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This latest Chinese bubble could deflate ccTLD growth

With many ccTLD operators recently reporting stagnant growth or shrinkage, one registry has performed stunningly well over the last year. Sadly, it bears the hallmarks of another speculative bubble originating in China.

Verisign’s latest Domain Name Industry Brief reported that ccTLDs, excluding the never-shrinking anomaly that is .tk, increased by 1.4 million domains in the first quarter of the year.

But it turns out about 1.2 million of those net new domains came from just one TLD: Taiwan’s .tw, operated by TWNIC.

Looking at the annual growth numbers, the DNIB reports that ccTLDs globally grew by 7.8 million names between the ends of March 2018 and March 2019.

But it also turns out that quite a lot of that — over five million names — also came from .tw.

Since August 2018, .tw has netted 5.8 million new registrations, ending May with 6.5 million names.

It’s come from basically nowhere to become the fifth-largest ccTLD by volume, or fourth if you exclude .tk, per the DNIB.

History tells us that when TLDs experience such huge, unprecedented growth spurts, it’s usually due to lowering prices or liberalizing registration policies.

In this case, it’s a bit of both. But mostly pricing.

TWNIC has made it much easier to get approved to sell .tw names if you’re already an ICANN-accredited registrar.

But it’s primarily a steep price cut that TWNIC briefly introduced last August that is behind huge uptick in sales.

Registry CEO Kenny Huang confirmed to DI that the pricing promo is behind the growth.

For about a month, registrants could obtain a one-year Latin or Chinese IDN .tw name for NTD 50 (about $1.50), a whopping 95% discount on its usual annual fee (about $30).

As a result, TWNIC added four million names in August and September, according to registry stats. The vast majority were Latin-script names.

According to China domain market experts Allegravita, and confirmed by Archive.org, one Taiwanese registrar was offering free .tw domains for a day whenever a Chinese Taipei athlete won a gold medal during the Asian Games, which ran over August and September. They wound up winning 17 golds.

Huang said that the majority of the regs came from mainland Chinese registrants.

History shows that big growth spurts like this inevitably lead to big declines a year or two later, in the “junk drop”. It’s not unusual for a registry to lose 90%+ of its free or cheap domains after the promotional first year is over.

Huang confirmed that he’s expecting .tw registrations to drop in the fourth quarter.

It seems likely that later this year we’re very likely going to see the impact of the .tw junk drop on ccTLD volumes overall, which are already perilously close to flat.

Speculative bubbles from China have in recent years contributed to wobbly performance from the new gTLD sector and even to .com itself.

.icu gets China nod as it tops 900,000 regs

Chinese regulators have approved .icu for sale and use in China, according to the registry.

ShortDot COO Kevin Kopas told DI today that the Ministry of Industry and Information Technology has approved its year-old gTLD for mainland use.

The company plans to launch .icu there formally June 12, he said.

Kopas also said that .icu has recently topped 900,000 registrations.

It’s a remarkable growth achievement for a gTLD with barely a year on the clock, given that SpamHaus stats show that its level of spam abuse is still comparable to .com.

But with prices at around $1.50 at its largest registrars and very little semantic value, one has to assume that a lot of its registrations are speculative. Its first junk drop could be brutal.

MIIT approval may help it continue its growth trend. To date, China-based registrars have recorded no .icu sales.

Dot-brand .bond has been acquired and will relaunch as a generic this July

The domain name’s Bond, dot Bond… or something.

Sorry.

ShortDot, the registry behind the .icu top-level domain, has acquired a dot-brand gTLD and plans to repurpose it as a generic.

The seller is Bond University, a newish, smallish university in Queensland, Australia, and the gTLD is .bond.

ShortDot co-founder Kevin Kopas confirmed the deal to DI tonight, and said the new owner hopes .bond will prove attractive to bail bondsmen, offerers of financial bonds and, yes, fans of the James Bond franchise.

There’s also the dictionary meaning of “bonding” with somebody in a familial, friendly or business sense.

