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10 Ways the Internet (As We Know It) Will Die
We often think of the Internet as a platform for unfettered global communication, where information flows freely, innovators can launch new applications at will, and everyone can have a voice. But it’s unlikely that our children’s Internet will look anything like what we have now.
How might the Internet as we know it die? Here are 10 possibilities.
- Someone subverts the Domain Name Service. The Internet relies on DNS. But if someone broke — or worse, subverted — the fundamental way in which we find web sites, we wouldn’t trust URLs any more. Phishing would be easy. Own the DNS and you own the Internet.
- Zombie networks attack! Untold numbers of enslaved PCs are waiting to do the bidding of shadowy hackers. Matt Sergeant of MessageLabs puts the size of the Storm botnet at between five and 10 million machines (though others peg the size of the network at much less.) Today, bots fill our inboxes with spam. But in the past, they’ve been used to take out companies and countries and to blackmail sites. In the end, it’s an arms race in which only one side has to play by the rules.
- Massive physical infrastructure failure. If an accident involving a couple of cables in the Mediterranean can make the Internet unusable for hundreds of millions, imagine what an intentional attack could do.
- Death by a thousand fragments: Ever since Usenet, people have been grouping together with those who think like them. In his book “The Big Switch,” Nicholas Carr cites one study that claimed more than 90 percent of the links originating within either the conservative or liberal community stay within that community. Some link referral tools can even be configured to keep visitors on sites with the same world view. The end result? Islands of like-minded people, increasingly sure there is only one right answer and that they’re in sole possession of it. And an end to the dreams of a global community envisioned by the Internet’s creators.
- A really good virus breaks the routers. The Internet’s self-healing mechanisms rely on the Border Gateway Protocol, or BGP. But what if someone gets inside the routers? In a 2006 NANOG presentation, Cisco looked at claims of vulnerability and concluded that “the most damaging attacks are caused by the deliberate misconfiguration of a trusted router.” Corrupt BGP, and you not only stop the Internet from forwarding traffic, you interfere with our ability to get to the routers and fix them.
- Updates break how updates work. Most software these days is designed to patch itself and remain current. But sometimes the process of automated upgrades triggers its own problems. On Aug. 16, 2007, Skype went down in what the company claimed was a side effect of a massive automatic update to Windows. It’s only a matter of time before an update makes a fundamental piece of software, like a networking stack, unable to update itself, cutting off millions and requiring manual intervention.
- The Net stops being neutral. If the carriers start to charge us for access to sites the way cable companies charge for premium television, pretty soon you’ll have a “Google fee” on your monthly bill. This already happens with many mobile phones that feature the services of Facebook and YouTube. It’s perhaps the most insidious death, because it would signal the end of innovation — no one would be able to launch the next Skype, Twitter or YouTube without the tacit approval of carriers.
- The lawyers get involved. The Internet has been an experiment in free speech. That may be coming to an end. Unable to go after the sites themselves, lawyers go after the hosters and registrars. That’s how Swiss banking group Julius Baer took whistleblower Wikileaks off the air. And once there’s precedent, others are sure to follow. The recording industry is already wondering if it can go after carriers for enabling copyright infringement. This is the irony of Net Neutrality: When telcos start treating different bytes differently, they aren’t “common carriers” and may be liable for what they transmit, including illegal content. So they’ll comply.
- Walled gardens: Many countries already restrict how the Internet is used. China’s firewall — which includes 30,000 people tasked with finding improper users — is a good example. But the Internet is a tool for social change and revolution that could threaten any government. Imagine, for example, a U.S. Congress that outlaws online pornography and blocks known adult sites (which accounted for 18.8 percent of all web visits in 2004, according to Hitwise, although the U.S. government says that figure is actually a mere 1 percent.) Instead of a global Internet, we’d have a return to localized standards of decency imposed by legislators. It’d be like “Dirty Dancing” all over again.
- Humans take themselves out: As Discover Magazine pointed out years ago, we’ve got plenty of ways to do ourselves in, from nukes to plagues to sucking ourselves into a black hole of our own making. And what’s an Internet without users?
The Internet has already morphed from its initial aspirations of open academia to a commercial platform controlled by corporations and carriers. In many ways, the time between the start of ARPAnet in 1969 and the end of Netscape this past February is just a brief period in history that the Facebook generation won’t miss.
No More Tasting: It’s a Bad Year To Be a Registrar
The companies that handle domain registrations have built businesses around hosting, domain speculation and wholesale billing. Domain squatters, meanwhile, make millions with the right URL. But despite the huge growth of Internet sites and the brave face they put on, registrars face hard times. Regulatory changes, price increases and free hosting offerings from Google mean the future looks rough.
The Domain Name Service (DNS) protocol is at the core of the Internet. It’s how we find a site, translating a URL like www.gigaom.com into the IP address your computer needs to reach it.
At the top of the DNS food chain is ICANN, the Internet Corporation for Assigned Names and Numbers. Formed in 1998, ICANN regulates domain name registration. Just below ICANN are the top-level domain registrars. VeriSign, for example, is currently the accredited domain-name registrar for .net and .com.
Until 1999, Network Solutions, once a part of VeriSign, had a regulated monopoly on domain registration. Then registration was opened up to new entrants. Today, in addition to Network Solutions, there are 902 companies authorized to register domain names.
