International Domain Names

I got a very smart post from an individual this evening relating to IDN's and he(she) hits on some terrific arguments:

Hi Frank,
Just to re-visit your take on IDNs. Traffic to IDNs is slowly increasing, not up there with ASCII keywords yet but Im sure it will equal or possibly even outperform ASCII at some point. When you say they are regional, that is true but when you consider that English is not the most widely spoken language it kinda puts a different spin on it. There are 2 or 3? times the number of Mandarin speakers for example. Certainly internet penetration is not on a par with the US or Europe when compared to China or India for example but this demographic is changing and the 'playing field' as it were, will eventually level out. IDNs are an area where there are a lot of detractors and this is a natural human reaction to something that is not fully understood. I guess it is also an attempt, whether conscious or subconsciously to protect the interests of ASCII domainers as IDNs will only continue to encroach on ASCII domain territory. I also believe IDNs offer the best (And possibly the last?) big opportunity for a novice domainer to grab a piece of the action without having to find $xxx,xxx - $x,xxx,xxx to buy a half-way decent ASCII keyword. Yes it is more difficult for someone who doesn't speak the language of their target domains but that is a hurdle easily overcome with a bit of work and willingness to learn. As for selling things globally I wouldn't really mind too much if my Chinese character domain cracked the 1.3 billion Chinese market and fell flat on it's face in the Latin character using world.
All the best Frank
PS. If you're looking for some top notch IDNs you know where to get hold of me .. ;>)

So I read the National Geographic Atlas quite a bit.  I'm a geography buff and noticed this chart that neatly illustrates my problem with IDN's:

The number of languages in the World are shrinking..  and in an ironic twist the Internet is accelerating that dynamic in ways this chart (which is 7 years old) does not accurately illustrate.  India uses Latin characters (1+bil people) and the majority of the industrialised world is using Latin (South America, Europe, even industrialized Africa).  Industrialised China and Japan use Latin characters (English words) when selling their products domestically..  We get Japanese right hand drive (domestic market) vehicles here in Cayman that are right off the Tokyo showroom floor with Latin character (English) badges.  I think IDNs will have their place but it will be very regional (limited)  I actually prefer numerical names like 514.com where the numbers make sounds in one language and mean something good but are translatable to Latin QWERTY keyboards. Is it better for me if Latin wins over IDN?  Yes.  But in the final analysis, if I thought IDNs had a chance to change the world... I would be joining you in scooping up lots of them.

Thanks sincerely for your well thought out post Mr. Law.

Comments

[Joe Davison]

Hi Frank,

I appreciate your analysis of the IDN market, however, there is one point you brought up that is not entirely accurate.

You said,
"China and Japan use English Latin characters when selling their products domestically."

This characterization is misleading.

I will address the China market as that's the one in which I have the most experience, but generally what I am discussing applies to all Asian markets.

While it's true that companies utilize Latin characters to some degree in the domestic Chinese marketplace, this is mostly done to put forth an "international" image. There is generally no understanding of the meaning behind these characters and they are typically completely ignored.

Think of when Chinese characters are used in the West for branding purposes. The English speaker will look at it, but will not conceptually parse it past the idea of "That's an Chinese character" from which he is unable to draw any further meaning. This is the same situation in China when Latin characters are used, in the reverse, albeit much more common.

The branding, and more importantly, the "mindshare" of generic concepts that domain names (or generally, product names and categories) are intended to represent all exists in the Chinese language and character set.

On my blog I have done an analysis of the top search results on Baidu (China's most popular search engine) for the search term "mortgage" with a specific eye towards what domains are being utilized by the top mortgage websites.

The results are quite telling:
http://www.joedavison.com
(scroll down about half-way to see the screen shot that illustrates the point I am trying to make.)

The vast majority of Chinese individuals, even the most well-educated ones, do not speak English to any meaningful degree and have absolutely no mastery of the Latin character set.

There seems to be a widespread, and unfortunately false, belief in the West that most Chinese people have a mastery of English, simply because it is taught in school. This is simply not true.

Again, these are issues that the average domain investor in the West has no way of knowing first-hand.

There is a recurrent theme among the current crop of individuals who are investing heavily in Asian language domain names: many of us have spent quite a deal of time actually living in Asia and seeing the present-day reality of the Internet in these countries right in front of our faces.

I find the National Geographic chart you posted very interesting, and it's not something I had considered before. However, even that chart still shows 2,000 languages remaining in the year 2100.

Surely a major one, such as Chinese, with a 5000 year history, will be among that group.

So, unless you're looking at a timeframe that extends longer than the next 100 years, I believe it's an error to quickly judge IDN domain names as being very limited.

