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.hiv’s innovative, dangerous business model

Kevin Murphy, August 25, 2014, Domain Registries

.hiv, the first charity gTLD, is set to go to general availability at 2pm UTC tomorrow with one of the strangest and riskiest business models of any new gTLD to date.

While registrants will be able to use .hiv domains more or less as they please, as with any other gTLD, Berlin-based registry dotHIV is banking on an innovative microdonation system to set the space apart.

When you buy a .hiv domain, you’ll be sent an invitation by the registrar or registry to join an optional Click-Counter service, according to dotHIV chief marketing officer Michael Twist.

If you join the service, every time somebody visits your .hiv web site, dotHIV will donate a tenth of a US cent to one of four (initially) HIV/AIDS-related charity projects.

The donation will come from a pool of cash set aside by the registry from its registration fees.

While .hiv names are going to be sold, by 80 to 100 registrars at launch, for close to $200 per year, $120 of each registration or renewal fee will go into this charitable pool.

This business model is unprecedented in the domain name space, and it’s leading to the registry behaving in ways you wouldn’t expect from a new gTLD business.

For starters, dotHIV isn’t overly concerned about promoting its end users in a big way right out of the gates. It needs to refill its diminished cash pool to be able to cover the microdonations.

At first, it’s more concerned about volume and premium domain sales.

This problem is more pressing because of the longer-than-expected process of getting the .hiv application through the ICANN evaluation and delegation process.

“The microdonation system only works if we’ve got money in the pot,” said Twist. “The delay in the ICANN process has eaten up some of the funds.”

With a $120 donation from each sale, any given .hiv domain would only need to generate 1.2 million clicks in any given year to render it ‘unprofitable’ — ie, taking more from the pot than it put in.

dotHIV therefore needs time to ensure the pot of money from registrations is big enough to cover any big traffic spikes — what if a .hiv link goes viral, or a big-brand company starts using one? — before promoting the end-user sites in any meaningful way.

“First we need to push for registrations, and then traffic,” said Twist. “We can’t get too many people clicking before we hit a critical mass to support what we’re trying to do.”

There’s also the other possibility: that dotHIV, which is a registered charity, may wind up sitting on a pile of cash from registrations that is not going to its designated causes due to a lack of clicks on its users’ sites.

There’s risk in both directions, which begs the question: why not just donate the $120 to charity at the point of registration?

“More than just trying to raise funds what we’re doing is trying to raise awareness,” said Twist.

By encouraging (eventually) viral, click-based fund-raising, the registry hopes to put a spotlight back on the virus, which perhaps isn’t as trendy a cause as it once was due to the development of drugs that can delay the onset of AIDS by decades.

dotHIV is launching with some premium sales and some big-name anchor tenants under its belt.

Twist said that a “handful” of $10,000 names, which he declined to identify, have already been sold to pharmaceuticals companies involved in the development of HIV drugs.

There are about 10,000 reserved premiums in the space, he said, with a starting price of $5,000. Premium buyers will have to commit to usage rules including a commitment to use the Click-Tracker.

Keep a Child Alive, the charity founded by musician Alicia Keys, is among those committed to be early adopters and the Federation of Gay Games will use sport.hiv.

From the domain world, corporate registrars Mark Monitor and IP Mirror are to use .hiv domains.

There are no rules preventing domainers registering in .hiv (perhaps even treating it as a donation rather than an investment) but Twist said the registry would be disappointed to see large numbers of parked sites.