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Wagner takes dig at Verisign as GoDaddy reports $310 million domain revenue

Kevin Murphy, November 7, 2018, Domain Registrars

GoDaddy CEO Scott Wagner ducked a question about how the company will react to future .com price increases during its third-quarter earnings call yesterday, but used the opportunity to take a gentle swipe at Verisign.

Asked by an analyst whether the first 7% price increase, almost certainly coming in 2020, would have any effect on GoDaddy’s gross margins (ie, will they shrink as the company swallows increased costs, or swell as it increases its own prices above 7%), Wagner said:

the last time VeriSign took a price increase the industry passed that through to the end registrant.

.com and more importantly the software around bringing somebody’s .com to life is valuable and, modestly, we’re providing the value in that relationship around taking a domain name and actually turning it into something that somebody cares about.

I’m interpreting that as a pop at the idea that Verisign enjoys the fat registration margins while GoDaddy is the one that actually has to market domains, up-sell, innovate, deal with customers, and so on.

The remarks came just a few days after Verisign, in a blog post, branded GoDaddy and other secondary-market players “scalpers”, infuriating domainers.

Wagner was talking to analysts as the market-leading registrar reported revenue for Q3 of $679.5 million, up 16.7% year over year.

Revenue from domains, still the biggest of its three reporting business segments, was $309.5 million, up 14.0% compared to the year-ago quarter. GoDaddy now has 18 million customers and over 77 million domains under management.

Overall net income was down to $13.2 million from $22.4 million, as operating expenses rose over 16% to hit $642 million, after the company invested more in marketing, development and so on. Its operating income was $37.5 million.

Contrast this with Verisign’s performance for the same quarter, reported two weeks ago.

It saw revenue about the same as GoDaddy’s domains revenue — $306 million — but net income of $138 million and operating income of $195 million.

GoDaddy and Verisign could find themselves competing before long. As part of its deal with the US government to allow it to raise .com wholesale prices once more, the government also lifted its objection to Verisign becoming a registrar, just as long as it does not deal in .com names.

Spammy .loan makes Alibaba fastest-growing and fastest-shrinking registrar in June

Kevin Murphy, October 5, 2018, Domain Registrars

Chinese registrar Alibaba was both the fastest-growing and fastest-shrinking registrar in June, purely due to its dalliance with hundreds of thousands of cheap .loan domain names.

Stats compiled by DI from the latest monthly registry reports show that Alibaba’s Singapore-based registrar — which has only been active for a year — grew its domains under management by 720,669 in June, almost four times as many as second-placed NameCheap.

The huge increase was due to Alibaba’s DUM in .loan doubling in June, going from from 621,851 to 1,274,532. Another 50,000 extra domains came from .win.

Both .loan and .win are run by registry GRS Domains, the company that replaced Famous Four Media as manager of the Domain Venture Partners gTLD portfolio.

According to SpamHaus, .loan has a “badness” of just shy of 90%, based on a sample size of 45,000 observed domains. SpamHaus has .win at almost 39% bad.

GRS has promised to turn its portfolio around and cut off its deep-discounting promotions effective August 20. The June figures reflect a time when discounts were still in place.

The Singapore Alibaba had DUM of 1,771,730 at the end of June.

At the bottom end of the June league table was a second Alibaba accrediation, Beijing-based Alibaba Cloud Computing (aka HiChina or net.cn), which had a net DUM loss of 266,411, after seeing 345,268 deletes in .loan (along with 45,000 deletes in .xyz and 35,000 in .xin).

The second biggest loser was AlpNames, which is owned by the same people as Famous Four, which deleted over 114,000 names in the month. The vast majority of these names were in FFM/GRS gTLDs, including .loan.

The main, earliest Alibaba accreditation, Alibaba Cloud Computing (Beijing), which has zero exposure to new gTLDs, grew by 69,794 domains to end June as the seventh fastest-growing registrar with DUM of 7,672,594.

As of a couple weeks ago, Alibaba has a fourth ICANN accreditation, Alibaba Cloud US LLC, but that obviously does not figure into the June numbers.