Great blog by the way! Thanks for writing it; I'm really looking forward to what else you have in store.

Joe Davison

[AhmedF]

Wait - Indian use ASCII? I thought they had sanksrit for written.

[Drewbert]

>and in an ironic twist the Internet is accelerating that dynamic in
>ways this chart (which is 7 years old) does not accurately >illustrate.

To add further to the irony, perhaps the reason for this was because they could only use latin domain names?

Now those people can freely express themselves domain wise in their native languages, maybe the trend will reverse? :^)

[Frank]

Three IDN replies in one:

1. Joe Davidson:

You wrote: "While it's true that companies utilize Latin characters to some degree in the domestic Chinese marketplace, this is mostly done to put forth an "international" image"

That is exactly my point. Regional domains have historically proven themselves prone to failure (.bc.ca or .on.ca [in Canada] jump to mind). They were provincial cc tld's which ultimately went away when the full tld [.ca] came available. IDN's are different in nature than regional CCtld's but the logic behind the curtain is the same. You just can't be 50% 'wildly successful' without owning the other 50% in ASCII characters; lest another party who owns the generic ASCII version of your IDN capitalizes on your efforts globally. IDNs without the ASCII cause confusion and only drive 'up' the value of generic ASCII character names. The most successful IDN's will be for web-enterprises that own the IDN 'and' ASCII versions of their site IMO.

2. Ahmed F:

I didn't see a smiley face but am sure you have tongue planted firmly in cheek. For the benefit of those without ability to visit India (and for sake of avoidance of confusion).. English and Latin characters are the benchmark the majority who are gainfully employed (for Western influenced pay packets) use to communicate in India. Yes, the masses speak Hindi dialects but the benchmark for commerce is English. And if you are going to do business with the rest of the world .. "English is it, baby".

3. Drewbert:
(For the benefit of those who do not already know Drew. He is the smartest Internet wizard in Cancun (perhaps all of the Yucatan).

Drew, that is a very elegant reversal of thinking (and I would expect nothing less from you), however it is hard to steer a ship with 10,000 years of momentum and even if I could, I do not think it's practical for even the smartest Middle-American (Canadian, Kiwi, Australian, South-American, European) folks to begin typing Chinese or Cyrillic characters using their QWERTY keyboard.

"The Trend is Your Friend".. and globally speaking, the trend is to Latin characters.

(Quick sidebar: Not trying to rain on the IDN parade, Just trying to be realistic about them).

[Nico Zeifang]

Hi Frank,

I just want to add some more background to the IDN discussion from a German point of view. As you guys might know the German language includes Umlauts such as Ü, Ö, Ä which are widely used but were not available to be used in Domain Names until the introduction of IDN domains. We therefore had to replace Ü with ue, Ö with oe and Ä with ae in the past when typing domain names. While the majority of German internet users has gotten used to do so, I believe that people will be used to typing the natural spelling (including the umlauts) in the next couple of years (especially since the Umlauts are placed on our keyboards). I strongly believe in German IDN Domains and have bought some names such as Ernährung.de (nutrition in German) and Bücher.com (Books in German). These domains have seen a rapid increase in Type In traffic since the introduction of the new IE and I believe they will experience exponential growth in the next couple of years.

Hope this post sheds some light on the usage of IDNs in Germany.

Have a great weekend!
Nico

[AhmedF]

Aye Aye - honestly don't know about IDNs, but form my own end (eg we owned a popular indian blog directory) sanskrit does seem to be on the rise. For a second I thought you meant they spell it out phonetically (eg as they do with filipino heh)

Perhaps it is a shift away. I know that many Indians are quite fiercely popular, and perhaps once sanskrit holds it will grow :)

From my own experience with web dev in such countries, while the content becomes non-ASCII, that does not really lead to non-ASCII domains.

[Frank]

IDN traffic is clearly on the rise. Sanscrit, Umlauts, Chinese, Arabic.. as they roll out, people will use them. And they will go from zero to something bigger. The losers will be browser error traffic (which will effectively get dammed up the river as the url's resolve), ISP traffic-takeovers, etc.

Latin characters have proven themselves as global. Indians won't type umlauts and Germans won't type Farsi.. Even if they did (and they won't).. what would happen when folks got to this foreign site? Would the IDNs miraculously make them multilingual and help them understand the language on that site?

If you're German, backpacking in Spain.. you don't speak Spanish and they don't speak German; broken English becomes the basic method of communication. I see the Internet that way .. but even more so.