A new Bond movie is due to come out next April, so .bond might pick up a few regs then, assuming the registry is careful not to too closely associate itself with the heavily-guarded IP.

Kopas said that the current plan is to launch a 60-day sunrise period July 9 this year. ShortDot is currently working on unbranding the TLD within its ICANN contract, to allow it to sell to an unrestricted audience.

Premium domains will be offered with premium renewal fees.

ShortDot also plans to move away from Neustar’s back-end to CentralNic.

Bond University never actually used its TLD, which would have been a single-registrant space for its own exclusive use. It’s been dormant since its 2014 delegation, with just a single placeholder domain in its zone file.

There are plenty of those. About 50 owners of unused dot-brands have chosen to terminate their ICANN contracts and simply fizzle away to nothing.

But a small handful of others have chosen to instead sell their contracts to registries that think they can make a bit of money marketing them as generic strings.

The most obvious example of this to date would be .monster, which XYZ.com recently relaunched as a quirky open generic after the jobs site Monster.com decided it didn’t need a dot-brand after all. It’s been on sale for about a month and has about 1,750 names in its zone file.

The first example, I believe, was .observer, which Top Level Spectrum acquired from the Observer newspaper in 2016. That TLD went on sale two years ago but has fewer than 1,000 domains under management today.

Kopas said that the plan is to sell .bond names for between $5 and $10 wholesale.

“Overall the goal of ShortDot is to offer domains that are affordable for end users and profitable for registrars,” he said.

It’s only the company’s second TLD. The first was .icu, which it bought from One.com (which hadn’t really used it) and relaunched in May 2018.

Since then, it’s grown extremely rapidly and is currently the eighth-largest new gTLD by zone file volume.

It had over 765,000 domains in its zone today, up from basically nothing a year ago, no doubt largely due to its incredibly low prices.

Before AlpNames died, it was selling .icu names to Chinese customers for the yuan equivalent of just $0.50.

Today, the domain is available from NameCheap and NameSilo, its two largest registrars, for about $1.50.

Remarkably, spam fighters haven’t highlighted much to be concerned about in .icu yet.

The TLD has a 6.4% “badness” rating with SpamHaus, roughly the same as the similarly sized MMX offering .vip, which is also popular in China, and lower than .com itself.

Compare to .loan, which has a bit over a million names and which SpamHaus gives a 28.7% “bad” score.

In other words, .icu seems to be doing very well, volume-wise, without yet attracting huge amounts of abuse.

It’s a neat trick, if you can pull it off. But is the success repeatable? I guess we’ll find out with .bond when it launches.

“Stringent” new online censorship law could affect domain companies

Kevin Murphy, April 8, 2019, Domain Policy

Blame Zuck.

The UK government is planning to introduce what it calls “stringent” new laws to tackle abusive behavior online, and there’s a chance it could wind up capturing domain name registries and registrars in its net.

The Department for Culture, Media and Sport this morning published what it calls the Online Harms White Paper, an initial 12-week consultation document that could lead to legislation being drafted at a later date.

The paper calls for the creation of a new independent regulator, charged with overseeing social media companies’ efforts to reduce the availability of content such as incitements to violence, self-harm, suicide, child abuse, “hate crime” and even “fake news”.

It basically would increase the amount of liability that companies have for user-generated content hosted on their services, even when that content is not necessarily illegal but is nevertheless considered “harmful”.

The regulator would have to create a code of conduct for companies the legislation covers to abide by.

When the code is breached, the regulator would have the authority to issue fines — possibly comparable to the 4% of profits that can be fined under GDPR — against not only the companies themselves but also their senior management.

The paper seems to most directly address ongoing tabloid scandals related to Facebook and its ilk, such as the suicide of Molly Russell, a 14-year-old who viewed material related to self-harm on Instagram before her death.

While it does not mention domain names once, the government clearly anticipates casting a wide net. The paper states:

The scope will include companies from a range of sectors, including social media companies, public discussion forums, retailers that allow users to review products online, along with non-profit organisations, file sharing sites and cloud hosting providers.

