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PIR chief: registries should stop stressing about volume

Kevin Murphy, September 11, 2018, Domain Registries

Public Interest Registry has announced some sweeping changes to how it markets .org and its other TLDs, with interim CEO Jay Daley telling DI that there’s too much focus on volumes in the industry today.

PIR is scrapping is volume discount programs after the current batch of incentives expires at the end of the year.

These are the programs that offer rebates to registrars if they hit certain performance targets, all based around newly created domains.

“They particularly favor large registrars, and we don’t think that’s appropriate going forward,” Daley told DI yesterday.

He said that when PIR removed some developed markets from its geographically-targeted discount programs, it saw creates go down but revenue improve.

He suggested that some registries have too much focus on volumes as a benchmark of success, failing to take account of important factors such as renews and abuse rates.

Part of the problem is that success is often measured (by folk including yours truly) by domains under management, rather than TLD health or revenue-per-domain.

“How many people are simply trying to get their numbers up without worrying about the underlying revenue, or taking a very low underlying revenue in order to get their numbers up?” Daley said.

“We’re not in any way somebody who is trying to get our numbers up at all costs, certainly not,” he said.

Another marketing program getting a makeover is pay-per-placement, where PIR would pay for prominent positions in the TLD drop-down menu of registrars storefronts.

These relationships have been based purely on new creates, Daley said, with appropriate “clawback” provisions when registrations turn out to be predominantly abusive.

In future, PIR intends to take a “longer-term, hygiene oriented view” of how its marketing money is used, making better use of data, he said.

“We need to be looking more at the quality of the registrations we get, the level of technical abuse generated by those registrations, looking at the renewal rates that come from those registrations,” he said.

PIR has a new four-strong channel services team that will be leading these changes.

“We are a public interest organization and need to take a public interest view on everything we do,” Daley said. “We need to be looking at our promotions for more than just commercial reasons, we need to be looking at public interest reasons as well.”

Daley, who ran New Zealand’s .nz registry from 2009 until this January, said that the big changes he is overseeing do not reflect an attempt to put his stamp on PIR and take over the CEO office on a permanent basis.

He does not want to run a registry and does not want to relocate to PIR’s headquarters in Virginia, he said.

“I’ve been a registry CEO for nine years,” he said. “I’ve done this and it’s time for me to look at other things.”

He also sits on PIR’s board of directors.

.CLUB sees spam double after China promotion

Kevin Murphy, September 11, 2018, Domain Registries

.CLUB Domains has seen the amount of spam in .club double a month after seeing a huge registration spike prompted by a deep discount deal.

The registry saw its domains under management go up by about 200,000 names over a few days in early August, largely as a result of a promotion at Chinese registrar AliBaba.

AliBaba sold .club domains for CNY 3 ($0.44) during the promotion, helping it overtake GoDaddy as the top .club registrar.

At that time, spam tracker SpamHaus was reporting that 17.9% of the .club domains it was seeing in the wild were being used in spam.

SpamHaus statToday, that number is 35.4%, almost double the August 7 level. SpamHaus does not publish the actual number of spammy domains for .club; that honor is only bestowed upon the top 10 “bad” TLDs.

Correlation does not equal causation, of course. There could be factors other than the AliBaba promotion that contributed to the increase, but I believe there’s probably a link here.

.CLUB chief marketing officer Jeff Sass told DI:

When registrars have domains “on sale”, there is always the chance that low-cost domains will be attractive to abusers. We monitor abuse proactively, and respond promptly to complaints, as well as monitor our registrar partners collectively and individually.

It’s almost certainly unfair of me to single out fluctuations in .club here, rather than take a comparative look at multiple TLDs. There are certainly many worse TLDs per SpamHaus’ statistics — .men leads among the gTLDs, with 87.2% spam.

But, given the industry truism that cheaper domains leads to more abuse, I think such a large increase correlating with such a successful promotion is a useful data point.

Donuts gets bought by former ICANN CEO’s firm

Kevin Murphy, September 5, 2018, Domain Registries

Donuts is to be bought by a private equity firm that has a former ICANN CEO as a partner.

The company, which holds the largest portfolio of new gTLDs, has agreed to be acquired by Boston-based private equity firm Abry Partners for an undisclosed sum.

Not much info about the deal has been released, but one senses an ICANN alum’s hand at the wheel.

Former ICANN chief Fadi Chehade is a partner at Abry, having been initially employed as senior advisor on digital strategy back in 2016 after he left ICANN.