[Hairy Ape]

>>"IDN's are different in nature than regional CCtld's but the logic behind the curtain is the same. You just can't be 50% 'wildly successful' without owning the other 50% in ASCII characters; lest another party who owns the generic ASCII version of your IDN capitalizes on your efforts globally. IDNs without the ASCII cause confusion and only drive 'up' the value of generic ASCII character names."<<

Frank, these arguments can certainly go both ways, ie. IDN capitalizing on ASCII versions, clueless ASCII versions driving up the value of generic IDN's.

It looks like your understanding of these things come from a perspective of lifelong life and business experience which is rooted in the Canadian/American English-speaking tradition. It seem that you take into account Canadian provincialism, their English-language centrism and ever-lasting psychological complex in relation to the US and Britain, and apply it into your broader understanding of all things international. While the wold is getting smaller thanks to jet airplane travel, Internet and overnight courier delivery, it is also getting more fragmented (for all the talk of European union, Basque and Cataluna would leave Spain in a heartbeat, so will some parts of northern Italy from their south, so will, for that matter, even Quebec from the rest of the Canada, and so will one day, California from USA). So what you fail to understand, I believe, is the level and depth of local/regional population practical need and desire for all things local, and even fervent, rabid nationalism that the population of most of these international countries exhibit. That is even the case in some Western European countries, so you can imagine how it is in China, Japan, Russia, Brazil etc.

Native populations that don't speak/read non-native languages will logically and naturally flock to domains/sites that "speak" their language. Those who control access to such domains will naturally control the flow and stickiness and repeateage of that traffic even to the larger degree than their ASCII conterparts (read my previous paragraph as to why).

If and when the local populus desire to mingle (in broken English) with non-native population they will surf away to other non-idn domains/sites. Simple as that.

I don't know do we really have a need for a great philosophical debate when the things are crystal clear.

And even if we cave in to your argument that you can't be 50% "wildly succesful" with just one version (why not?) that should still be great. 50% of "wildly successful"is still successful no matter how you look at it.

[Frank]

That's a good point. "What a man doesn't understand he fears, and what he fears he hates". I forget who said that and I'm paraphrasing the actual quote but maybe I don't know enough about it the potential mechnics and upside. I do know I am having trouble monetizing Chinese traffic to my ascii names.. not sure how I'd monetize more of them. Also unclear about the potential legal challenges of being sued (and served) in Arabic or unique laws around ownership of certain words and phrases. The argument could be made that generic names are not defensible in certain languages.. Government's suing a'la .eu to unseat speculative IDN registrations so they can re-distribute those IDN's to those in their language.

[Franky Tong]

Being a Chinese in Hong Kong my bet is that Chinese IDNs are never going to take off here and I highly doubt it will in China either. The fact that there are 2 encoding systems for Traditional (used in HK and Taiwan) and Simplified (used in China) Chinese complicates things further and presents another major obstacle.

[AhmedF]

The examples of states leaving countries are not necessarily ones of good judgment but foolish pride. For the example of Quebec, for all their talk, separating would hit them very hard financially. Quebec is given billions of dollars every years from other provinces - the only reason it gets them is with their constant threats of separation.

Sorry to take this offtopic - just thought that while I agree there is both an interesting form of both generalization (eg usage of english) and fragmentation (extreme niches - people with highly specific interests that can only coalesce on the internet), the general trend is towards uniformity. As an example, on can argue that Google=Yahoo=MSN when it comes to search (roughly). Yet Google continues to grow its search base, and Yahoo/MSN continue to lose (even with constant ads). People are simply heading to wherever anyone else.

Before I ramble even further - can we get rid of that image check for regular posters Frank?

[Frank]

Captcha removed :)

[Joe Davison]

You may be interested in this video:

http://youtube.com/watch?v=EvuFRsMN_dU

It discusses the spike in registrations of Chinese IDN domain names by mainland Chinese users.

[David Wrixon (aka Rubber Duck)]

Having read the above I would say that some here are hell bent on missing the point.

Marketing is about segmentation and targeting. Failure to recognise this will result in failure to thrive and competition will ultimately ensure your commercial exstintion.

Those that think they can address the entire globe that is hugely divided by language and culture are entirely missing the point.

The biggest lie here is that India yes India is English speaking. It is not. Such assertions are based on virtually zero research. English as a first language will amount to about 3%.

Yes, there has been a trend towards English and Latin over the past century or so, but this is a mere wave on an ocean. Until a little over a hundred years ago China was the largest economy in the World, and certainly in the first part of this century it will be again. The speed at which that happens will be due to some extent on the effectiveness the US can respond to the challenge. If this is representative of the thinking within corporate America, my guess that the US will be overhauled in as little as 10-15 years.

Following trends is all very well, but you have to recognise the cusps as well. Trend followers are always burnt in market crashes or where markets take new directions.

