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Rightside to modernize eNom, predicts $75m new gTLD revs

Rightside used its first quarter earnings call yesterday to address, albeit indirectly, some of the criticisms recently leveled at it by activist investors and competitors.

CEO Taryn Naidu revealed for the first time how the company sees the new gTLD market playing out in the longer term.

He said than in three to five years, Rightside expects annual revenue from its registry business to come it at $50 million to $75 million.

That’s a hell of a lot more than it makes today.

In the first quarter, registry revenue was $2.6 million, compared to $1.6 million a year ago. Annualized, that’s a shade over $10 million.

On the back of an envelope, Rightside seems to need roughly 50% growth per year over five years to hit the low end of its target.

Naidu told analysts that one factor built into this projection is that third-party registrars will start to sell just as many new gTLD domains as Rightside’s registrars do.

Currently, Rightside sees 15% to 20% new gTLD, but with others it’s 3% to 5%, he said.

Naidu said he expects margins to be 20% at the EBITDA level.

The revelation of these targets may go some way to address investor concerns that Rightside is putting too much effort into its new gTLD business at the expense of its cash-generating registrars.

J Carlo Cannell of Cannell Capital expressed these views and others in March, and was supported by fellow investor Frank Schilling, CEO of Uniregistry.

Naidu last night also addressed concerns about eNom, which Cannell had called a “time capsule” due to its aging user experience.

He admitted that eNom is “encumbered by some older technology” but said it was being fixed.

“Later this quarter we will be rolling out the first phase of our development efforts, which include a dramatically revamped user interface, a new suite of software development tools and a new developer hub to help our partners learn, develop and test faster,” he said.

The registrar business brought in $44 million in the quarter, up from $41.9 million. Aftermarket revenue was $9.3 million compared to $7.3 million.

Overall, revenue was up 9% at $55.1 million, with a net loss of $5.1 million. That compared to income of $1.9 million a year ago.

Naidu also seemed to obliquely address the criticism that a lot of Rightside’s new gTLDs are shit — .democrat, .dance, .army, .navy, and .airforce have been singled out by Cannell and others — by talking about how the company doesn’t necessarily put the same amount of effort into marketing its whole stable.

Some gTLDs will be marketed more heavily later, he said, comparing it to a real estate owner holding on to parcels of land for later development.

Naidu also talked up Rightside’s prospects in China, where apparently .pub is doing quite well because registrants think it means “public” rather than “drinking establishment”.

.flir becomes the 1,300th TLD

There are now 1,300 top-level domains live on the internet.

The milestone was hit today when the dot-brand .flir was delegated to FLIR Systems, a $1.5 billion-a-year thermal imaging systems manufacturer.

Its nic.flir domain is now live and currently redirects to existing sites in other TLDs.

According to the DI database, there are 292 ccTLDs, of which 45 are internationalized domain names.

There are 1,008 gTLDs of which 84 are IDNs; 985 were applied for in the 2012 new gTLD application round.

Of the gTLDs, 347 are dot-brands (defined as where the registry has signed Spec 9 and/or Spec 13 of the new gTLD Registry Agreement).

ZACR wades into .africa lawsuit, tells judge he screwed up

ZA Central Registry has told the judge in DotConnectAfrica’s lawsuit against ICANN that the preliminary injunction he granted DCA recently was based on a misunderstanding.

The injunction, granted a month ago, prevents ICANN delegating the .africa gTLD to ZACR until the lawsuit reaches a conclusion.

But, in papers filed Friday, ZACR points out that the judge screwed up in his reasoning. Judge Gary Klausner’s ruling was “predicated upon a key factual error”, ZACR says.

The error is the same one I wrote about last month — the judge thinks DCA originally passed the Geographic Names Review of its Initial Evaluation for .africa, and that ICANN later failed it anyway.

In fact, DCA never passed the GNR, and the document the judge cites in his ruling is actually ZACR’s Initial Evaluation report.

The GNR is the bit of the evaluation where both .africa applicants had to prove they had support from 60% of African governments and no more than one African governmental objection.

ZACR said in one of its Friday filings (pdf):

The record is undisputed that DCA’s application had not passed the geographic names evaluation process. And it could not because DCA did not have the requisite support of 60% or more of the African Union governments. Further, DCA’s application had been the subject of 17 “Early Warning” submissions by African Union governments. Correcting for this factual error, the record is clear that DCA has no likelihood of success in this litigation.

ZACR also says Klausner erred by saying .africa could only be delegated once, saying that TLDs can be redelegated to different operators after their initial delegation.

It’s filed a motion asking the judge to “reconsider and vacate” his preliminary injunction ruling.

ZACR is now named as a defendant in the lawsuit, which originally only named ICANN and unidentified parties.

ICANN has dropped its motion to dismiss the case and last week filed its answer (pdf) to DCA’s complaint, in which it denies any wrongdoing.

ICANN appears to be happy to let the judge’s mistake slide, or at least to allow ZACR to burden the risk of potentially pissing him off by highlighting his error.

Donuts wins .doctor

Donuts has emerged the victor of the .doctor gTLD contention set.

Competing applicants Radix and The Medical Registry both withdrew their applications last week.

The string wasn’t due to head to its ICANN last-resort auction until May 25, indicating that the contention set was settled privately.

.doctor has been the subject of some controversy.

ICANN’s Governmental Advisory Committee had insisted that .doctor should be reserved purely for licensed medical doctors.

Donuts had complained that this would rule out use by any of the myriad other types of doctor, as well as registrants using “doctor” in a fanciful sense (like “rug doctor” or “PC doctor”).

ICANN initially accepted the GAC advice, but changed its mind this February, declining to impose such restrictive language on .doctor’s contractual Public Interest Commitments.

So it seems that .doctor will be generally unrestricted.

Donuts will have to sign up to the standard “Category 1” PICs, which require the registry to work with relevant regulatory bodies, however.

African brands wiped off the map as ICANN flips the kill switch on 10 gTLDs

Ten dot-brand gTLDs may never see the light of day, after ICANN sent termination notices to the applicants.

The move means that the number of African-owned dot-brand gTLDs to go live in the current round will be precisely zero.

The 10 affected gTLDs are .naspers, .supersport, .mzansimagic, .mnet, .kyknet, .africamagic, .multichoice, .dstv and .gotv, which were applied for by four South African companies, and .payu, which came from a Dutch firm.

In each case, the applicant had signed a Registry Agreement with ICANN in early 2015, but had failed to actually go live in the DNS within the required 12-month window.

All had deadlines in February or March but failed to meet even extended deadlines.

The condemned gTLDs make up more than half of the total applications originating in Africa.

Of the original 17 African applications, only ZACR’s .joburg, .capetown and .durban city gTLDs have actually been delegated.

Another application, the generic .ummah from Ummah Digital of Gambia, was withdrawn in 2013.

The League of Arab States’ .arab and عرب. are both currently in pre-delegation testing, having signed ICANN contracts in November.

The remaining two applications are both for .africa, which is currently stuck in litigation.

We’re looking at a maximum of six African-owned gTLDs, of a possible 16, going live in the 2012 round.

ICANN was criticized back in 2012 for not doing enough to raise awareness of the new gTLD program, criticisms that have been raised again recently as the community starts to seriously look at how things can be improved for the next round.

UPDATE: This article originally stated that .ummah was a dot-brand application. It was not. The text has been corrected accordingly.