He’s the Master Of His Domain Name

The place Eric Gullichsen calls home is a charmingly rustic, century-old ferryboat, the Vallejo, now out of service and moored just off Sausalito, Calif., in San Francisco Bay. But his real home is the virtual world of the Net, an insight he achieved while hunched over a laptop in a hotel bathroom in Bhurban, Pakistan (the john being the only place where he could plug in his modem). He was logged onto the Web, fiddling with a line of code for one of his company’s main computers, when the epiphany came: “This works! The Internet has happened! I’m placeless now.”

And placeless is where Gullichsen has always wanted to be. At 38, the wiry, snaggle-haired programmer has achieved what for many entrepreneurs would be the ultimate American Dream: a frictionless, self-propagating moneymaking scheme–in his case, selling a variant of the “domain names” that organize the Web’s millions of addresses. “The great thing about my company,” he says cheerfully, “is that it doesn’t really exist.”

It has, however, left some tracks–primarily on Tonga, a Pacific island kingdom where Gullichsen washed ashore a few years back after wandering the globe on profits from the sale of his first two companies: the virtual-reality venture Sense8 and the “virtual TV” start-up Warp. Tonga is a tiny place (pop. 100,000), and Gullichsen soon made a powerful friend, the island’s Crown Prince Tupouto’a, who appointed him technology adviser to the Ministry of Foreign Affairs and Defense, responsible for everything from Tonga’s air-surveillance network to its e-mail system.

It was the e-mail project that got Gullichsen and his longtime business partner, Eric Lyons, thinking. The ever growing Web now has hundreds of millions of sites, most organized into three so-called top-level domains: com net and org The demand for com names has advanced to the point where speculators who snap up the most valuable ones can resell them for thousands and even hundreds of thousands of dollars. (Three Star Wars sites–EPISODEI.com and its two sequels–were recently sold for $1 million on eBay.) Given that the number of websites is doubling every year, the demand for new com names must someday outstrip the supply.

The two Erics decided the best way to beat the com system (and make some easy money in the process) was to circumvent it. There’s nothing magical about the letters com they reasoned; why not just use, say, .to for Tonga?

So in 1997, with the Crown Prince’s permission, Gullichsen and Lyons started Tonic Corp. and began selling Tonga domain names on a first-come, first-served basis. Bummed that the cool website name you thought of is already taken? Visit http://www.tonic.to with a valid credit card, and they’ll sell you the same name in the .to domain. Price: $100 for the first two years. You can still host your site from your PC in Topeka, Kans.; the name will just be registered by a company based on an island you probably can’t find on a map.

Two years later, the site has registered some 17,000 names, including such flagrantly poached brand names as Rolex, Coke and Scientology. These aren’t big numbers by Internet standards, but they aren’t bad either–especially for a firm whose two employees spent about $3,000 to get things rolling and, because the entire operation is run automatically by computers, now have roughly zero overhead. “I collect the names and make sure the servers are running,” says Lyons with a Cheshire-cat grin, “and spend the rest of the time fixing my boat.”

This business model may be contagious; a few weeks after Tonic’s first press release, William Semich, executive editor of the industry trade publication WebWeek (now Internet World), announced his own “.nu” domain registry, based on the even tinier (pop. 2,000) South Pacific island of Niue. (Semich says he started his venture months earlier.)

But Gullichsen isn’t sweating the competition. Instead he’s readying his next company, MetaCorp, due for launch this summer. It will allow customers to license their own offshore companies, complete with online banking, all dispensed via another self-run website based, like Tonic, in Gullichsen’s Tonga fiefdom.

And with the cash these virtual companies siphon out of the old world order, Gullichsen plans to build a new one. The crown prince has given him the run of a tiny Tongan outrider island, which Gullichsen hopes to turn into a prototype sustainable environment. “I’m setting up an ecologically closed community,” he says. “I’ll have a wind generator, solar panels, a geodesic dome and hydroponics. I want to live off the grid but still be online–be connected to the global fabric but from a venue that is free from regulation and in harmony with the environment.” It’s no Pakistani bathroom, but the principle is pretty much the same.