For about 40 years nearly all computing was done in English/Latin characters. The technology has now moved on, mainly because of the market pressure for it to do so. It may well be that that at encodement level Latin is always extremely important, but at User level it will become increasingly irrelevant. It may well be that technology will make it progressively less necessary for people to learn English as a second language. In which case, the ability to segment and target markets will become increasingly important.

To segment global markets a mixed approach will be necessary. Of course ccTLD will continue to play a role especially where character sets alone cannot determine the relevant linguistic and cultural context. Elsewhere and particularly for Asia, Russia and the Arab World, IDN will be the main means of effectively targeting markets. The market represent more than half of the World's populations and their economic importance will trend towards half of the total as well.

The hard truth is American dominance is coming to an end. Accepting the new reality will prove a much better option than attempting to live in denial.

[Dominik Mueller]

>>>The hard truth is American dominance is coming to an end. Accepting the new reality will prove a much better option than attempting to live in denial.<<<

David, we all know you are pro IDNs and that is all fine with me. But your point of view is quite one-sided, too.

Being from Germany I know that there is value in IDNs. Both traffic and sales prices are going up. This is nothing compared to English dot com domains though and I do not expect this to change anytime soon, because it is a fact that English is the number one language for doing business globally. While it might be true that there are more people speaking Chinese or whatever on the planet, English is the preferred language whenever it comes to buying from and selling to international markets.

You cannot compare the amount of people speaking Chinese and English when talking about global businesses. English might not be as widely spoken as Chinese, but it is the most important foreign language and business language in the world. I have some clients from India, Russia and China... They do speak English.

Therefore, IDNs will definitely play a very important role for national markets, but I am sure that from a global point of view they will not replace good old English dot com domain names.

[Frank]

These are really smart posts and I don't think things are going to end badly for IDN domainers, but I think there is more upside and security in non-IDNs. T. Boone Pickens who said (and I'm paraphrasing) "If I can't make money in America, I can't make money anywhere", sort of had it right. Dave is correct in calling out US hegemonic decay .. but the culture of US centric business is staying with us. Still, there are IDNs in those languages too so I think IDNs will ultimately make great traffic pointers. Just poor 'anchor names'. To that end I view them more as very regional backups to Latin names for conducting biz globally.. Or as gentrified typos (correct spellings pointer names that play same role as a Typo, but more gentrified because they are not in fact typos.

[Nico Zeifang]

Some very good points Dominik when speaking about the global point of view. I also agree with Frank's remarks regarding "broken english" being the number one method of communication when two nationalities meet. My remarks came from a local point of view. In Germany .de is number one and .com is the number two choice of people. My remarks where therefore not addressing the global market (meaning that idn domains would compete with generic .com names) nor did I intend to say that the "uprising" of local IDN names will lower the value of generic .com names. I was rather talking about a completely different market. Seeing the prices one has to pay for a generic English .com or a generic German .de, I think buying into local IDN names is still a smart investment and gives everybody the chance to be one of the "early movers" and profit big time in the long run. Off course I am writing this from an German IDN .de point of view as I do not speak chinese, etc. nor do I know about the keyboard situation over there.

Great to see some discussion going on here, makes for a very interesting read!

[David Wrixon (aka Rubber Duck)]

I am not sure that references to Global Business and "Anchor" names are terribly useful. Global business is a simply a summation of lot different markets and different market segments. Each of these will require different content often in different languages and scripts with navigation address which are appropriate. There are over 4 Billion Web Pages in China and only 0.1% is encoded in English.

It is essential to understand where the clicks and the revenue are going to be coming from. Whilst English may be the language the large companies talk to one another in often between two countries where English is not widely spoken, this doesn't represent the kind of commerce we are essentially interested in. We are interest in millions of tiny transactions that are carried out by local businesses and consumers and these will predominantly be done in the mother tongue of those surfing where possible. And it is become increasingly possible for them to do just that.

ASCII address have no merit in driving search traffic from queries in completely different scripts. IDN domains get you good SERP often even from parking pages. It is the massive SEO advantages of the IDN domains in local search engines that will seal the fate of ASCII domains in places like Japan and China. The fact that people will find them easier to type is almost incidental, as currently there is no type in culture. How often would you type in if you were require to do it Russian Cyrillics or Arabic script even assuming you had appropriate equipment to do it?

There will of course be those who quite justifiably just want to address the US market which for the time being is going to continue to be one of the World's most lucrative. The point is though to have domains worthy of tackling these markets you have for several years needed to shell out domains that cost 6 or 7 figures, whilst those that will be necessary to attack other key markets can still be scoped up for 4 or 5 figures. Whilst the value of the domains may never exceed those of English dot com counterparts in my lifetime, the ROI will be far far highter, especially in my case, as I rarely paid more than reg fee and have enough to meet my long-term needs.