The better-known registrars, such as Go Daddy and Network Solutions — as well as white-label registrars like Tucows — derive much of their revenue from domain registration. While few of the registrars provide financial information to the public, Go Daddy filed for an IPO (which it subsequently withdrew) in 2006. At that time, Go Daddy reported revenues of $139.8 million, of which domain registration was 60 percent. But plain domain registrations aren’t a high-margin business (Go Daddy also reported a loss of $13.5 million that year.)
The registrars have to pass on a substantial portion of registration revenue to VeriSign and ICANN. If Go Daddy charges $8 for a domain registration, for example, then $6 goes to VeriSign and 75 cents to ICANN. As a result, these companies have tried to broaden their offerings, seeking revenue streams that have better gross margins than that of simple registration. Two of the major sources of revenue for these companies are premium domains and hosted services. And both are under attack.
An end to tasting
Not all domains are created equal. The more attractive ones are worth serious money, either because they generate traffic that can be monetized through advertising or because they can be sold to the highest bidder. Sex.com sold for over $14 million in January 2006. That year, VeriSign estimated that 10 percent of registered .com and .net domains were registered with the sole purpose of generating pay-per-click advertising.
Several of the 903 accredited registrars spend their time doing nothing but speculating on names. They register huge numbers of promisingly named domains, stick ads on them, then see which ones get enough traffic to be profitable. Those they keep; others, they delete.
It’s a practice known as domain tasting. Registrars are able to do it because ICANN has a grace period during which a registrar can change its mind about a registration and get its money back. Get the right name, and you’ve hit paydirt. Pick the wrong one, and you don’t lose anything.
Tasting is big business. In January 2007, the top 10 domain tasters accounted for 95 percent of all deleted .com and .net domain names — 45,450,897 domain names out of 47,824,131 total deletes, according to ICANN. To try and stop this practice, ICANN is reviewing a proposal this week that would effectively end tasting by charging the ICANN annual fee at the time of registration.
There’s still money to be made from premium domains. Tucows, for example, has a name auction service that sells expired names to the highest bidder. These previously active names have a known traffic history, so when they expire it’s easy to know whether they’ll generate money without tasting. Not to be left out, Go Daddy has a revenue-sharing service called CashParking that encourages people to host their unused domains with the registrar and split the resulting (if any) ad revenue.
Other registrars have similar approaches: Network Solutions offers premium domains that it says are “priced higher than unregistered domain names based on a variety of criteria including the number of characters in the domain, the number of years the domain has been registered, relevancy and popularity of the keyword, and the traffic it generates.”
Google Apps a free alternative
Restrictions on tasting aren’t the only downer for registrars this year.
Large companies usually run their own DNS servers, maintaining control over which machines handle mail, web and other services. But millions of smaller companies rely on turnkey hosting. This is a major source of revenue for registrars, who work hard to upsell web and mail services when customers register their domain. When smaller, non-technical domain owners register, the logic goes, they want a bundle of services without having to worry about what goes where.
Network Solutions focuses on small organizations that want a turnkey Internet presence. “Our focus is really on the small business. They don’t talk about hosting,” said Susan Wade, a company spokesperson. “When you ask them, ‘Do you currently market your business on the web?’ they say, ‘Yeah, we’ve got a web site.’ The majority of our customers are very much non-technical.”
Tucows, on the other hand, focuses on white-label management and services such as e-mail and anti-spam through ISPs that resell them. Tucows manages over 7 million domains, and handles billing for an additional 1.1 million, making it one of the largest wholesalers.
For Go Daddy, its IPO filings reveal that hosting generated $30.6 million in revenues in 2005. Go Daddy targets a slightly different segment of the market, giving its somewhat more technical subscribers greater flexibility to configure their DNS records. This appeals to companies that need to split up their services, getting hosting from one company, mail from another, and using Go Daddy’s DNS to make it all work well together.
That may be the model of the future. Tomorrow’s IT infrastructure will be an archipelago of sites and servers, stitched together by a central DNS. Applications, from online collaboration to project management to sales force automation, will all be run by third-party sites using a Software-as-a-Service model. It’s an end to one-stop shopping for hosters.
Google is betting that even small businesses will unbundle their DNS from their e-mail and hosting using its Google Apps service. While Network Solutions’ traditional customer base may not be technical enough to run their own servers, Google is hard at work making it possible for them to unbundle their services by sprinkling simplicity on the business of hosting.
It’s unclear whether Google will succeed. “Google’s a threat, but they seem to have an ad-centric business model,” observes BMO Capital Markets analyst Thanos Moschopoulos. “It’s unclear how good they’ll be at providing customer support for those that need it, which is one of the value adds of a typical hosting company.”
In a recent phone interview, Mark Salerno, Network Solutions’ VP of R&D, compared his company’s offerings to Google’s. Both companies have page creation tools, web mail, control panels and calendars, he noted. “In a lot of ways their Google Apps is their play into the hosting space,” he said. “The question is, will that only attract technical users?”
Feeling the squeeze
ICANN wants to end domain tasting. Google’s eating away at hosting margins. Since most of the registrars don’t publish revenues in detail, just how much of a threat this represents isn’t clear. Some — like Tucows, wholesaler eNom, and Go Daddy’s Wild West Domains wholesale business — are better positioned to weather the storm by focusing on resellers and local ISPs.
But no matter how you look at it, 2008 will be a tough year to be a registrar.