Abry, on its web site, says it focuses its investments on profitable companies, adding:

Depending on the type of fund, we target investments from $20 million to $200 million.

Since Abry’s inception, we’ve developed deep industry expertise in Broadband, Business Services, Communications, Cybersecurity, Healthcare IT, Information Services, Insurance Services, Internet-of-Things, Logistics, Media, and Software as a Service.

Since its formation in 1989, Abry has “completed more than $77 billion of transactions, representing investments in more than 650 properties.”

Donuts was founded by domain veterans Paul Stahura, Jon Nevett, Richard Tindal and Daniel Schindler in order to take advantage of ICANN’s new gTLD program..

It was initially funded by $100 million from Austin Ventures, Adams Street Partners, Emergence Capital Partners, TL Ventures, Generation Partners and Stahurricane.

It currently runs over 200 TLDs, the most populous of which I believe is .ltd, with over 400,000 names.

Donuts is the latest of a series of domain companies to exit via the private equity route, notably following Neustar and Web.com.

Chehade was ICANN’s CEO between 2012 and 2015. While he was not involved in the industry during the new gTLD’s program’s inception, he did oversee its early years.

Afilias finally admits it’s American

Kevin Murphy, August 31, 2018, Domain Registries

Afilias has changed its corporate structure and is now officially based in the United States.

A new holding company, Afilias Inc, has been created in Delaware. It now owns Afilias Plc, the Ireland-based company that has been until now the parent of the Afilias family.

Being “based” in Ireland and doing business primarily in the US was always partly a tax thing, and the company admitted in a press release yesterday that “recent favorable US tax changes” are one of the reasons it’s relocating to the States.

Trump’s tax changes last year reportedly saw corporation tax reduced from 35% to 21%, a steep cut but still a heck of a lot higher than Ireland’s aggressively business-friendly regime.

Other reasons for shift, CEO Hal Lubsen said in a press release, are: “More of the company’s shares are now owned by Americans, and our executive group is increasingly becoming American.”

The company also noted that its biggest partners — Public Interest Registry and GoDaddy — are American.

Afilias’s global HQ is now its office in Horsham, Pennsylvania. It also has offices in Canada, Australia, India and China.

The company told registrars that it does not expect the restructuring to have any impact on its operations.

Afilias sues India to block $12 million Neustar back-end deal

Kevin Murphy, August 27, 2018, Domain Registries

Afilias has sued the Indian government to prevent it awarding the .in ccTLD back-end registry contract to fierce rival Neustar.

The news emerged in local reports over the weekend and appears to be corroborated by published court documents.

According to Moneycontrol, the National Internet Exchange of India plans to award the technical service provider contract to Neustar, after over a decade under Afilias, but Afilias wants the deal blocked.

The contract would also include some 15 current internationalized domain name ccTLDs, with another seven on the way, in addition to .in.

That’s something Afilias reckons Neustar is not technically capable of, according to reports.

Afilias’ lawsuit reportedly alleges that Neustar “has no experience or technical capability to manage and support IDNs in Indian languages and scripts and neither does it claim to have prior experience in Indian languages”.

Neustar runs plenty of IDN TLDs for its dot-brand customers, but none of them appear to be in Indian scripts.

NIXI’s February request for proposals (pdf) contains the requirement: “Support of IDN TLDs in all twenty two scheduled Indian languages and Indian scripts”.

I suppose it’s debatable what this means. Actual, hands-on, operational experience running Indian-script TLDs at scale would be a hell of a requirement to put in an RFP, essentially locking Afilias into the contract for years to come.

Only Verisign and Public Interest Registry currently run delegated gTLDs that use officially recognized Indian scripts, according to my database. And those TLDs — such as Verisign’s .कॉम (the Devanagari .com) — are basically unused.

Neither Neustar nor Afilias have responded to DI’s requests for comment today.

.in has over 2.2 million domains under management, according to NIXI.

Neustar’s Indian subsidiary undercut its rival with a $0.70 per-domain-year offer, $0.40 cheaper than Afilias’ $1.10, according to Moneycontrol.

That would make the deal worth north of $12 million over five years for Afilias and over $7.7 million for Neustar.

One can’t help but be reminded of the two companies’ battle over Australia’s .au, which Afilias sneaked out from under long-time incumbent Neustar late last year.

That handover, the largest in DNS history, was completed relatively smoothly a couple months ago.