.Mobi – A Tower of Cards Waiting to Fall

One of the main stories circling that domainersphere right now is Rick’s explanation of the real story behind the flowers.mobi purchase. In his blog post, Rick gives some excellent pointers about investing in domains and then shows how his purchase of flowers.mobi, and investments in (quality) .mobi domains in general, meet these criteria. But is investing in .mobi wise? Or is it simply a tower of cards waiting to fall?

What is .Mobi?

.Mobi is a newer extension that was launched on September 26, 2006 by dotMobi. The purpose behind the .mobi extension is to provide an extension for the mobile web. It has been branded as the TLD that will work on your cellphone, and brings the world “Mobile content for the mobile context”.

Websites (and even parking pages) on .mobi domains are required to meet certain requirements to be mobile accessible, and in fact, the registry can even cancel a registration if this is not done. To further the development of the .mobi space, the registry has launched a wide variety of tools to aid in the development of a mobile website.

.Mobi has seen one of the largest marketing pushes of all new TLDs. It obtained the backing of a good number of large corporations , including Google, Microsoft, Vodafone, Nokia, Samsung, T-Mobile, Visa, Ericsson, Sony, and Telecom Italia, who were expected to help promote the extension in consumers minds. As well, a dotMobi Advisory Group (MAG) was formed to ensure “that the dotMobi Top Level Domain (.mobi) is operated in the best interests of the global dotMobi community and the Internet at large.” The MAG includes many other large companies, such as Godaddy, Carlson Marketing, Millenial Media, Sony, Firstserver, ooober, Instant Access Technologies, Bango, Telecom Italia, and Nubiq. Additionally, unlike most of the domain registries, the .mobi registry marketed heavily directly to domainers, including the sponsoring of domainer conferences.

You can find out more about dotMobi in this interview by Jon Briggs of Neil Edwards, CEO of dotMobi:

What Proponents of .Mobi Say:

1. Follow the Money. This argument is best summarized by Rick:

In anything. ALWAYS….follow the money. I did the same with .mobi. What caught MY attention were the companies backing it. Why would they do that?

Well, maybe they would do that because they were interested in the mobile internet, and wanted to have all of their bases covered. Since the launch of .mobi, the backers actually haven’t done much to encourage consumers to think .mobi

2. Mobile Devices Are Becoming Popular. True dat. There are apparently 1.6 billion internet-ready mobile phone around the world. But so what? As I’ll discuss below in more detail, the mobile internet doesn’t require .mobi to function.

3. Big Aftermarket Sales. There have been some extremely good aftermarket sales of .mobi domains. The Flowers.mobi sale is the best known one for $200,000. Sportsbook.mobi sold for $129,800. You could sense the excitement in the room when Fun.mobi sold at auction for $100,000:

The argument basically goes: big aftermarket sales are proof that people see a bright future in .mobi. I have to admit that the amount of money people are paying for .mobi’s is incredible, especially given what seems to me to be the uncertain outlook for the extension. The problem here is that the sales are primarily to other domain speculators – and not to end users. That’s why I believe that the whole extension is just a tower of cards waiting to fall down.

4. You’ve Come A Long Way Baby. Just over a year old, and already ringing up six figure sales. By May 2007, already 500,000 .mobi domains registered. Several major corporations, such as Weather.mobi and Time.mobi have bought and set up .mobi domains. Not bad, eh? Especially since no one is making the argument that .mobi is an alternative to .com.

Well, not so good either. The fact is a lot of these transactions are domainer to domainer and not end user – again a house of cards. And while some corporations are using these domains, it is really a small number in the scheme of things. Further, the names the corporations are choosing are trademarked terms – not ones that will benefit domainers holding .mobi’s.

Why .Mobi Sucks

1. Follow the Money. Like what Rick says, one of the best things to do when investing in domains is to follow the money. But what is the smart money in domaining saying about .mobi?

(a) Frank Schilling is perhaps the best known and one of the most successful domainers there is. What does he say about the .mobi?

I own no .mobi names. If it were possible to own a negative number of domain names to further distance yourself from the name space, I would probably own “negative thousands”

(b) Sahar Sarid is another very successful domainer. Here’s what he has to say about .mobi:

.Mobi sucks. That is plan and simple. Rick can tell you all day long about the black or brown shoes and that you should sell both if there’s money in both, but while there may be money in both, it is your DUTY to question what is going on. Frank rightfully stated few days ago he questions the validity of .Mobi sales. Yesterday Jay at DomainTools Blog also raises some important questions ,and word is Greg M. of Webmagic, one of the three heavyweights in the first .Mobi auction, is dumping and taking losses (see comment area here). How promising is that?

Here’s another question to ask yourself: What is the story of .mobi? How did it start? Why did it start? It really goes back to a “crowd mentality” issue and other interests you likely do not know about, will never know. There’s this saying “Assumptions is the mother of all f#$^#@s”. If you cannot understand the investment, my advice is to stay out of it. In professional boxing, unless you’re Leland Hardy, it is better to watch from the sidelines then be in the ring. The boxer may win big, but he also may get injured badly. In investments I do believe in taking calculated risks but I don’t believe in “risky investments”.

