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M+M turns profit on the back of gTLD auctions

Kevin Murphy, September 24, 2014, Domain Services

Minds + Machines posted an operating profit of almost £3 million ($4.9 million) for the first half of the year, almost entirely driven by the proceeds of losing new gTLD auctions.

The registry record a profit to June 30 of £2.9 million on revenue of $68,000.

The “profit on gTLD auctions” line item that permitted that seemingly impossible profit number was £7.1 million ($11.6 million), based on M+M losing eight out of 12 private auctions.

The company had £22 million ($36 million) in cash and other current assets on its balance sheet at the end of the period.

None of M+M’s big TLDs had launched in the first half, hence the low revenue. Since the half ended, .london has proven successful and several more new gTLDs wholly or partially owned by M+M have also launched.

In his statement to the market, chair Fred Krueger said:

A key variable in our financial position is the dynamic of private auctions, which we have embraced, and which has worked tremendously to our advantage. We believe that our current still contested strings represent significant assets which we have the potential to monetize either to further our existing new TLDs or to purchase additional new TLDs at auction.

He also reiterated CEO Antony Van Couvering’s call for a new metric to track gTLD registry health that is based on revenue-per-domain rather than simple volumes.

His outlook for new gTLDs was arguably less cautious than his counterpart at CentralNic, which reported its half-year numbers yesterday and talked of demand “falling short of industry expectations”.

Krueger said:

Name registration data available to-date indicates a strong opening for a variety of new products/domains, and also shows that we are still very early in the adoption curve for new TLDs. We expect that the growth of almost all new TLDs will likely follow an “S curve”, as it historically has for newly launched TLDs, rather than a straight line.

He also reconfirmed that M+M plans to aggressively pursue its new integrated registrar business as a means to drive growth in its gTLDs, rather than simply relying on the channel.

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.ooo sales targets are batshit crazy

Kevin Murphy, September 23, 2014, Domain Registries

New gTLD registry and e-commerce network Infibeam, which is taking its .ooo TLD to sunrise today, has been bandying around some truly wacky registration predictions in the Indian press today.

The company’s founder told one local paper, the The Hindu’s BusinessLine, that .ooo will have volumes that dwarf .xyz and a literally impossible number of sunrise registrations.

I’m not going to link to the article itself because the BusinessLine website, probably via an embedded ad, tried to download malware onto my machine. The headline is “Infibeam to offer ‘.ooo’ for ‘.com-savvy’ netizens” if you want to Google it.

Here’s an extract, however, which quotes Infibeam founder Vishal Mehta:

The company is targeting 35,000-40,000 trademark registered companies along with several SMEs.

“The new GTLD is the first of a kind initiative by any e-commerce company. Over the next 6-12 months we expect to get about 1-2 million domain registrations under .ooo,” Mehta told BusinessLine.

This is nuts for at least two reasons.

First, Infibeam seems to be expecting 35,000 to 40,000 sunrise registrations.

That’s impossible.

The .ooo sunrise period starts today, when there’s just shy of 33,000 trademarks listed in the Trademark Clearinghouse.

A TMCH listing is of course required to buy a name at sunrise, so even if every mark in the TMCH converted to a .ooo name — which they won’t — the TLD still couldn’t hit the bottom end of its projection.

In reality, .ooo will be lucky to hit 500 sunrise registrations, just like every other gTLD this year.

Second, the only way Infibeam is going to get one to two million registered domains in six to 12 months is if the company not only gives them away for free, but actually forces them upon registrants without their consent.

The registry with the most number of registrations to date is .xyz, which has about 517,000 domains in its zone file today. It’s managed that feat in three and a half months largely by giving the names away for free to its registrars’ customers whether they want them or not.

Conceivably, Infibeam could do the same with .ooo, but that wouldn’t be especially helpful to its application commitment to make the gTLD “synonymous with trust and consumer choice”.

Indeed, its application talks exclusively about offering .ooo names to existing Infibeam customers.

Could the company leverage its BuildaBazaar e-commerce network to create quickly a substantial base of registrations?

It web site talks of a “billion dreams” and a “billion stores” and its .ooo gTLD application states: “Our goal is nothing less than providing a billion stores for a billion people.”

According to the application, Infibeam will try to persuade its BuildaBazaar customers to upgrade to a premium package that includes a .ooo domain name for their stores.

