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The two biggest registrars knock it out of the park in Q2

Kevin Murphy, August 11, 2020, Domain Registrars

GoDaddy and Tucows, the industry’s two largest registrars, both last week posted very strong second-quarter results due to the beneficial impact of the coronavirus lockdown.

Market-leader GoDaddy in particular seems to have knocked it out of the park, adding a ridiculous 400,000 net new customers during the April-June period, the strongest quarterly performance in the company’s 20-year history.

The company reported domains revenue of $369.6 million, up 10.5% on the year-ago quarter, its strongest-performing segment.

Tucows, meanwhile, reported domains revenue essentially flat at $60 million, but pointed to registration growth as an indicator of its showing.

Tucows CEO Eliot Noss said in prerecorded remarks that new registrations from its reseller channel were up 41% in the quarter, with overall wholesale registrations up 7% to 4.3 million.

In the retail channel, domains under management was up 9% year-over-year to 400,000, with new registrations up more than 20%.

The CEOs of both companies were unambiguous that the coronavirus pandemic could take credit for their results. Noss said:

As expected, in Q2 we saw the full effects of the pandemic that we began to experience toward the end of Q1, with businesses globally moving quickly online, and displaced workers turning to entrepreneurship as the next stage in their career paths. A large proportion of that new registration activity was those resellers who focus on helping small and micro-sized businesses and start-ups establish a web presence for the first time.

GoDaddy CEO Aman Bhutani characterized the virus as a catalyst for businesses stubbornly remaining offline to finally get a web presence, telling analysts:

COVID-19 has pushed a number of people past the point of inertia where they were not adopting digital… because people have no choice but to go digital to support their businesses, we’re seeing people experimenting with ideas. We’re seeing people come online, even though they had hesitated to do it in the past.

Overall, GoDaddy reported revenue up 9.4% at $806.4 million. Its net loss was $673.2 million, due mostly to a one-time tax-related payment.

Tucows overall revenue was $82.1 million, down from $84.1 million, largely due to the drag factor of its recently restructured Ting Mobile business. Net income was $157,000, down from $2.6 million.

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Domain industry had best April ever under lockdown

Kevin Murphy, August 10, 2020, Domain Registries

The domain industry had its best April ever in terms of new domains sold in gTLDs, according to my tally, despite much of the Western world spending the month in coronavirus lockdown.

There were a total of 5,291,077 domain adds in April, across all 1,253 gTLDs currently filing transaction reports with ICANN.

That’s up almost 100,000 on the 5,191,880 adds in April 2019 and the best April since the first new gTLDs started coming into circulation in 2013.

20205,291,077
20195,191,880
20185,062,852
2O175,031772
20164,314,305
20153,847,510
20143,809,862
20133,584,271

While a measly 100k jump may be less impressive than expected based on the enthusiastic descriptions of the lockdown bump coming from registries and registrars over the last few months, it makes a bit more sense when you factor out Chinese volume success story .icu.

.icu, currently the largest of the new gTLDs, was having a bit of a growth spurt at the start of 2019, and added 267,287 domains in April last year. That was down to 56,714 this April. The TLD has been declining for the last few months.

Looking at the TLDs that seem most obviously related to lockdown, the standout is .bar, which added 26,175 names this April, compared to just 151 a year ago.

It’s been well-reported that many restaurants and bars affected by coronavirus switched to online ordering and home delivery, and .bar appears to be a strong beneficiary of this trend.

.bar currently has more than 100,000 names in its zone file, roughly double its pre-lockdown level.

.com fared well, adding 3,382,029 domains this April, compared to 3,360,238 in the year-ago period.

But .xyz did better, relatively, adding 256,271 names, compared to 200,003 a year earlier.

Also noteworthy was .buzz, which has been performing very strongly over the last 12 months. It added 60,808 names this April, compared to just a few hundred.

This table shows the 20 gTLDs with the most adds in April 2020, with their April 2019 numbers for comparison.

