Latest news of the domain name industry

Recent Posts

Afilias bought .io for $70 million

Kevin Murphy, November 9, 2018, 21:59:02 (UTC), Domain Registries

Did you know Afilias owns .io? I didn’t, but it paid $70 million for the popular alternative TLD 18 months ago.
A recently published financial statement in Ireland shows that the company spent $70.17 million cash — a 10x revenue multiple — for 100% of Internet Computer Bureau Ltd in April 2017.
ICB runs .io, .ac and .sh, the ccTLDs for the British Indian Ocean Territories (.io), Ascension Island (.ac), and Saint Helena, Ascension and Tristan Da Cunha (.sh).
Afilias has never publicly announced the deal, and I haven’t seen it reported elsewhere, so I thought it was worth blogging up here.
At the time, the deal was characterized to registrars as a back-end contract win.
But it seems that Afilias actually purchased the back-end provider, then migrated (not as smoothly as it usually does) the TLDs over to its own infrastructure.
That would have opened up .io to all the registrars already plugged in to Afilias’ TLDs, potentially greatly increasing its reach.
But it’s probably not just the back-end Afilias has acquired.
Would a registry service provider spend 10 times annual revenue on a ccTLD back-end contractor, unless it had a damn good reason to believe that it would be able to at least recoup its investment, either through a long-term contract or some other mechanism?
It’s quite possible Afilias actually bought the .io ccTLD Manager.
The ccTLD Manager listed by ICANN in the IANA database is “IO Top Level Domain Registry”, but “c/o Sure (Diego Garcia) Limited”. That changed a week or so ago from “IO Top Level Domain Registry, Cable & Wireless”
Sure is the arm of telecommunications firm Cable & Wireless that provides internet access to remote islands in various parts of the world.
I don’t know what “IO Top Level Domain Registry” is.
Afilias tells me confidentiality arrangements are in place.
.io has proven popular as a TLD for technology startup companies that couldn’t get the .com they wanted.
Across its small portfolio, ICB was a $6.9 million business last year, but .io, with a reported 270,000 domains, must account for the large majority of that.
Due to the timing of the deal, ICB contributed $5.3 million to Afilias’ top line and was the main reason its revenue grew last year, its 2017 accounts reveal.
In 2017, Afilias saw revenue grow from $106.7 million to $113.6 million. Profit before tax was down slightly, from $38.6 million to $36 million
Again, that was due largely to ICB, which contributed $1.4 million of red ink to the bottom line.
Afilias is a private company, by the way, which is why these numbers all refer to 2017. It’s the final full year of it being based in Ireland, before its move to the US for tax reasons.
The disclosure also reveals that Afilias took a 45% stake in Dot Global, manager of the .global gTLD registry, in December 2017.
Dot Global had revenue of $1.9 million and a $320,000 loss last year, the report states.
doMEn, the Montenegro ccTLD (.me) operator in which Afilias has a 36.85% share, made a profit of $2.59 million on revenue of $7.39 million, it says. Both of those numbers were down slightly on 2016.
Afilias also says in the filing that it expects revenue to be down in 2018, due to the renegotiation of back-end contracts. I gather the contract with Public Interest Registry, which reportedly could cost about $10 million a year, is the main problem.
Given the accounts were signed off in May this year, it seems that this decline is expected despite the lucrative .au ccTLD contract, which Afilias signed at the end of 2017.

Tagged: , , , , ,

Comments (13)

  1. Rob Hall says:

    Great win for Afilias. Super smart.
    Only downside I see is it puts .io squarely in the jurisdiction of the US courts and takedown court orders.
    I think .io was often considered one of the ccTLD’s that was fairly immune from typical takedown procedures.

  2. Mark Thorpe says:

    Afilias gives .io stability, but shady (crypto) .io domain owners won’t like Afilias owning the .io registry. Harder to do scams etc.

  3. Matt Nordhoff says:

    The so-called British Indian Ocean Territory was stolen by the British to build an American military base. It’s fitting for its ccTLD to follow a similar path.

  4. Mr James Stevens says:

    “I don’t know what “IO Top Level Domain Registry” is.”
    My research suggests it doesn’t exist and never has.

  5. Mr James Stevens says:

    This press release from 2017 seems oddly worded, considering they bought ICB !!!???!?!
    “Afilias Wins Contract to Run Backend Registry Services for .io, .ac and .sh
    April 12, 2017 by Michele Neylon
    Afilias has won the contract to run the backend registry services for a number of country code domain extensions. The new contract will see Afilias handling the technical side of .io, .ac and .sh which are currently run in-house by The Internet Computer Bureau.”

    • Kevin Murphy says:

      That’s not a press release from Afilias, it’s a blog post from a registrar, I believe based on what the registrars were told by Afilias at the time of the handover.

Add Your Comment