That’s a broad enough definition such that it could even cover blogs, including this one, that allow users to post comments.

The paper also discusses asking search engines to remove sites from their indexes, and compelling ISPs to block abusive sites as a “last resort” measure.

There’s a short mental hop from ISP blocking to domain name takedowns, in my view.

The paper also discusses steps the regulator could take to ensure companies with no UK legal presence are still covered by the rules.

While the paper, as I say, does not mention the domain name industry once, subsidiary services provided by registrars, such as hosting, could be directly affected.

There’s no guarantee that the paper will become a bill. There’s already a backlash from those who believe it constitutes unacceptable censorship, comparable to regimes such as in China.

There’s also no guarantee such a bill would eventually become law. The UK government is arguably currently the weakest it has ever been, with a propped-up minority in Parliament and many MPs in open revolt over Brexit.

With talk of an early general election incessant recently, it’s also possible the government may not last long enough to bring its plans to fruition.

Still, it’s probably something the domain industry, including ICANN, should probably keep an eye on.

The full 100-page white paper can be found here (pdf) and an executive summary can be read here.

.london disaster leads to mixed 2018 for MMX

New gTLD registry MMX, aka Minds + Machines, suffered a huge net loss in 2018, largely due to its disastrous .london contract, even while its operating fundamentals improved.

For the year, MMX reported a net loss of $12.6 million, compared to a 2017 profits of $3.8 million, on revenue up 5% to $15.1 million.

The loss was almost entirely attributable to charges related to an “onerous contract” with one of its partners.

MMX has never disclosed the identity of this partner, but the only outfit that fits the profile is London & Partners, the agency with which MMX partnered to launch .london several years ago.

The registry, expecting big things from the geo-TLD, promised to pay L&P millions over the term of the contract, which expires in 2021.

But it’s been a bit of a damp squib compared to former management’s expectations, peaking at about 86,000 regs last year and shrinking ever since.

MMX says the estimated gap between the minimum revenue guarantee payable to L&P and the expected revenue is expected to bring in before 2021, is $7.2 million.

It’s recorded this as a charge on its income statement accordingly, along with another $4.2 million impairment charge related to the same contract.

The company recorded a $7.7 million accounting charge related to this contract in 2016, too.

The company says that to date it has lost about $13.7 million on the deal.

These charges, along with a few other smaller one-off expenses, were enough to push the company into the black for 2018.

But other key performance indicators showed more promise, helped along by the acquisition last year of porn-themed registry operator ICM Register, best-known for .xxx.

Notably, renewal revenue almost doubled, up 97% to $9.4 million.

Domains under management was up 37% to 1.81 million.

Operating EBITDA was $3.6 million, up 12.5%.

Looking ahead, MMX said billings for the first quarter are expected to be up 246%, due to the first impact of the ICM acquisition.

It also said it closed $500,000 of sales in .law in China in March. That would work out to over 5,000 domains, based on the retail price of about $100 a year, but those domains have yet to show up in the .law zone file, which only grew by about 200 domains last month.

MMX said it is planning to launch “a high-value defensive registration product” for corporate registrars by the third quarter.

If I had to guess, I’d say that is probably a clone of Donuts’ Domain Protected Marks List service, which offers trademark owners deep discounts when they defensively block strings across the whole Donuts gTLD portfolio.

It’s a model copied by other registries, including recently Uniregistry.

AlpNames could get PAID for abandoning its customers

Kevin Murphy, March 15, 2019, Domain Registrars

So it turns out selling domain names for peanuts to spammers isn’t a viable business model. Who’d have thunk?

As you’ll have no doubt already read elsewhere, ICANN has shut down AlpNames, the deep-discounting registrar with an unenviable reputation for attracting abusive registrants.

But there’s a chance that the company might actually get paid for its customer base, under ICANN rules.

ICANN today terminated AlpNames’ contract, effective immediately, having discovered the “discontinuance of its operations”.