Here’s the top 10 registrars for June by DUM growth:

Registrar (IANA ID)DUMTransfers InTransfers OutNet TransfersAddsDeletesChange
Alibaba.com Singapore E-commerce Private Ltd (3775)1771730230017228339416345720669
NameCheap, Inc. (1068)862443322140891613224418008253219187827
GoDaddy.com, LLC (146)59208467703796893114481131439951837153910
NameSilo, LLC (1479)1670604144276041838613653932107111151
Xin Net Technology Corporation (120)262370941275041-91415315466679102744
Google LLC (895)231378010763169190721253194944079148
Alibaba Cloud Computing (Beijing) Co., Ltd. (420)76725941907811732734622080515525869794
Network Solutions, LLC (2)708437552854143003855412243811062853712
GMO Internet, Inc. d/b/a Onamae.com (49)47051283043209195214625917494644668
TLD Registrar Solutions Ltd. (1564)12186886858-77239315232535877

And the bottom 10:

Registrar (IANA ID)DUMTransfers InTransfers OutNet TransfersAddsDeletesChange
Alibaba Cloud Computing Ltd. d/b/a HiChina (www.net.cn) (1599)446845116192891330202094509820-266411
Alpnames Limited (1857)3613027165366314273114254-112825
Chengdu West Dimension Digital Technology Co., Ltd. (1556)2270000422719452282148101269286-94937
Bizcn.com, Inc. (471)9202431203336-3216603663268-69862
eNom, LLC (48)6824378915328741-1958875665101336-52205
Domain.com, LLC (886)197492715348827-72932361958695-37594
Todaynic.com, Inc. (697)13652775154-79138527795-26771
Register.com, Inc. (9)197625412953484-21891918737626-26231
Wild West Domains, LLC (440)300078434777346-38693101546045-18883
Ascio Technologies, Inc. Danmark - Filial af Ascio technologies, Inc. USA (106)157968313143803-24891183828246-16839

You may notice that in both tables the net change column is not equal to the sum of adds and net transfers minus deletes. This is because, per ICANN contract, domains still in their five-day Add Grace Period are counted in DUM but not in adds, so many adds slip over into the following month.

Parsons quits GoDaddy board

Kevin Murphy, October 3, 2018, Domain Registrars

Bob Parsons has resigned from GoDaddy’s board of directors, 21 years after he founded the company.

The registrar announced today that Parsons will leave this Friday to devote more attention to his philanthropic Bob and Renee Parsons Foundation and to the various motorcycle and golf-related businesses he runs under the Yam Worldwide brand.

He was CEO of GoDaddy from 1997 until 2011 and executive chairman until 2014.

The company is of course the runaway success story of the competitive registrar market, using a combination of cheap prices and bold marketing to eat incumbent Network Solutions’ lunch in just a few short years.

Today, it has over $2.2 billion in annual revenue and somewhere in the region of 60 million domains under management, and that’s just the gTLDs.

GoDaddy’s success made Parsons himself a billionaire.

Donuts says DPML now covers “millions” of trademark variants as price rockets again

Kevin Murphy, October 1, 2018, Domain Registrars

Donuts has added more than a third to the price of its Domain Protected Marks List service, as it adds a new feature it says vastly increases the number of domains trademark owners can block.

The company has added homograph attack protection to DPML, so trademark-owning worrywarts can block variations of their brand that contain confusing non-Latin characters in addition to all the domain variants DPML already takes out of the available pool.

An example of a homograph, offered by Donuts, would be the domain xn--ggle-0nda.com, which can display as “gοοgle.com” and which contains two Cyrillic o-looking characters but is pretty much indistinguishable from “google.com”.

Donuts reckons this could mean “millions” of domains could be blocked, potentially preventing all kinds of phishing attacks, but one suspects the actual number per customer rather depends on how many potentially confusable Latin characters appear in the brands they want to protect.

DPML is a block service that prevents others from registering domains matching or closely matching customers’ trademarks. Previous additions to the service have included typo protection.

The new feature supports Cyrillic and Greek scripts, the two that Donuts says most homograph attacks use.

The company explained it to its registrars like this:

The Donuts system will analyze the content of each SLD identified in a DPML subscription, breaking it down to its individual characters. Each character is then “spun” against Unicode’s list of confusable characters and replaced with all viable IDN “glyphs” supported by Donuts TLDs. This spinning results in potentially millions of IDN permutations of a brand’s trademark which may be considered easily confusable to an end user. Each permutation is then blocked (removed from generally available inventory) just like other DPML labels, meaning it can only be registered via an “Override” by a party holding a trademark on the same label.

While this feature comes at no additional cost, Donuts is increasing its prices from January 1, the second big increase since DPML went live five years ago.

Donuts declined to disclose its wholesale price when asked, but I’ve seen registrars today disclose new pricing of $6,000 to $6,600 for a five-year block.

