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Cute abruptly quits PIR

Brian Cute unexpectedly resigned as CEO of Public Interest Registry late last week. No reason was given for his departure.

In a May 10 press release, the .org registry said that he’d left May 7.

He’s been replaced temporarily by board member Jay Daley until a permanent replacement can be found.

I asked a PIR spokesperson the reasons for the resignation and was told yesterday: “Brian has chosen to move on to pursue new challenges.”

Hmm.

Cute, a Verisign and Afilias alum, had been with PIR for seven years.

Have your say on single-character .com domains

ICANN wants your opinion on its plan to allow Verisign to auction off o.com, with a potential impact on the future release of other single-character .com domain names.

The organization has published a proposed amendment to the .com registry contract and opened it for public comment.

The changes would enable Verisign to sell o.com, while keeping all other currently unallocated single-character names on its reserved list.

The company would not be able to benefit financially from the auction beyond its standard $7.85 reg fee — all funds would be held by an independent third-party entity and distributed to undisclosed non-profit causes.

The arrangement would also see the buyer pay a premium renewal fee of 5% of the initial outlay, doubling the purchase price over the course of 25 years.

They would not be able to resell the domain without selling the registrant company itself.

It’s a pretty convoluted system being proposed, given that there may well end up only being one bidder.

Overstock.com, the online retailer, has been pressuring ICANN and Verisign to release o.com for well over a decade, and the proposed auction seems to be a way to finally shut it up.

The company has a US trademark on O.com, so any other bidder for the name would probably be buying themselves a lawsuit.

The proposed auction system does not address trademark issues — there’s no sunrise period of trademark claims period.

One party already known to be upset about lack of rights protection is First Place Internet, a search engine company that has a US trademark on the number 1.

It told ICANN (pdf) back in January that the o.com deal would “set a dangerous precedent” for future single-character name releases.

The ICANN public comment period, which comes after ICANN received the all-clear from US competition regulators, closes June 20.

As a matter of disclosure, several years ago I briefly acted as a consultant to a third party in support of the Verisign and Overstock positions, but I have no current interest in the situation one way or the other.

CentralNic now managing failing .fan and .fans

CentralNic appears to be acting as a caretaker for the failing new gTLDs .fan and .fans.

IANA records show that a company lawyer took over as administrative contact for the pair late last week.

Asiamix Digital, the original registry, is still listed as the sponsor for both, and its ICANN registry agreement does not appear to have been reassigned.

It does not appear to be an acquisition. I hear Asiamix is basically using CentralNic’s TLD management service, as it struggles to remain alive.

CentralNic already acts as the back-end registry for both TLDs.

ICANN hit Asiamix with a breach notice for tens of thousands of dollars of unpaid fees a month ago, terminating its affiliated registrar for the same reasons around the same time.

The registry had attempted to auction off the strings a couple of years ago, unsuccessfully.

While technically based in Hong Kong, ICANN has been sending Asiamix’s compliance notices to an address in Milan, Italy.

All of Asiamix’s official web sites still appear to be non-functional. I bought the .net address listed in its IANA records to make a silly point a month ago and the equivalent .com has since expired too.

.fans has about 1,400 names in its zone file right now, while .fan never actually launched.

CIRA has a record year for regs

Canadian ccTLD registry CIRA says its fiscal 2018 was its best year yet for new .ca registrations.

The company today said it registered 537,941 names in the year to the end of March.

Its previous record, from its FY12, was 511,900.

Its current total domains under management was 2,736,980, an all-time high, the company said in a press release.

CIRA has a Canadians-only reg policy, which reduces the impact of foreign speculation.

MMX rejected three takeover bids before buying .xxx

MMX talked to three other domain name companies about potentially selling itself before deciding instead to go on the offensive, picking up ICM Registry for about $41 million.

The company came out of a year-long strategic review on Friday with the shock news that it had agreed to buy the .xxx, .adult, .porn and .sex registry, for $10 million cash and about $31 million in stock.

CEO Toby Hall told DI today that informal talks about MMX being sold or merged via reverse takeover had gone on with numerous companies over the last 11 months, but that they only proceeded to formal negotiations in three cases.

Hall said he’d been chatting to ICM president and majority owner Stuart Lawley about a possible combination for over two years.

ICM itself talked to four potential buyers before going with MMX’s offer, according to ICM.

Lawley, who’s quitting the company, will become MMX’s largest shareholder following the deal, with about 15% of the company’s shares. Five other senior managers, as well as ICM investor and back-end provider Afilias, will also get stock.

Combined, ICM-related entities will own roughly a quarter of MMX after the deal closes, Hall said.

ICM, with its high-price domains and pre-2012 early-mover advantage, is the much more profitable company.

It had sales of $7.3 million and net income of $3.5 million in 2017, on approximately 100,000 registrations.

Compared to MMX, that’s about the same amount of profit on about half the revenue. It just reported 2017 profit of $3.8 million on revenue of $14.3 million.

There’s doesn’t seem to be much need or desire to start swinging the cost-cutting axe at ICM, in other words. Jobs appear safe.

“This isn’t a business in any way that is in need of restructuring,” Hall said.

He added that he has no plans to ditch Afilias as back-end registry provider for the four gTLDs. MMX’s default back-end for the years since it ditched its self-hosted infrastructure has been Nominet.

The deal reduces MMX’s exposure to the volatile Chinese market, where its .vip TLD has proved popular, accounting for over half of the registry’s domains under management.

It also gives MMX ownership of ICM’s potentially lucrative portfolio of reserved premium names.

There are over 9,700 of these, with a combined buy-now price of just shy of $135 million.

I asked Hall whether he had any plans to get these names sold. He laughed, said “the answer is yes”, and declined to elaborate.

ICM currently has a sales staff of three people, he said.

“It’s a small team, but their track record is exceptional,” he said.

The company’s record, I believe, is sex.xxx, which sold for $3 million. It has many six-figure sales on record. Premiums renew at standard reg fee, around $60.

With the ICM deal, MMX has recast itself after a year of uncertainty as an acquirer rather than an acquisition target.

While many observers — including yours truly — had assumed a sale or merger were on the cards, MMX has gone the other route instead.

It’s secured a $3 million line of credit from its current largest shareholder, London and Capital Asset Management Ltd, “to support future innovation and acquisition orientated activity”.

That’s not a hell of a lot of money to run around snapping up rival gTLDs, but Hall said that it showed that investors are supportive of MMX’s new strategy.

So does this mean MMX is going to start devouring failing gTLDs for peanuts? Not necessarily, but Hall wouldn’t rule anything out.

“Our long-term strategy is ultimately based around being an annuity-based business,” he said. He’s looking at companies with a “strong recurring revenue model”.

About 78% of ICM’s revenue last year came from domain renewals. The remainder was premium sales. For MMX, renewal revenue doubled to $4.8 million in 2017, but that’s still only a third of its overall revenue (though MMX is of course a less-mature business).

So while Hall refused to rule out looking at buying up “struggling” gTLDs, I get the impression he’s not particularly interested in taking risks on unproven strings.

“You can never say never to any opportunity,” he said. “If we come across and asset and for whatever reason we believe we can monetize it, it could become an acquisition target.”

The acquisition is dependent on ICANN approving the handover of registry contracts, something that doesn’t usually present a problem in this kind of M&A.