It’s a rare case of ICANN going straight to richly deserved termination, skipping over the breach notice phase.

The former registrar’s web site has been down for the best part of a week, resolving to a Cloudflare error message saying the AlpNames web server is missing its SSL certificate.

But it appears its customers may have been experiencing problems accessing their accounts even earlier.

Judging by ICANN’s termination notice, the organization has had just about as much luck contacting AlpNames management as DI, which is to say: none.

CEO Iain Roache appears to have simply stopped paying attention to the company, for reasons unknown, allowing it to simply fade away.

At least three members of senior staff have left the company over the last several months, with former COO Damon Barnard telling DI he was asked to leave as a cost-cutting measure as Roache attempted to relocate the company from Gibraltar to the UK.

I gather that Roache is also currently tied up in litigation related to the failure of his old registry management business, Famous Four Media, which was removed by gTLD portfolio owner Domain Venture Partners last year.

So what happens now to AlpNames customers?

Fortunately, most of them should suffer only minor inconvenience.

ICANN has initiated its De-Accredited Registrar Transition Procedure, which will see all of AlpNames’ domains forcibly transferred to another registrar.

This often uses the data that registrars are obliged to periodically escrow, but in this case AlpNames uses LogicBoxes as a registrar back-end, so presumably LogicBoxes still has fresh, live data.

AlpNames had 532,941 domain names across all gTLDs on its IANA tag at the last official count, at the end of November. It’s believed to be closer to 700,000 today.

In November, its top two gTLDs were .top and .gdn, which had 280,000 names between them. It had over 19,000 .com names under management

Almost 700,000 names is a big deal, making AlpNames a top 40 registrar, and would make a nice growth spurt for any number of struggling registrars.

The portfolio could be a bit of a poisoned chalice, however, containing as it likely does a great many low-quality and some possibly abusive registrations.

At least one registrar, Epik, has publicly stated its desire to take over these domains, but due to the volume of AlpNames DUM it could be a competitive bidding process between multiple registrars.

Under the ICANN rules (pdf), a “full application process” is generally favored for defunct registrars with over 1,000 domains, when the de-accredited registrar has not named a successor.

The scoring system used to pick a winner has many criteria, but it generally favors larger registrars. They have to show they have the scale to handle the extra technical and customer support load required by the transition, for example.

It also favors registrars with breadth of gTLD coverage. They have to be accredited in all the gTLDs the dead registrar was. AlpNames supported 352 gTLDs and had active domains in 270 of them, according to November’s registry reports.

Language support may be an issue too, in case for example a substantial chunk of AlpNames business came from, say, China.

All applying registrars that score above a certain threshold are considered tied, and the tie-breaker is how much they’re willing to pay for the portfolio.

Unlike gTLD auctions, ICANN does not receive the proceeds of this auction, however. According to the policy (with my emphasis):

This procedure is not intended to create a new form of revenue for ICANN. To the extent payment is received as part of a bulk transfer, ICANN will apply funds against any debt owed by the registrar to ICANN and forward the remaining funds, if any, to the de-accredited registrar.

That’s right, there’s a chance AlpNames might actually get a small windfall, despite essentially abandoning its customers.

Think about it like the government using eminent domain to buy a house it wishes to demolish to make way for a new road. Except the house’s cellar is full of kidnapped children. And it’s on fire.

Of course, this might not happen. ICANN might decide that there’s not enough time to run a full application process without risk to AlpNames’ customers and instead simply award the dead registrar’s portfolio to one of the registrars in its pre-approved pool of gaining registrars.

That choice would be partly based on ICANN judgement and partly on which registrar is next in the round-robin queue of pre-qualified registrars.

Here’s a handy diagram that shows the procedure.

Deaccred

Donuts founder replaces Pitts as MMX’s premium guru

MMX has hired one of Donuts’ recently departed co-founders to market its premium domain name inventory, the company said today.

Dan Schindler, formerly Donuts’ executive VP, has been hired as a “special advisor”, tasked with “monetizing” premiums in the US and Europe.