TLDApril 2020 AddsApril 2019 Adds
com3,382,0293,360,238
xyz256,271200,003
net233,449195,328
org184,209145,394
online132,09265,244
site96,61790,224
info96,546121,980
top89,965138,425
buzz60,808669
icu56,714267,287
club56,12757,335
shop40,38867,337
website32,55317,000
store31,59915,424
live28,82322,620
page27,5662,457
space26,70621,749
bar26,175141
link24,5683,852

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.bible-thumping anti-porn registrar goes titsup

Kevin Murphy, August 5, 2020, Domain Registrars

An American registrar that prided itself on promoting .bible domain names and refusing to sell to pornographers has gone out of business.

PurityNames, which called itself “the only company that refuses to profit from pornography”, ceased operations July 27 and has had its accreditation agreement with ICANN voluntarily terminated.

In a notice on its web site, the company blamed its demise on “recent increases in regulatory requirements and costs as well as economic headwinds”.

Founded by seasoned ICANN policy expert Jim Prendergast, the company’s shutdown appears to have been handled the right way.

PurityNames’ small customer base has been transferred to 20-year-old Israeli registrar Domain The Net, and pre-paid hosting packages will be honored, according to the registrar.

The company was founded in 2011 in order to give registrants a “family-friendly” venue for registering names. It refused to deal with not only porn but also gambling and other “immoral” services.

It also actively promoted .bible domain names. Prendergast is an ICANN policy consultant for the .bible registry.

But apparently there was not much demand for either. As of March, PurityNames had 288 domain names under management, down from a 2015 peak of 536, and only 10 .bible registrations.

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The pricey, complex, clusterfuck plan to reopen Whois

Kevin Murphy, August 3, 2020, Domain Policy

After a little more than two years, an ICANN working group has finalized the policy that could allow people to start accessing unredacted Whois records again.

Despite the turnaround time being relatively fast by ICANN standards, the Expedited Policy Development Process group has delivered what could be the most lengthy and complex set of policy recommendations I’ve seen since the policy work on new gTLDs over a decade ago.

Don’t get too excited if you’re itching to get your hands on Whois data once more. It’s a 171-page document containing over a hundred recommendations that’s bound to take ages to implement in full, if it even gets approved in the coming weeks.

I’d be surprised if it’s up and running fully before 2022 at the earliest. If and when the system does eventually come online, don’t expect to get it for free.

It’s already being slammed in multiple quarters, with one constituency saying it could result in a “multi-year-implementation resulting in a system which would effectively be a glorified, overly complex and very expensive ticketing system”.

Trademark owners are livid, saying the proposed policy completely fails to address their needs, and merely entrenches the current system of registrar discretion into formal ICANN policy.

The recommendations describe a proposed system called SSAD, for System for Standardized Access/Disclosure, which would be overseen by ICANN and enforced through its contracts with registries and registrars.

It’s a multi-tiered system involving a few primary functions, wrapped in about a thousand miles of red tape.

First and foremost, you’ve got the Central Gateway Manager. This would either be ICANN, or a company to which ICANN outsources. Either way, ICANN would be responsible for overseeing the function.

The gateway manager’s job is to act as a middleman, accepting Whois data requests from accredited users and forwarding them to registries and registrars for processing.

In order to access the gateway, you’d need to be accredited by an Accreditation Authority. Again, this might be ICANN itself or (more likely) a contractor.

The policy recommendations only envisage one such authority, but it could rely on a multitude of Identity Providers, entities that would be responsible for storing the credentials of users.

It’s possible all of these roles and functions could be bundled up in-house at ICANN, but it appears the far more likely scenario is that there will be a bunch of RFPs coming down the pike for hungry contractors later this year.

But who gets to get accredited?

Anyone with a “legitimate interest or other lawful basis”, it seems. The document is far from prescriptive or proscriptive when it comes to describing possible users.

