The marginal profit for domain name registrations can be as high as 70% and operational costs are relatively low; and judging from the saturation of English domain name registrations, the market for Chinese domain name registrations would seem a goldmine full of potential. It is little wonder that many companies are eyeing the market.
Besides NSI, commissioned bodies like CNNIC, TWNIC, HKNIC and even private firms like i-DNS.net, 3721 Internet and MyDNS are all actively refining their respective technologies in a bid to make theirs a global standard.
It is not an exaggeration to say that domain name registration rakes in big money. NSI has monopolized for years the domain name registration industry, chalking up a total of more than 20 million registrations. At US$35 per registration (the 2-year registration fee was US$50 with a one-time payment of US$100 years ago), the profit figures speak billions. Registrants must continue to make an annual payment of US$35 to retain their domain name, which means not only does the registration business make profits it guarantees a stable yearly income for the company. Even though NSI stopped practicing its monopoly last year by admitting registrars into the industry, the new registrars are technically still very much dependent on NSI's registry and do profit NSI with every registration they process. This June, VeriSign acquired NSI at US$153 billion, a clear indication of how lucrative the registration business is.
Tough Competition Between Different Technologies
As the advent of Chinese domain names is still at its infancy phase, the lack of an evolved standard creates a war zone for the various technological companies. Although the companies are all said to be offering Chinese domain name registration services, their modes of operation are in fact vastly different. TWNIC, for example, will be offering registrations of domain names like [.tw] as the organization possess rights to the [.tw] TLD and by default even the Chinese domain names must conform to standards.
Locally, private firm 3721 Internet offers free registrations of Chinese domain names where registrants would only need to key in a name like . If the domain name has been registered with 3721 Internet, users would be directly linked to the relevant web site. Although it is convenient to just key in a Chinese name without TLD tags, it is necessary that users must install a plug-in for their browsers in order to decipher the names. However users can but only access websites that are registered with 3721 Internet. Despite so, as 3721 Internet is providing the registration and plug-in software for free, it has proven to be very popular in Hong Kong.
Negotiating a Standard System for China, Taiwan, Hong Kong and Macau
A Singaporean firm from America, i-DNS.net International, has developed Internationalized Domain Name System (i-DNS), a technology which supports Chinese domain names ending with ,  and . Supposing Apple Daily has registered with the firm, keying in  would provide access to the website. Likewise,  is not a recognized standard and users would have to download a program to update their browsers.
As these systems are reliant on their respective plug-in software in order to operate, its lack of universality defeats the concept of a globally accessible Internet. In view of this, NSI has announced its registration offering of Chinese domain names tagged with .com, .net and .org. This would eliminate the need for browsers to be installed with additional plug-ins to recognize a domain name like [. com]. However, other problems start surfacing: of so many companies bearing the same Chinese name in the world, which one would reserve the rights to own its respective Chinese domain name? If a company has already registered with NSI a domain name in English, would it be given priority to register for its Chinese counterpart?
In the meanwhile, CNNIC, TWNIC, HKNIC and MONIC are negotiating for a common standard system in support of Chinese domain names. It is believed that the newly derived system would be of a different technological standard. Even if the system is highly accommodative and compatible with the other existing systems, what would happen if a registrant registers [.com] with NSI, another registering  with i-DNS.net, and a third  registered with 3721 Internet? Who would be the true owner of the Chinese domain name of ? It seems like the clash between the Titans in the domain name registration industry is going to last for a long time.
-- Translated Article