saga continues

Answers to Parliamentary queries raise yet more questions

The saga of the US$500,000 paid by the New Zealand government for domain is still rolling on, with official responses to Parliamentary questions producing more queries than they did answers.

New Zealand MP Rodney Hide has been bombarding the government with queries over its strange conduct. First the government took the previous owner - Virtual Countries - to domain arbitrator WIPO to get the domain back. It not only lost but was also found guilty of reverse domain name hijacking.

Then, just days later and without any external consultation, it paid the hearty sum of US$500,000 in tax-payers' money for the domain through government-owned company The New Zealand Way ltd.

Since then, it has become clear that the New Zealand government applied for several trademarks in order to give its case legitimacy but knowing that it would be turned down. It was turned down, but not before a different WIPO decision on saw the domain wrongly handed over to the government.

The answers to more Parliamentary questions make the situation even murkier. It now transpires that the government offered to buy the domain on 22 November 2002 - five days before the arbitrator ruled against it. Its initial offer was $500,000 and Virtual Countries finally accepted it on 9 December.

The Minister for Industry and Regional Development was not informed of the purchase until nearly a month later.

A further set of questions by Rodney Hide confirm that The New Zealand Way board sought no outside counsel on the purchase, only whether it had a legal right to the domain. It didn't.

Meanwhile the government arm that managed to waste NZ$57,770.21 (£18,500) on going to WIPO in an effort to take over the name, TradeNZ, has admitted that it only became aware of the government's own condemnation of attempts to control country-named domains during the case itself. Assuming that isn't a version of the truth, it is enormously incompetent.

Now, read this next answer (answer number 03979) from tourist minister Mark Burton carefully. " is the obvious single point of entry for anyone online who has an interest in New Zealand for the purposes of tourism, trade or investment. This portal is an important global marketing tool for us, and ownership will ensure that it contains up to date, accurate information."

Fair enough, you may say. But using the age-old government answer "I refer the member to written question number xxx", it would appear that this two sentence-response is sufficent to answer numerous supplementary questions.

Such as:

  • Why did it spend so much on the domain (especially when it already had other domains such as

  • Does the government plan to try to take over

  • Does the government plan to try to take over

  • Did the government consider the numerous other country-name domains owned by Virtual Countries?

  • What is the return expected from the domain and how will it be generated?

So, the government has obviously decided to go for the "say nothing" approach. Meanwhile, it admitted that it has so far spent NZ$5,455,153 (£1,940,000) on developing its current tourist site which, presumably, will be superseded by or there would have been no point in buying it.

As for, it has had NZ$8,500 spent on it so far with another NZ$30,000 in the pipeline this year.

So it's fair to say that quite a significant amount of money has been wasted thanks to some short-sighted and inefficient government handling of Internet domains - but then short-sighted and inefficient handling is what governments excel at.

The New Zealand Way ltd has also behaved questionably. Why pay so much? Why offer that sum before a case over the domain's ownership had even been decided? And why make no effort to consult or inform anyone else until the deal was done? Presumably because it knew that it wouldn't be allowed to spend so much money on a domain just because it has set its heart on it.

Is the domain worth that much? It's hard to tell and the arguments are many and varied. Tourism to New Zealand is clearly worth far far more than US$500,000 but the question is: how much additional value does bring to the country?

Even if you work out how much business in terms of direct or indirect bookings will be done through the domain, that is to completely ignore the fact that most people find sites through search engines so a domain's name is less and less important each year than what is contained within it. (As an example "new zealand visit" in Google gives non-government as the first result. high rating is entirely due to Virtual Countries' previous efforts.)

Buying the .com also ignores the movement away from generic domain names and towards country code domains - in this case .nz - as people become more savvy about the international nature of the Internet.

Perhaps you could make a case for the purchase of for US$500,000. But the over-riding fact remains that a government-owned company went out of its way to make sure it didn't have to and didn't have to justify such tax-payer expense. Whichever way you look at it, that can't be a good thing. ®

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