But the recommendations do give special privileges to governments and government-affiliated entities such as law enforcement, consumer protection bodies and data privacy watchdogs.

For law enforcement agencies, the proposed policy would mandate fully automated processing at the gateway and at the registry/registrar. It sounds like cops would get pretty much instant access to all the Whois data they need.

Requests just the for city field of the record would also be fully automated, for any accredited requestor.

There would be at least three priorities of Whois request under the proposed system.

The first, “Urgent”, would be limited to situations that “pose an imminent threat to life, serious bodily injury, critical infrastructure (online and offline) or child exploitation”. Non-cops could use this method too. Contracted parties would have one business day or three calendar days to respond.

The second would be limited to ICANN-related procedures like UDRP and URS, and registrars would have a maximum of two business days to respond.

The third would encapsulate all other requests, with some priority given to fraud or malware-related requests. Response times here could be a long as 10 days.

I’m trying to keep it simple here, but a lot of the recommendations describe the aforementioned red tape surrounding each stage of the process.

Registrars and registries would be bound to service level agreements, there’d be appeals processes for rejected requests, there’d be logging, audits, reporting, methods to de-accredit users and methods for them to appeal their de-accreditation… basically a shedload of checks and balances.

And who’s going to pay for it all?

ICANN’s latest guesstimate is that SSAD will cost $9 million to build and another $8.9 million annually to operate.

It seems the main burden will be placed on the shoulders of the end-user requestors, which will certainly have to pay for accreditation (which would have to be renewed periodically) and may have to pay per-query too.

Trademark lawyers within the ICANN community are furious about this — not because they have to pay, but because SSAD functionality does “not come close to justifying the costs”.

They’d envisaged a system that would be increasingly automated as time went by, eventually enabling something pretty much like the old way of doing Whois lookups, but say the current proposals preclude that.

It’s also not impossible that the system could lead to higher fees for registrants.

The EPDP group is adamant that domain registrants should not have to pay directly when somebody queries their Whois data, and says the SSAD should be cheaper to run for registrars than the current largely manual system, but acknowledges there’s nothing ICANN can do to stop registrars raising their prices as a result of the proposed policy.

The recommendations say that ICANN should not take a profit from SSAD, but do not discount its contractors from making a fair return from their work.

Prices are, like much else described in this Final Report, still very much TBD. The EPDP working group was given a lot to accomplish in very little time, and there’s a lot of buck-passing going on.

And there’s no guarantee that the policy will even be approved in the short term, given the level of dissent from working group participants.

Before the recommendations become formal Consensus Policy — and therefore binding on all registries and registrars — they first have to be approved by the GNSO Council and then the ICANN board of directors.

The first opportunity for the GNSO Council to vote is at its meeting September 24, but it could be a very tight vote.

For an EPDP to pass, it needs a supermajority vote of the Council, which means a two-thirds majority of both “houses” — the Contracted Parties House (ie, registries and registrars) and the Non-Contracted Parties house — or a 75% approval in one house and a simple majority in the other.

The way things stand, it looks to me like the CPH will very likely vote 100% in favor of the proposal, which means that only seven out of the 13 NCPH members will have to vote in favor of the report in order for it to pass.

The NCPH is made up of six people from the Non-Commercial Stakeholders Group, which generally hold pro-privacy views and have already criticized the report as not going far enough to protect registrants’ data.

Six more NCPH members comprise two members each from the Intellectual Property Constituency, Business Constituency and Internet Service Providers Constituency.

The IPC and BC put their names to a joint minority statement in the Final Report saying that its recommendations:

amount to little more than affirmation of the [pre-EPDP] status quo: the elements of WHOIS data necessary to identify the owners and users of domain names are largely inaccessible to individuals and entities that serve legitimate public and private interests.

I’m chalking those four Council members down as reliable “no” votes, but they’ll need the support of the two ISP guys and the wildcard Nominating Committee appointee in order to bury this policy proposal.