That compares to retail pricing in the $2,500 to $3,000 range back in 2013.

Hexonet said it will now charge its top-flight resellers $6,426 per create, compared to the $4,400 it started charging when DPML prices last went up at the start of last year. OpenProvider has also added two grand to its prices.

Donuts said the price increase also reflects the growth of its portfolio of gTLDs over the last few years. It now has 241, 25% more than at the last price increase.

Chinese registrars on the decline

Kevin Murphy, October 1, 2018, Domain Registrars

Having been on a growth trajectory for some years, the number of ICANN-accredited registrars based in China appears to be on the decline.

According to my records, so far this year 26 registrar contracts have been terminated, voluntarily or otherwise, 11 of which were Chinese. I’m excluding the mass drop of Pheenix accreditations from these numbers.

The country with the next-highest number of terminations was the USA, with three.

ICANN has terminated nine registrars for breaches of the RAA this year, six of which were Chinese.

All the Chinese notices included non-payment of ICANN fees as a reason for termination, though it appears that most of them had a negligible number of gTLD domains under management.

ICANN Compliance tells me there’s no particular focus of China at the moment, this is all a result of regular day-to-day enforcement.

ICANN has sent breach notices to 28 companies this year, seven of which were to Chinese registrars.

Meanwhile, 22.cn has moved 13 of its accredited shell registrars to Hong Kong. Another registrar moved its base from China to Australia.

Seven Chinese registrars have been newly accredited this year,

Net, this has all reduced the number of accredited registrars based in China to 91.

The country still has the second-most registrars ahead of the US, with its almost 2,000 registrars, and a clear 31 registrars ahead of third-place India.

$3.2 million-a-year registrar up for grabs

Kevin Murphy, October 1, 2018, Domain Registrars

Swedish ccTLD registry IIS is to sell off its registrar business, .SE Direkt, which is expected to bring in some $3.2 million in revenue this year.

The foundation said today that .SE Direkt has 121,836 .se domains under management and 87,852 customers, 66,819 of which are corporate.

That represents about 7% of the total .se market by domains.

IIS created the registrar in 2009 as part of its transition to a competitive two-tier sales model.

The registry explained in a note to press:

The idea was that it would work as a transition solution and that domain name holders would gradually transfer to other registrars. The number of customers has not fallen at the expected rate, but after 10 years it is on a level where IIS believes that the time is right to no longer continue with the registrar operations.

The buyer, which will have to be or become an IIS-accredited .se registrar, will get the customer base, domain database and two-year brand license, but none of the staff or other assets of the unit.

.SE Direkt sells .se names for 270 SEK ($30.27) per year.

Its revenue for 2017 was SEK 29.8 million ($3.3 million) and is expected to decline to SEK 28.3 million ($3.2 million) in 2018. The buyer would take over from the start of 2019.

There’s obviously a risk here that revenue is on a downward trajectory due to IIS’s aforementioned strategy of deliberately shedding customers.

Some effort to reverse this trend may be required by whoever takes over.

Stats on churn, usage, transfers and so on can be found in this IIS RFP (pdf).

IIS said that bids from interested parties must be submitted by October 17 and the foundation expects to select the winner by November 1.

Cloudflare selling all domains at cost: “All we’re doing is pinging an API”

Kevin Murphy, September 28, 2018, Domain Registrars

Content delivery network provider Cloudflare has promised to sell domains in all TLDs at the wholesale cost, with no markup, forever.

The company made the commitment yesterday as it announced its intention to get into the registrar business.

Founder Matthew Price used the announcement to launch a blistering attack on the current registrar market, which he said is charging “crazy” prices and endlessly upselling their customers with unwanted, worthless products. He blogged:

why should registrars charge any markup over what the TLDs charge? That seemed as nutty to us as certificate authorities charging to run a bit of math. When we see a broken market on the Internet we like to do something about it.

we promise to never charge you anything more than the wholesale price each TLD charges. That’s true the first year and it’s true every subsequent year. If you register your domain with Cloudflare Registrar you’ll always pay the wholesale price with no markup.

For instance, Verisign, which administers the .com TLD, currently charges $7.85 per year to register a .com domain. ICANN imposes a $0.18 per year fee on top of that for every domain registered. Today, if you transfer your .com domain to Cloudflare, that’s what we’ll charge you per year: $8.03/year. No markup. All we’re doing is pinging an API, there’s no incremental cost to us, so why should you have to pay more than wholesale?