There is absolutely nothing wrong with investing in quality ASCII domains where they are appropriate even at todays prices. Where I have my doubts is whether the millions of low grade names that have been bought by ten of thousands would be professional domainers in the hope of emulating those who have already made it big. Frankly there just are 60 Million quality keywords in the English Language, I personally think that it hard to find much more than a million names that could be described as premium even in the very limited sense of being worth more than registration fee.

[Adam Strong]

"I personally think that it hard to find much more than a million names that could be described as premium even in the very limited sense of being worth more than registration fee"

I'd love a comment on this from Frank. Mine is : LOL
worth more than reg fee ? tons of typos are worth more than reg fee. .. . .probably a million of those alone

[Frank]

To David's comments I would say: The SERP/SEO argument falls flat.. Ten years ago SEO guys said "Why buy ASCII names when you can SEO?" Well they are enslaved by their SEO today while generation 1 ASCII domainers have made out quite well. The engines are kind to IDN now.. but the algo's will change, and then you're knackered. I completely agree with Adam, the reg price statement sounds totally out of whack .. the numbers of valuable ASCII are just so much greater.. I would personally buy 13 million names if I could get them (all the names in my dictionary of traffic terms [those are tm free]) I don't even know where to begin faulting that statement. Suffice it to say, I live this and its just flatly wrong (from a making money in paid search perspective).

[AhmedF]

Huh SEO value just because its an IDN domain instead of an ASCII domain?

That makes no sense ...

[Frank]

David Wrixon pointed out that in certain circumstances Search algorithm's favor IDNs .. that may be so for certain names with content (just like search algos favor older names and names that have been renewed in advance[ google didn't just get a registrar cause they thought it would be cool]) .. but as SEO guys pile on to the loophole and take advatage by buying old names renewing in advance or adopting IDNs, the SE's will change the algo to close the hole. I was just pointing out that SEO has always been a game of cat and mouse. You can't hang your hat on buying IDNs becasue today in 2007 google weights their algo in IDN favor. The .com used to resolve in the browser if you typed a search without extension.. look what happened with that. Hope that adds some color.

[David Wrixon (aka Rubber Duck)]

I think I need to clarify what I mean by SEO advantage. In one sense no there is no difference between the way the Search Engines treat IDN and the way they treat ASCII, indeed for Latin IDN, those with just a few accents, the Algorithyms do not currently distinquish. The problem is that in the places where I have invested, virtually nobody searches by inputting terms in Latin Characters. No Search Engine now or in the foreseeable future is going to match an ASCII name against a Chinese character search. Of course if you have Computer.cn or even Computer.com and someone types on the Keyword "Computer" in Latin characters you will get your appropriate SERP for your ASCII domain. The problem is that virtually nobody is going to type your keyword into the search box from the markets we are targeting.

I guess at the level of a Million domains in each language I might be a bit harsh, but we have really only invested in genuine Generics and Geographics and Single Characters to date, except perhaps in Arabic where arguably Typos are often the norm. I have never been a fan of the Typo concept and typos of TM domains are extremely vulnerable at UDRP. I guess Typos of Generics are fine, but it seems to me that real thing is generally much better.

Perhaps in the case of Dot Com the useful limit on commercial domains is a bit higher than the 1 Million I suggested, but at the end of the day unless there is something special about a domain it is worth no more than your average telephone number. I get traffic on my telephone from unsolicited calls and people dialling the wrong number. I would not suggest, however, that that traffic is valuable or that I could sell the number for a profit.

Anyway, for those of you that are genuinely interested in IDN, I can only suggest you stop by at either DNLOCAL.com or IDNForums.com to get a flavour of what is going down. No this kind of investment is not for everyone, although I have dispelled the myth that you need to be a linguist, but it is a massive opportunity and should not be passed over lightly.

[touchring]

Interesting ideas. IDNs to me, is a niche market. An area big boys miss out. There's some money in it, and for me, that's enough.

I'm not looking for an ASCII killer.

[David Wrixon (aka Rubber Duck)]

You are correct. By and large ASCII and IDN address different markets. There are going to be areas where those who have invested in ASCII will miss out to IDNs, but only where they never had any real chance of success anyway.

You might think of it like putting on different kinds of music from Country to Opera, including Heavy Metal, Hip-Hop and Rock and Roll. You will never attract all music fans to one kind of show, so don't even bother trying.

Describing China as Niche Market might seem a bit bizarre to future historians!