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.trust gTLD might be for sale as NCC closes domain business

Kevin Murphy, September 1, 2016, 07:29:34 (UTC), Domain Registries

NCC Group has stroppily departed from the domain name business but is evading questions about whether its .trust gTLD is for sale.
The company last month told the markets that it is to “cut its losses” and get rid of its Open Registry registry/registrar business, which it acquired for up to £14.9 million ($22.6 million) just 19 months ago.
But it left open the question of whether it would also divest .trust, the gTLD it acquired from Deutsche Post for an undisclosed sum a year earlier.
Talking to The Telegraph earlier this week, NCC CEO Rob Cotton had some harsh words for the new gTLD industry:

People thought there’d be a need for lots of generic domains, but there’s no need for them at all, it’s only good news for bad guys who can get them for free and pretend to be anyone.

It’s not exactly a volte face from NCC, which has repeatedly published research showing consumers don’t trust new gTLDs.
The company had been banking on .trust (a back-up plan after it failed to obtain .secure, which it had originally applied for) to showcase its potentially higher-margin domain security services.
In its full-year 2016 financial results last month, the company said it was closing down its domain services division, taking a charge of over £13 million as result.
Forty-five people lost their jobs as a result of change in strategy.
The closure does not appear to apply to its data escrow business, which has proven popular among new gTLD registries. That business sits within a separate Escrow Division.
The company said:

It is clear that the open generic domains and city codes have not been taken up by businesses and consumers as well as expected with all of these falling well short of their initial registration targets. Coupled with the fact that the branded domains are still either undelegated or those that are, are unused, it is clear that the market is not ready for the very necessary changes that need to happen to strengthen security on the Internet.

The domains division brought in just shy of £5 million ($6.6 million) in the year to May 31, but most of that was due to its withdrawal of its application for .secure. The division was making a loss.
On .trust, which the company reckons is worth £4.2 million, NCC was less than clear about its plans.
It said in its results that it “will continue to use .trust as the Group’s domain”, but that could merely mean it will continue to use nccgroup.trust as its primary web site.
I asked the company whether .trust was for sale this week and received the following PR statement:

NCC Group said in their FY results statement that certain parts of the Domain Services Division will be divested in due course, although the capability to provide a secure domain environment will be retained. They also stated that this will involve the diminution and realisation of assets. They said that Open Registry is to be realised and other assets written down.
They also made the point that they are still committed to the concept behind domain services and have retained the ability to provide a secure, managed environment when the marketplace changes.

Given the language, I would err towards .trust not being for sale, but the fact that the firm declined to give a straight answer it seems possible that it actually is.

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Comments (3)

  1. Jovenet Consulting says:
    September 1, 2016 at 9:45 am

    With Round 2 of the ICANN new gTLD program coming, the NCC group has the capacity to offer the complete range of service: Back-end Registry, escrow service provider, Registrar, new gTLD consultancy services. I hope to be able to read an offer soon.

    Reply
  2. Eric Lyon says:
    September 1, 2016 at 3:57 pm

    It’s sounds like they may have liquidated everything except the .Trust extension. Maybe, holding onto it as their last hope in bouncing back. It’s a pretty common strategy for companies to liquidate in order to refinance their strongest asset.

    Reply
  3. Dot Advice says:
    September 3, 2016 at 8:14 pm

    £4.2M for 51 DUMs. They must be joking.

    Reply

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