There are catches, of course.

For starters, the service is not available yet.

Price wrote that Cloudflare will roll it out gradually — for inbound transfers only — to its “most loyal” customers over an unspecified period. Even customers on its cheapest plans will get access to the queue, he wrote.

Eventually, he said, it will be available “more broadly”.

It will be interesting to see if the no-markup pricing could become available to non-customers too, and whether it sticks to its business model when its support lines start ringing and it becomes apparent the business is actually big ole cash vampire.

Cloudflare has been ICANN-accredited for several years, but it’s only been offering registrations to high-value enterprise customers so far.

My records show that it has not much more than 800 domains under management, all in .com, .net, .org and .info.

The announcement was made, perhaps not coincidentally, a couple days after CRM software provider Zoho made headlines when its 40 million customers were taken offline because its former registrar suspended zoho.com over a trivial level of abuse. In response to the screw-up, Zoho transferred the domain to Cloudflare.

Com Laude acquires Scottish rival

Kevin Murphy, September 11, 2018, Domain Registrars

Brand protection registrar Com Laude has picked up smaller competitor Demys for an undisclosed sum.

Demys, based in Edinburgh, is an ICANN-accredited registrar that specializes in the UK automotive, retail/leisure, media and consumer goods sectors.

It also acts as the registry manager and exclusive registrar for .bentley, the lightly-used dot-brand of luxury car-maker Bentley Motors.

It had around 12,000 gTLD domains under management at the last count, about 7,200 of which were in .com.

It’s about an eighth the size of Com Laude in terms of gTLD domains under management.

Demys has a very light footprint in new gTLDs, with local geo .scot — where it is the largest corporate registrar and fifth-largest registrar overall — being a notable exception.

London-based Com Laude said it was also interested in the company for its brand monitoring services and dispute resolution work.

Two of Demys’ top guys act as arbitrators for UDRP and .uk’s Dispute Resolution Service.

CentralNic acquired yet another company

Kevin Murphy, September 7, 2018, Domain Registrars

Acquisitive registry/registrar CentralNic has picked up another company, paying up to €2.56 million ($2.95 million) for a small Delaware-based registrar.

It will pay €1.5 million up-front for GlobeHosting, with the rest coming in two annual installments.

GlobeHosting may have a US corporate address, but it plays primarily in the Romanian and Brazilian markets.

It’s not ICANN-accredited. Instead, it acts as a Tucows reseller for gTLD domains (though I imagine that arrangement’s days are numbered).

The company had revenue of €849,000 for the 12 months to July 31 2018 and EBITDA of €419,000, CentralNic said.

The timing is arguably opportunistic. Earlier this year, Romanian registry ICI Bucharest (or ROtld) introduced an annual domain registration renewal fee for the first time (for real).

It recently started deleting names that do not pay the fee, a modest €6 per year.

CentralNic said that GlobeHosting, which appears to be notable player in the .ro market, is “expected to benefit” from this change.

.tel’s second-biggest registrar gets canned

Kevin Murphy, August 31, 2018, Domain Registrars

A Chinese registrar that focused exclusively on selling .tel domain names has been shut down by ICANN.

Tong Ji Ming Lian (Beijing) Technology Corporation Ltd, which did business as Trename, had its registrar contract terminated last week.

ICANN claims the company had failed to pay its accreditation fees and failed to escrow its registration data.

The organization had been sending breach notices since June, but got no responses. Trename’s web site domain currently resolves to a web server error, for me at least.

Trename is a rare example of a single-TLD registrar, accredited only to sell .tel domains. It didn’t even sell .com.

It is Telnames’ second-largest registrar after Name.com, accounting for about 6,000 names at the last count. At its peak, it had about 55,000.

Its share seems to be primarily as a result of a deal the registry made with a Chinese e-commerce company way back in 2011.

I’m a bit fuzzy on the details of that deal, but it saw Trename add 50,000 .tel names pretty much all at once.

Back then, .tel still had its original business model of hosting all the domains it sold and publishing web sites containing the registrant’s contact information.

Since June 2017, .tel has been available as a general, anything-goes gTLD, after ICANN agreed to liberalize its contract.

That liberalization doesn’t seem to have done much to stave off .tel’s general decline in numbers, however. It currently stands at about 75,000 names, from an early 2011 peak of over 305,000.

ICANN told Trename that its contract will end September 19, and that it’s looking for another registrar to take over its domains.

With escrow apparently an issue, it may not be a smooth transition.