(c) Dominik Mueller is a domain broker for exclusive domains. Here’s what he has to say about .mobi:

Although mobile web surfing is on the increase, I don’t really like .mobi. This is mainly because one doesn’t need an additional extension for surfing on the web using a mobile device. Current smartphones can open “normal” websites already, and the iPhone even has a .com button.

Personally, I don’t own any .mobi domains, but it is still too early to say where this TLD will go in the end. There have been some good .mobi domain sales in the past year and one-word domains under .mobi will presumably find buyers at relatively high prices in the upcoming auctions again. It’s just that I don’t think they’re worth that much, but as said, it’s too early to give a definite answer.

(d) Owen Frager is a thought leader in the industry. What does he have to say about .mobi?

CNN announces 90 million susbcribers to CNN Mobile ….NO MOBI extension REQUIRED (or even acknowledged). ….
And now here comes Ask Mobile GPS� AGAIN IAC is oblivious to dotMOB’s very existance and they have the 270 MILLION eyeballs!
As you can see from the full page “m” (before the) DOT brand ad in USA Today, the mobile branding being engrained in the public eye is just not the one everyone hoped for. Don’t shoot the messenger. If you have an investment you should be on the MOBI people who took your money to promote and advertise the cause. Hate them, not me.

(e) Elliott Silver of Top Notch Domains, LLC is a leading voice in the domainersphere. What does he have to say about .mobi?

Do Frank and Sahar know and understand domains as well as Google, etc? I’m betting that they do, because they live and breathe this stuff all day every day, whereas for the large corporations, this is simply ancillary to their main operations.

Well said, Elliott. It’s good to follow the money, but better still to follow the knowledgeable money.

2. The iPhone Challenge. The basic need for a mobile web boils down to the technological limitations of mobile devices: most importantly, their displays are not big enough to browse standard web sites properly. But what if there were a mobile device that displays web sites as they were meant to be seen? Oh shoot, it has already happened: the Apple iPhone.

Will the iPhone obviate the need for the mobile web? Well, time will tell, but I’m guessing that people are going to be unhappy with limited content on the mobile internet and simply switch to mobile devices that allow them normal internet access. The purpose behind .mobi may be it’s ultimate demise: there may be no need for a mobile web.

3. M.Domain.com Rules. As Owen Frager pointed out about CNN, many companies are opting to go the route of branding mobile version of their .com – by using m.domain.com – rather than branding a .mobi.

4. .Mobi Is Unnecessary. It’s a relatively trivial task for a website to determine whether a visitor is using a mobile connection – in which case, a mobile version of your website can be displayed. As Andrew Johnson says:

Web sites can automatically detect what platform a visitor is accessing the site through. Go to facebook.com on your phone, you end up at m.facebook.com. Its hassle-free to the end user.

A website and browser should work together to present web content optimized for whatever device is being used. As Opera CEO Jon S. von Tetzchner states:

“There should be one Internet,” he says. “What if you’re using another device? Should we have .gameconsole? .car? .fridge? .plane? We don’t need .mobi at all.” Besides, he says, “There are capabilities for sites to query the browser to figure out exactly what you’re using. That’s a much more elegant solution than having the user choose which site to go to.”

.fridge eh? I like that one. I think I need to figure out how to get a trademark on food.fridge so I can beat the landrush.

5. Businesses Are Risk Averse. Let’s face it, what incentive does a business have to gamble on a .mobi when a .com is a pretty sure thing. Smaller businesses need to work hard to establish credibility – why would they make life more difficult than necessary for themselves by going with .mobi. Larger businesses tend to be inherently conservative and resistant to change. Sure, there may be marketplace pressure to bring about these changes one day, but it’s not there yet.

6. No End User Sales. So far, most if not all of the large .mobi sales have been domainer to domainer. End users simply aren’t going into the market yet and buying .mobi’s in large numbers. The extension is really a house of cards – one domainer selling to another domainer selling to another domainer – with no chance of finally cashing out to an end user who wants to use the domain.

Conclusion

I have to say that from everything I’ve seen, .mobi is the best marketed domain extension out there. I think that other domain registries should take a few pages out of the dotMobi playbook. Unfortunately, that’s simply not enough to save this domain extension, whose whole purpose of being is inherently flawed and which shows no consumer or end user adoption.

Of course, no one can say for sure what the future of .mobi is. One thing seems to be certain though: .mobi is a highly speculative investment. Certainly the extension should not play a major part in any domainer’s portfolio, particularly when there are much more solid alternatives available (for instance, good .com’s). However, if you have the urge to buy lottery tickets or go to Vegas, putting that money in .mobi’s will likely yield a higher ROI.

Further references

Dotmobiz
Pinkard Brand
How to Get Started As A Domainer
dotMobi Blog
Interview with Pinkard Brand
Inside Domaining
Willswideweb
Mobility.mobi Forum
Domainstate .Mobi Forum
DNForum .Mobi Forum
NamePros .Mobi Forum
Pointless .Mobi Landrush Launched
Why .Mobi Makes Sense
.Mobi Madness .Mobi Sickness
Should You .Mobi Your Blog

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