If it does pass the Council, the next and final stage of approval for SSAD would be the ICANN board, probably at ICANN 69 in October.

But then ICANN would actually have to build the damn thing.

This would take many months of implementation and review, then there’d have to be multiple RFP processes to select the companies to write the software and build the infrastructure to run it, who’d then actually have to build and test it.

In the same guesstimate that put a $9 million price tag on the system, ICANN reckoned that it would take a full year for a third party to build and test SSAD. That’s not even taking registrar integration into account.

So, if you’re looking for streamlined Whois access again, you’d best think 2022 at the very earliest, if ever.

If you wish to read the EPDP working group’s Final Report, you can do so here (pdf).

UPDATE: This article originally misstated the date of the next GNSO Council meeting at which this proposal could be considered. It’s not August 20. It’s September 24, which means initial ICANN board consideration is out in October. Add another month to whatever timeline you were hoping for.

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Tucows sells off Ting business, retreats into the back-end

Kevin Murphy, August 3, 2020, Domain Registrars

Tucows has sold its Ting Mobile brand and customer based to DISH Network, repositioning itself as a provider of white-label back-end mobile services.

The company which is also the second-largest domain registrar, has found success in recent years as a mobile virtual network operator (MVNO) with Ting. Following the DISH deal, it will become a mobile services enabler, or MSE.

It’s basically a move away from providing customer-facing mobile services. Instead, it will provide the back-end technology platform, and DISH is its first customer.

CEO Elliot Noss said in a prerecorded statement:

We still get asked about the connective tissue between Domains and the mobile business, and it all boils down to our competence in billing, provisioning, and customer service for underserved technology markets.

He added that Tucows has been approached by other potential MSE partners over the years.

DISH gets to use the Ting brand for two years, with an option to acquire it at the end. Tucows will continue to offer Ting wired broadband services, but will change its name if DISH exercises the buyout option.

All Ting mobile customers have been handed over to DISH as of Saturday, but no money has changed hands up-front. Instead, Tucows expects to see increased margins over time from the cost savings and monthly fees DISH will pay it. It will also be paid for transitioning the business over to DISH.

Tucows expects the deal to be “neutral to slightly negative” to its 2020 earnings.

DISH is primarily a satellite television provider, but it entered the mobile market a month ago with the acquisition of Boost Mobile.

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No .sex please, we’re infected!

MMX saw poorer-than-expected sales of porn-related defensive registrations in the first half of the year, the only blip in what was otherwise a strong period for the company.

The registry updated the market today to say that its domain name base grew by 31% year over year during the half, ending June with 2.38 million names under management. It only grew by 19% in the same period last year.

Billings for H1 were up 7% at $7.9 million, MMX said.

But because the mix shifted away from one-off brokered sales, which are registered on the earnings report as a lump sum, and towards regular automated registrations, which are recognized over the lifetime of the reg, MMX expects to report revenue 5% down on last year.

While that’s all fair enough, the company said that it didn’t sell as many defensive blocks in .xxx, .sex, .porn and .adult as it had expected, which it blamed on coronavirus:

Management also notes that expected H1 channel sales from the Company’s brand protection activity were held back due to the impact of COVID-19, but anticipates those brand protection initiatives that were delayed in Q2 will resume in H2.

It’s a reference to the AdultBlock and AdultBlock Plus services launched last year, which enable trademark owners to block (and not use) their marks in all four adult TLDs for about $350 to $800 a year.

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Domainers immune from the lockdown bump?

Kevin Murphy, July 30, 2020, Domain Sales

While the can be little doubt that the domain industry saw a boost in the second quarter due to the impact of coronavirus lockdown mandates, the same may not be true for those playing in the secondary market.

Data out from Escrow.com last night shows the weakest quarter for secondary market sales since the company started publishing its data two years ago, with average prices and overall sales volume down.

The company, which acts as a trusted intermediary for domain transfers, said it processed $55.2 million of sales in Q2, down from $85.8 million in the first quarter.

