.com and .net domains get downgraded from AAA to AA
In the news, we hear about countries and states having their credit score downgraded. DomainIndex, a site that rates investments by top-level domains, announced that it has decided to downgrade the value of .com and .net TLDs. What used to be the most sought after domain endings are now becoming less valuable thanks to government intervention. With the US government seizing DNS records for sites that may post pirated material or just link to it, the stability and reliability needed to build a business doesn’t seem to exist for .com or .net domains. Many companies are choosing to go with .me, .info, or TLDs of other nations.
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The full press release follows:
Domainindex.com Downgrades Internet TLD: .COM, .NET from AAA to AA
Domainindex.com, the domain industry’s leading benchmarking, DNS analysis, rating and appraisal service, has announced today that it has changed its rating for the .com and the .net TLD from AAA to AA
SEATTLE– Domainindex.com, the domain industry’s leading internet domain name benchmarking, rating and appraisal service, has announced today that it has changed its rating for the .com and the .net TLD from AAA to AA. The step has been taken after the release of an official statement by U.S. authorities of its intent to continue seizing .com, .net, .cc, .tv and .name domains and forcibly redirecting .org (and probably .us) domains. Officially, over 750 domains have been seized in the last few months by the U.S. government, most of them from overseas registrars. The U.S. government claims that illegal activities take place on these domains. However, many of the domains seem to have been seized simply for linking to gambling sites or sites streaming sporting events on the web.
Domainindex.com considers these seizures a threat to any .com domain and the internet DNS in general, given the fact that seized domains can be resold for the benefit of the U.S. government even more. This increases the threat to any valuable domains within these TLDs. Therefore, we’ve had to rerate the TLD today and to lower its rating by two steps, from AAA to AA. While the technical infrastructure, business and economic environment still deserve the AAA level, the legal situation no longer supports this rating.
About 50 large portfolio owners consult Domainindex.com ratings for domain names portfolio risk management and investor reporting. Because .com is still the “king” of TLDs, we do not expect any changes in customer asset allocations. Nonetheless, the step has been taken to make clear that other ccTLDs are not affected and will keep their AAA levels. Note that no generic TLD currently has an AAA rating anymore.
We will watch closely how, in the future, the U.S. and other governments handle this issue. Hopefully, we will be able to upgrade .com again. However, we are pessimistic, as a change in this policy will require a substantial change in US politics and in the governance of TLDs.
Domainindex.com is a domain appraisal and benchmarking service. It provides automated and manual appraisal of individual domain names and portfolios. Domainindex also provides indices to the domain industry, tracking the value of each TLD and benchmarking the holdings of large portfolio owners with respect to the markets. Additionally, Domainindex provides ratings for 60 TLDs, rating them by economic, legal and technical criteria. Domain ratings are used by large portfolio owners to judge their risk profiles and exposures in the various TLDs.