Minds + Machines is to get out of the registrar and back-end registry services markets in separate deals with Nominet and Uniregistry.
The cost-saving shake-up will lead to about 10 job losses, or about 25% to 30% of its current headcount, CEO Toby Hall told DI this morning.
Under the Nominet deal, M+M will outsource the back-end registry functions for 28 new gTLDs, currently managed in-house, to the .uk ccTLD manager.
The deal covers all the gTLDs for which M+M is the contracted party (such as .law, .cooking and .fashion), as well as the four it runs in partnership (eg .london) and the five where it currently acts as back-end for a third party registry (eg .broadway).
The company also plans to dump its “unprofitable” registrar entirely, migrating its existing customers to Uniregistry’s Uniregistrar business.
About 49,000 domains will be affected by this move, Hall said.
Uniregistry will pay M+M a commission over the lifetime of the accounts.
Focusing on the registry business was the plan from the moment Hall took over M+M, following a shareholder coup that kicked out founding CEO Antony Van Couvering in January.
Hall told DI:
It [previously] had a very ambitious plan. It wanted to be vertically integrated, but the considered view is there are people out there who are far better able to run parts of the exercise than ourselves, both on the RSP piece and likewise the registrar piece. The strategy from day one was to rapidly evolve into becoming a business-to-business marketing-led registry business and radically overhauling our cost structure at the same time.
The company is currently in a financial quiet period and will not yet disclose the amount of savings it expects to reap, Hall said. He added:
Reducing cost isn’t a strategy for growth, and as a business that will be where we will be judged. Growing our portfolio, growing our domains under management, growing our revenue within those domains. That’s what the business has to be focused on. We see within the industry that the highest value is in the [TLD] ownership part.
The job losses are expected to be largely on the technical side of the house.
The RSP outsourcing means that Nominet significantly boosts its stable of managed TLDs. While it’s in the top five back-ends in terms of DUM (due to the 11 million in .uk) its portfolio of clients there is relatively small, largely limited to a handful of dot-brands.
Nominet CEO Russell Haworth said in a statement:
This partnership takes us into the top tier of registry operators globally by volume of TLDs and compliments the brands we currently manage, such as .BBC, .Bentley and .Comcast. It also underlines our long-term strategy to provide a more diversified range of services to gTLDs and registrars.”
With the Uniregistry registrar deal, Hall said that competing with its own channel “was just not right for us”.
It might be worth noting that Uniregistry is actually a vertically integrated triple-play along the lines of M+M, also, managing its own back-end, registry and registrar businesses.
Hall said that the M+M registrar had sold mainly to domain investors with little interest in buying value-added services such as email and hosting, which is often where much of the profit lies.
Both deals are subject to ICANN approvals, and client approval in case of the back-end transition, will be phased in over many months, and are expected to be finalized by the end of the year.
UPDATE: M+M said later this morning that it is changing its official company domain to mmx.co from mindsandmachines.com.
US presidential wannabe Sen. Ted Cruz has sent ICANN’s chair another nasty letter, demanding to know why he hasn’t yet responded to a laundry list of questions about former CEO Fadi Chehade’s relationship with the Chinese government.
The letter, also signed by fellow Republican senators Mike Lee and James Lankford, expresses “dismay” over the lack of response from Steve Crocker.
Cruz et al have been posing awkward questions to ICANN’s top brass since it emerged in December that Chehade had taken an unpaid position on an internet governance advisory committee run by China.
The senators say they’re worried that the US relinquishing its oversight of the IANA functions will give governments with poor freedom of expression records too much control over the internet.
A more likely explanation is that the IANA transition is an Obama initiative, and if Obama single-handedly saved a bunch of kids from a burning orphanage Cruz & Co would blame him for contributing to over-population.
That’s more or less the sentiment Chehade expressed at ICANN 55 last month, when he said:
And you know that this [Cruz] letter is not driven by anyone really worried about the transition. This is someone really worried about politics. So let’s not bring politics into the transition… Let’s resist bringing the politics of our lovely capital into this process… I think everyone knows this is political, even those in his own party… We will answer all these questions… And we will respond to the questions fully, to the Senators’ full satisfaction.
The new letter calls Chehade out for this statement, saying he “disparaged” what they call an “oversight request”.
An actual Congressional oversight hearing, focusing on the transition, a couple of weeks ago had absolutely no fireworks whatsoever.
