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MMX profitable as acquisition talks drag on

Kevin Murphy, January 29, 2018, Domain Registries

New gTLD registry Minds + Machines became profitable as an operating company for the first time in 2017, the company announced on Friday.

MMX saw billings of $10 million in the second half of the year, compared to $5.6 million in the first half, as domains under management grew 67% to 1.32 million.

Billings is a measure of sales, rather than the more formal measure of revenue for accounting purposes.

Renewals accounted for $5.6 million of billings in the year, which “for the first-time has exceeded fixed operating costs which have been reduced to below $5.5 million for 2017”.

The company’s bottom line will also boosted by $2.1 million due to MMX losing the .inc and .llc new gTLD auctions.

MMX also provided an update on its “strategic review”, a code word for the “acquisition by or sale/merger of the Company” that it announced last May.

The company said “the longevity of the discussions has been at times frustrating” but that it hopes to have something to announce by the time it reports its formal 2017 results in April.

MMX had originally hoped to have concluded these talks before last September.

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Emojis coming to another ccTLD

Kevin Murphy, January 24, 2018, Domain Registries

dotFM is to make emoji domain names available in the .fm ccTLD it manages.

The company said today that it’s currently taking expressions of interest in ‘premium’ emoji inventory, and that such domains will be registerable at an unspecified point in future.

It’s published a list of single-emoji domains it plans to sell.

Emoji domains “will be available based on Unicode Consortium Emoji Version 5.0 standards using single code point; and allowing a mix of letters and emoji characters under the top-level .FM, as well as the dotRadio extensions, .RADIO.fm and .RADIO.am”, dotFM said.

Very few TLDs allow emojis to be registered today.

The most prominent is .ws, which is Western Samoa’s ccTLD, marketed as an abbreviation for “web site”.

.fm is the ccTLD for Micronesia, but dotFM markets it to radio stations.

As ccTLDs, they’re not subject to ICANN rules that essentially ban them contractually in gTLDs.

Emojis use the same encoding as internationalized domain names, but do not feature in the IDN standards because they’re not used in real spoken languages.

Emoji domains are usually considered not entirely practical due to the inconsistent ways they can be rendered by applications.

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Donuts releases free TLD-neutral name-spinner

Kevin Murphy, January 24, 2018, Domain Services

Donuts has announced the release of a free name-spinner tool for registrars and resellers.

Relevant Name Search, found at rns.domains, isn’t a destination site in itself, but will be free for registrars to integrate into their storefronts.

The company said it’s been in beta testing with eNom, Dreamhost, Dynadot and Name.com, with eNom using it for over a year.

The service recalls something similar released by Verisign.

However, unlike the Verisign NameStudio tool, Donuts said RNS is “registry-neutral”, meaning it’s not designed to plug its own portfolio of TLDs over those from other registries.

I subjected the service to a quick, non-scientific test today and found the results much more semantically relevant than the Verisign tool, which only returns .com, .net and .cc results.

When I used NameStudio in November to search for “vodka”, my best offering was dogvodka.com. With RNS, I was offered the likes of vodka.bar, vodka.rocks, vodka.party, vodka.social and vodka.trade (all of which appear to carry premium pricing).

While Verisign offered me funattorney.com on a search for “attorney”, Donuts offered up attorney.lawyer, attorney.lgbt and attorney.blog.

RNS does not ignore legacy gTLDs, however. Doing a search for something a little more niche will bring up .com and .net domains, appropriately (in my view) ranked.

Search for “birmingham taxi” and you’ll get three relevant .limo domains (yeah, .limo exists, apparently) before birminghamtaxi.net.

Similarly, if you want to open up a pizza place in Cardiff, search for “cardiff pizza” and you’ll get offered cardiff.pizza, cardiffpizza.menu, cardiffpizza.restaurant, cardiffpizza.cafe and cardiffpizza.delivery before you get to cardiffpizza.com.

Many domain investors would say that the .com is unarguably the superior domain (it’s also unregistered and non-premium), but even those people would have to admit that the five more prominent suggestions have more semantic relevance.

Donuts said that RNS is configurable to take into account TLD-specific promotions, geography and marketing campaigns, and that it can be integrated with a single API call.

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New gTLD revenue cut by HALF in ICANN budget

Kevin Murphy, January 22, 2018, Domain Policy

The new gTLD industry is performing terribly when compared to ICANN’s predictions just six months ago.

ICANN budget documents published over the weekend show that by one measure new gTLDs are doing just 51% of the business ICANN thought they would.

The new budget (pdf) shows that for the fiscal year 2018, which ends June 30, ICANN currently expects to receive $4.6 million in registry transaction fees.

These are the fees registries must pay for each new registration, renewal or transfer, when the TLD has more than 50,000 domains under management.

In a draft budget (pdf) published March 2017, its “best estimate” for these fees in FY18 was $8.9 million, almost double its newest prediction.