He appears to be functionally replacing Victor Pitts, who was hired as director of premium sales two years ago. Pitts appears to have left the company in January.

MMX, which counts .vip, .law and .luxe among its stable of 32 gTLDs, expects to report premium sales for 2018 of around $2.3 million.

The company has also hired domain consultant Christa Taylor, founder and CEO of dottba, as its new chief marketing officer, a newly created position.

News of the appointments was released as MMX published another preliminary trading update ahead of its final 2018 financial results next month.

Here are some more nuggets from the announcement:

  • Total domain registrations so far in 2019 up 38% to 1.84 million compared to a year ago.
  • Billings up 129% year-on-year due to contributions from ICM Registry and a 40% increase in sales of .vip and .luxe domains in China.
  • ICM’s porn-themed domains are renewing at 91%.
  • Integration of .luxe into two more blockchain platforms — NameCoin and XAYA — is underway.

MMX expects to announce its full-year results April 3.

Scottish registry dumps the pound over Brexit fears

The .scot gTLD registry has decided to dump the British pound as its currency of choice, due to fears over Brexit.

DotScot’s back-end, CORE, told registrars this week that it will start billing in euros from March 29.

The switch is being made due to “the expected volatility in currency exchange rates between GBP and other main currencies post-Brexit”.

March 29 is currently enshrined in UK law as the date we will formally leave the European Union, though the interminable political machinations at Westminster are making it appear decreasingly unlikely that this date could be extended.

CORE said that the prices for .scot registrations, renewals and transfers will be set at €1.14 for each £1 it currently charges. That’s the average exchange rate over the last 12 months, registrars were told.

.scot is a geographic gTLD, rather than a ccTLD, which was approved in ICANN’s 2012 application round. It has about 11,000 domains under management.

Its largest registrar, 1&1 Ionos (part of Germany’s United Internet), charges £40 a year.

Only 38% of Scots voted in favor of Brexit back in 2016, the lowest of any of the UK’s four nations, with no region of Scotland voting “Leave”.

Naturally, a great many Scots believe they’re being dragged out of the EU kicking and screaming by their ignorant, English-bastard neighbors. Which strikes me as a fair point.

Huge batch of Afilias TLDs approved in China

Kevin Murphy, January 31, 2019, Domain Registries

Seventeen Afilias-operated gTLDs have been approved for use in China.

The Ministry of Industry and Information Technology announced yesterday that the following Afilias-owned TLDs now have its official seal of approval: .archi, .bio, .black, .blue, .green, .lotto, .organic, .pet, .pink, .poker, .promo, .ski, .vote, .voto and .移动 (xn--6frz82g, means “mobile”),

Also approved are .asia and .网站 (.xn--5tzm5g means “website”), which to the best of my knowledge are not owned by Afilias but are quite closely managed by it.

All 17 were approved via the same Shanghai-based Afilias subsidiary, due to MIIT’s local presence requirements.

Chinese approval means Chinese registrants using Chinese registrars will be permitted to have their names resolve in China, subject to the country’s rather stringent censorship practices.

It’s the first batch of Afilias names to get the nod since April 2017, when .info, .pro and .mobi were approved.

.CLUB announces three years of price increases

Kevin Murphy, January 15, 2019, Domain Registries

.CLUB Domains is to increase its wholesale registry fees by $1.90 over the next three years.

The company announced that the increases for .club names will come on July 1 this year, next year, and in 2021.

The current price is $8.05 per domain per year. This will go up to $8.95, then $9.45, then $9.95.

They’re the first price changes .CLUB has implemented, other than discounts, since its launch in 2014.

The gTLD had almost 1.5 million names under management at the last public count, and has about 1.16 million names in its zone file today.

It saw a growth surge in the second half of 2018 due to aggressive discounting in China — with AliBaba selling new names for as little as $0.44 — which led to a corresponding increase in abuse.

.CLUB is a rare example of a private TLD operator that is fairly open about its financials.