All of the primary geographical markets saw a decline apart from Hong Kong, with the US suffering the worst dip.

The US obviously has taken the biggest dose of the virus and has little in the way of a social safety net, so it’s perhaps not surprising that buyers are being more cautious with their cash.

The declines fly in the face of data and commentary from the primary market, where registries and registrars have generally been seeing unexpected boosts to sales as lockdown-impacted small businesses rush online.t

It’s tempting to speculate that while the virus has created more customers for domain names, fears over the incoming recessions have made buyers less likely to want to splash out on a premium domain.

Escrow.com said that the median price of a domain name without associated content dropped from $3,000 to $2,500 in the quarter.

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Drop auctions not a slam-dunk, says Nominet

Nominet has responded to criticism of its plans to introduce registry-level .uk drop auctions by saying it’s not about money-grabbing and is not guaranteed to even happen.

Registry MD Eleanor Bradley today blogged:

In some quarters the commentary suggests the driver for change is financial, or to make life more difficult for some business models. It is not.

As commercial gain was not our objective, we have suggested that any additional funds raised by changing the policy would be directed towards public benefit activity or used to provide specific services to registrars. Indeed, how to best spend additional funds that result from any policy change is part of the consultation.

The consultation referred to here was launched earlier this month. It suggests replacing the current drop-catching system, in which Nominet suspects some members “collude” to pool their EPP connections, with one of two new processes.

One would be a straightforward auction of desirable dropping names. The other would be to charge drop-catchers up to £6,000 a year for extra concurrent registry connections.

Bradley wrote that “the assumption in some quarters that an auction approach is our preferred option — a fait accompli –- are wide of the mark”.

As I’m one of the people who reported that auctions were Nominet’s “apparently preferred” option, I’ll note that my take was based on the company’s own consultation document, which scores auctions more highly than the alternative on a five-point scale of its own devising.

And a preferred option is not the same as a fait accompli, of course.

The consultation is open for a couple more weeks. A group of disgruntled members plan to petition the board to retain the status quo at its AGM in September.

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After Chapter 11 filing, JCPenney dumps its dot-brand

American retailer JCPenney has told ICANN it no longer wishes to own its dot-brand gTLD, .jcp.

The notice was filed just a month after the company entered Chapter 11 bankruptcy protection and announced the permanent closure of hundreds of stores.

Like many retailers of non-essential goods, the company’s fortunes have been badly affected by the coronavirus pandemic.

I suspect the gTLD would have been scrapped eventually regardless — JCPenney never used it, and even the obligatory nic.jcp site merely redirects to the company’s primary .com.

It’s the 80th dot-brand to be dumped by its registry. the 11th this year.

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Israeli registrar denies “arms dealer” claims

Israeli registrar GalComm has denied being involved in a widespread malware distribution scheme after being fingered by a security outfit.

Last month Awake Security accused the registrar, officially Communigal Communication Ltd, of being “at best complicit in malicious activity”.

The firm published a report entitled “The Internet’s New Arms Dealers: Malicious Domain Registrars” which linked GalComm to a network of malicious Chrome browser extensions the firm said can steal sensitive data from users who have them installed.

It identified 111 such plug-ins, which it said have been downloaded 33 million times, using over 15,000 domains registered via GalComm.

GalComm has around 48,000 domains registered in gTLDs at the last count, so that’s a sizable percentage of the registrar’s business.

Awake came to the conclusion that GalComm was well-aware of what its customers were up to.

Now, the registrar has sent a cease-and-desist notice to Awake, CC’d to ICANN (pdf), in which it denies all knowledge and responsibility for the malware.

GalComm’s line, to summarize, is that it’s just a registrar, and that it has no obligation to monitor how its customers use their domains.

It adds that the domains in question amount to 10% of its DUM. Still a pretty big chunk.

The company wants Awake to retract its report by today, which it has not yet done, or it will call in the lawyers.

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