That prediction lasted until the approved budget (pdf) published last August.

The budget published at the weekend expects this transaction revenue to increase 31.1% to $6 million by June 30, 2019, still a long way off last year’s estimate.

At the registrar level, where registrars pay a transaction fee regardless of the size of the customer’s chosen gTLD, ICANN expects new gTLD revenue to be $3.9 million in FY18.

That’s just 52% of its March/August 2017 estimate of $7.5 million.

Looking at all reportable transactions — including the non-billable ones — ICANN’s projection for FY18 is now 21.9 million, compared to its earlier estimate of 41.7 million.

ICANN even reckons the number of new, 2012-round gTLDs actually live on the internet is going to shrink.

Its latest budget assumes 1,228 delegated TLDs by the end of June this year, which appears to be a couple light on current levels (at least according to me) and down from the 1,240 it expected a year ago.

It expects there to be 1,231 by the end of June 2019, which is even lower than it expected have in June 2017.

I suspect this is related to dot-brands cancelling their contracts, rather than retail gTLDs going dark.

Revenue from fixed registry fees for FY18 is expected to be $30.6 million, $200,00 less than previous expectations. Those numbers are for all gTLDs, old and new.

Overall, the view of new gTLDs is not pretty, when judged by what ICANN expected.

It shows that ICANN is to an extent captive to the whims of a fickle market that has in recent years been driven by penny deals and Chinese speculation.

By contrast, legacy gTLDs (.com, .info, etc) are running slightly ahead of earlier projections.

ICANN now expects legacy registry transaction fees of $48.6 million for FY18, which is $200,000 more than predicted last year.

It expects registrar transaction fees of $29.5 million, compared to its earlier forecast of $29.4 million.

This is not enough to recoup the missing new gTLD money, of course, which is why ICANN is slashing $5 million from its budget.

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ICANN slashes millions from its budget

Kevin Murphy, January 22, 2018, Domain Policy

ICANN has cut $5 million from its annual budget, warning the community that difficult decisions have to be made amid a slowing domain name market.

Staff and community members will all be affected by the cuts, whether in the form of less generous pay raises or fewer travel opportunities.

Cuts have also been proposed to international outreach, tech support, contractual compliance and translation services.

The organization at the weekend published for comment its proposed budget for fiscal 2019. That’s the year that begins July 1, 2018.

It would see ICANN spend $138 million, $5 million less than it expects to spend in fiscal 2018.

Four of the five top-line areas ICANN reports expenses will be cut for a total of $12 million in savings, while one of them — personnel — is going up by $7.3 million.

This rounds out to a $5 million cut to the total FY19 ICANN budget. Here’s the breakdown:

  • Personnel costs going up from $69.5 million to $76.8 million, up $7.3 million.
  • Travel and meetings costs are to go down from $17.8 million to $15.6 million, a $2.2 million saving.
  • Professional services costs will go down from $27.7 million to $23.4 million, a $4.3 million saving.
  • Administration and capital costs will go down from $22.5 million to $17.8 million, a $4.7 million saving.
  • The contingency budget is going down from $5.3 million to $4.5 million, a $800,000 saving.

Personnel costs are going up due to a combination of new hires and pay rises, but the average annual pay rise will be halved from 4% to 2%, saving $1.3 million, ICANN documentation states.

Headcount is expected to level out at about 425, up from the current 400, by the end of FY19.

The travel budget is going down due to a combination of cuts to services provided at the three annual meetings and the number of people ICANN reimburses for going to them.

The Fellows program — sometimes criticized for giving people what look like free vacations for little measurable return — is seeing the biggest headcount cut here. ICANN will only pay for 30 Fellows to go its meetings in FY19, half the level of FY18. The Next Gen program, a similar outreach program for yoof participants, goes down to 15 people from 20.

The Governmental Advisory Committee will get its number of funded seats reduced by 10 to 40. The ALAC and the ccNSO also each lose a few seats. Other constituencies are unaffected.

At the meetings themselves, translation is to be scaled back to be provided on an as-requested basis, rather than automatically translating everything into all six UN languages. Key sessions will continue to have live interpretation.

Outside of the three main meetings, ICANN is pulling back on plans to expand its irregular “capacity building” workshops in “under-served” areas of the world.

It’s also slashing the “additional budget request” budget by 50%.

In terms of compliance, a proposed Technical Compliance Monitoring system that was going to be built this year — a way to make sure gTLD registries and registrars are stable and secure — appears to be at risk of being deprioritized.

ICANN said it “will develop an implementation plan in due time, depending on the RFP results and, if needed, work with the Board to identify necessary resources and funds to support implementation of the project.”

The documents published today are now open for public comment until March 8.

The cuts I’ve reported here can be found from page 19 of this document (pdf).

The reason for the cutbacks is that ICANN’s revenue isn’t growing as fast as it once did, due to the slower than expected growth of the domain name industry in general. I’ll get to that a later article.

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