January 7, 2004

How the Internet Boom Helped Tiny Tuvalu

Free2Innovate.net links to an interesting story from Business 2.0 magazine about how the small South Pacific island nation of Tuvalu cashed in on the Internet boom.

Of all the dreams fueled by dotcom hype, few were more irrationally exuberant than those of Tuvalu, a dirt-poor nation of 11,300 citizens living on nine South Pacific atolls. When Internet architects assigned two-letter country codes for foreign Internet sites, Tuvalu was assigned .tv. By 1998 its government was receiving lucrative proposals to arrange the sale of domain names like abc.tv and m.tv. Bikenibeu Paeniu, prime minister at that time, predicted that ".tv will bring Tuvalu $100 million over 10 years" - big money for a country with a gross national product of just $20 million, much of it from foreign aid.

Reality didn't quite live up to the prediction. In 1999, Tuvalu inked a deal with Bill Gross's Idealab to establish Los Angeles-based .TV Corp. as the sole broker of .tv domains. The deal brought Tuvalu $12.5 million up front and an additional $1 million per quarter. But according to government officials, the venture burned through nearly $60 million promoting the domain brand, and in 2002, VeriSign acquired .TV Corp. for $45 million. Tuvalu got $10 million for its share, along with reduced quarterly payments of $550,000.

The truth is, Tuvalu probably isn't sinking. TechCentralStation.com regular contributor Dr Sallie Baliunas and Harvard College Observatory associate Willie Soon explain. Excerpt:

All these measurements show that Tuvalu has suffered, at worst, no sea level rise. ... That said, there are some local problems that have changed the coastline of Tuvalu and mimic sea level rise. Sand is excavated for building material on Tuvalu. The excavation for building material has eroded the beach, thus giving the impression of rising sea to the casual observer. "The island is full of holes and seawater is coming through these, flooding areas that weren't normally flooded 10 or 15 years ago," according to Tuvalu environmental official, Paani Laupepa. It is likely that the beach erosion and building on the island caused the sea flooding of areas over the last decade. And that is a true environmental concern. But it is a local, man-made problem that will not be solved with massive cuts in carbon dioxide emission.