It seems that the Republican-led committee actually responsible for internet matters, which does not include Cruz as a member, isn’t particularly upset about the IANA transition.
Nevertheless, the new Cruz letter re-poses a whole list of questions about Chehade’s involvement in China and Crocker and the ICANN board’s response to it.
The questions were originally asked March 3. ICANN had evidently said it would respond by March 18 but has not.
Cruz’s hand in the Republican primaries against front-runner Donald Trump has been strengthened in recent days, increasing the possibility that he could become US president next January.
Rightside is to run a promotion that will discount renewals on premium names down to .com prices.
From May 16 to June 30, if you buy any of the domains that Rightside has marked as premium — except the super-premium “Platinum” names — the wholesale renewal fee will be just $10.
Registrars will mark this up according to their own pricing models.
Normally, the price you pay at the checkout is the price you pay every year after that.
The deal is overtly targeted at domainers.
Rightside said: “At these reduced prices, you’ll have more time to find the right buyer for any domains you register, and incur lower fees to transfer to them once you do. If you’re looking to add high-quality domains to your portfolio, this will be the time to do it.”
The reduced renewals only apply to names registered during the six-week window, but they do pass on to subsequent registrants if the domain is sold.
Rightside is calling it a “first-of-its-kind” promo, but in reality it’s just a temporary regression to the once-standard industry model.
Remember, prior to the 2012-round gTLDs, only exceptions like .tv charged premium rates for renewals.
Premium renewals are now very commonplace, but are by no means the rule, in the new gTLD industry.
For Rightside, the offer means the company may experience a brief cash windfall as domainers, who generally hate premium renewals, take a chance on the registry’s names.
There’s also a potential marketing benefit to be gained from having more domainers on board as unpaid salespeople.
But it does rather suggest the premiums are not flying off the shelves at the rate Rightside wants.
The company recently disclosed that in the first few months of the year it made revenue of $674,610 selling 1,820 premium names, leading to an average price of $372. Twelve five-figure names had been sold.
Over its portfolio of 39 gTLDs, Rightside has flagged over 964,000 as premium, or about 25,000 per TLD.
ICANN has announced that sandwiches have been banned from the forthcoming ICANN 56 public meeting in Helsinki.
The move has been made in response to recent controversies over the availability of “inappropriate” foodstuffs during coffee and lunch breaks at the thrice-yearly policy meetings.
“The board has listened, and the board has acted decisively in response to community concerns,” ICANN chair Steve Crocker said at a packed press conference today.
“Starting with ICANN 56, our meeting venues will be sandwich-free zones,” he said.
ICANN has had to take on new caterers to supply non-sandwich-based refreshments and will incur a one-time early termination fee of $242,000, according to its contract with its former supplier.
“It’s a small price to pay to make sure we only provide appropriate snacks for our valued stakeholders,” he said.
DI has obtained a copy of the proposed Helsinki menu, which has been approved as “100% fine” by ICANN’s board and Ombudsman, as well as the legal and compliance departments and external auditors.
You can read it here (pdf).
The unexpected sandwich ban surprised many community leaders.
“The ICANN board is totally missing the point here,” said GNSO chair James Bladel. “The PBJ-WG clearly and unanimously recommended that the prohibition should only apply to cheese sandwiches.”
“It’s just another example of top-down, unilateral regulation,” he said.
Critics noted that, due to pressure from the French government, the ban does not apply to filled baguettes.
But Crocker denied government meddling had created a loophole, noting that all baked goods containing fillings comprising over 32% dairy-based solids would still be captured by the ban.
“Naturally, we couldn’t ban all baguettes,” he said. “That would be a ludicrous thing to do.”
He advised all ICANN 56 delegates to show up early to sessions in order to speed up the new mandatory sandwich-screening bag checks.
More than 20 companies want to take over the back-end registry for the .org gTLD, according to Public Interest Registry.
PIR put the contract, currently held by Afilias, up for bidding with a formal Request For Information in February.
It’s believed to be worth north of $33 million to Afilias per year.
PIR told DI today that it “received more than 20 responses to its RFI for back-end providers from organisations representing 15 countries.”
That represents a substantial chunk of the back-end market, but there are only a handful of registry service providers currently handling zones as big as .org.
.org has about 11 million names under management. Only .com, .net and a few ccTLDs (Germany, China and the UK spring to mind) have zones the same size or larger.
PIR said it would not be making any specific details about the bidders available.
The non-profit says it plans to award the contract by the end of the year.