

The most likely reason for the fall off in the number of domains under 

.biz

 and 

.info 

is speculators 

failing to renew names. This suggests that these speculators over estimated the demand for names under 

the new gTLDs or were not good at predicting what names would be in demand. A counterbalancing trend, 

in the case of 

.info, 

may have been the development towards international domain names at the second 

level which had yet to occur under 

.biz

.   

While the official data were only available to the end of 2003 at the time of writing, indications from 

other sources suggest 

.info

 continued to lose market share in January 2004 before witnessing an increase in 

February 2004. At the same time 

.biz

 appears to have stabilised losses in January 2004 and grown in 

February 2004. This was at a time when registrations under the original gTLDs continued to grow. These 

data underscore the challenges facing new gTLDs in winning market acceptance. 

The role of cyber squatters, speculators and traffic aggregators needs to be carefully considered in 

assessing the demand for new domain names. The cyber squatter phenomenon is well known and has been 

the subject of extensive work by WIPO. Domain name speculation on generic words, not subject to 

trademarks, or three and four letter strings of letters is also well recorded. Perhaps less well known is the 

role that so called traffic aggregators play in the economics of domain name speculation.   

The original `business model' for cyber squatting was relatively simple. Cyber squatters would 

register names associated with business or social activities of other entities, with no intention to use them 

other than in reselling the names at a higher price than they paid. In some cases this also involved creating 

a Website with content designed to `blackmail' the entity associated with that name into purchasing that 

name (

i.e.

 the entity would not have otherwise cared if the registration had lain dormant).

31

 Speculators, on 

the other hand, register domain names that may or may not be associated with trademarks with the intent of 

selling them at a higher price. By June 2001, the owners of the site  DomainCollection.com  had 

registered over 600 000 domain names which were available for resale.

32

 From both these areas of domain 

name registration a further category of registrant emerged in the secondary market for domain names. 

Traffic aggregators not only speculate in domain names but provide a source of revenue for 

speculators and cyber squatters. The business model works along the following lines. Traffic aggregators 

enable anyone with a domain name they are not using to `park' that domain with them. If a user types or 

mistypes a domain name which has been parked, they are shown or redirected to a Website which is 

generally presented in the form of a directory. The traffic aggregators, in turn, sell paid links to businesses 

or space to advertisers. The owner of the domain name, in turn, receives a payment every time a user 

`clicks through' to the entity paying for the link. Advertised returns for `click throughs' range from 

USD 0.02 to USD 1.80.

33

In some cases speculators or traffic aggregators register generic names that they believe may generate 

traffic to their Websites. In other cases they register names that are identical or closely resemble the names 

of other sites that are well known or generate significant traffic in their own right. For example, if a user 

 29