All Infibeam would need to do would be to convert 0.1% of its billion-strong BuildaBazaar customer base to .ooo domain names and it could hit one million registrations almost overnight.

That would assume that BuildaBazaar has a billion stores, of course. It doesn’t. It has 20,000 stores.

So where are the “1-2 million domain registrations” over the “next 6-12 months” going to come from?

Beats me.

I hope for Mehta’s sake that he was misquoted because otherwise I suspect he’s going to be very disappointed very quickly.

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Multiple live gTLDs will be auctioned in October

Kevin Murphy, September 23, 2014, Domain Registries

Exactly 11 months after the first new gTLDs were delegated to the DNS root, DI has learned that a batch of live gTLDs are heading to auction for the first time.

There’s now officially an aftermarket for top-level domains.

“Multiple” delegated 2012-round new gTLDs will be auctioned off next month, with the exact date yet to be finalized, according to a reliable source.

The venue will be Applicant Auction, which has been helping applicants resolve gTLD contention sets via private auction for the last year.

The auction is understood to be invitation-only and the identities of the gTLDs up for grabs, and their associated registries, are a closely-guarded secret.

What conclusions we can come to will rather depend on which gTLDs are being sold.

If they’re gTLDs that are already in general availability, and perhaps have suffered worse-than-expected sales, it probably wouldn’t look very good for the new gTLD program.

But if they’re pre-launch strings belonging to portfolio applicants that have always looked like obvious investment vehicles, the optics might not be as damaging.

We’ll have to wait and see. If the auctions are successful, at some point over the next couple of months we can expect to see one or more new gTLDs change hands.

It won’t be the first time a gTLD has been bought — successful applicants from earlier rounds have been acquired by larger competitors — but it will be the first time a delegated new gTLD has been auctioned off when it’s still basically an unproven asset rather than a full-blown business.

It could be the first example of “domaining” with TLDs.

In this round, NCC Group bought .trust — an uncontested application with no ICANN contract — from Deutshe Post in February, while Rightside has acquired some TLDs from Donuts under a pre-existing deal.

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Comcast users report name collision bugs

Kevin Murphy, September 23, 2014, Domain Tech

US cable ISP Comcast has become the latest company to experience problems caused by name collisions with new gTLDs.

In this case the gTLD in question is .network, which Donuts had delegated at the end of August.

Users of Comcast’s Xfinity service have been complaining about various issues linked to collisions ever since.

It turns out some Xfinity hubs use the domain home.network on residential networks and that this default configuration choice was not corrected by Comcast before .network went live.

The collision doesn’t appear to be causing widespread internet access issues — Xfinity has close to 20 million users so we’d have heard about it if the problems were ubiquitous — some things appear to be failing.

I’ve seen multiple reports of users unable to access storage devices on their local networks, of being unable to run the popular TeamSpeak conferencing software used by gamers, problems with installing RubyGems, and errors when attempting to use remote desktop tools.

Judging by logs published by affected users, Donuts has been returning the domain “your-dns-needs-immediate-attention.network” and the IP address 127.0.53.53.

Anyone Googling for 127.0.53.53 — the IP address selected to ICANN’s “controlled interruption” name collision management plan — will currently find this ad:

Cyrus Namazi, vice president of DNS industry engagement at ICANN, confirmed to DI that ICANN has received multiple reports of issues on Comcast residential networks and that ICANN has been in touch with the ISP.

Comcast is working on a permanent fix, he said.

Namazi said that ICANN has not received any complaints from users of other ISPs. Most collision-related complaints have been filed by residential users rather than companies, he said.

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Donuts snatches four new gTLDs at auction, beating Amazon to .video

Kevin Murphy, September 23, 2014, Domain Registries

Donuts has emerged the victor from four new gTLD auctions this week, getting its hands on .money, .video, .sale and .legal.

Notably, Uniregistry, Minds + Machines and Amazon have withdrawn from the .video race, leaving Donuts the winner.

.video was one of the gTLDs Amazon had originally applied for as a “closed generic” that it intended to keep for itself and its affiliates. Now, it will be an open generic under Donuts.

Donuts also won .sale against Uniregistry, Dot-Sale and Famous Four.

Minds + Machines withdrew its .sale application in April 2013, before even Initial Evaluation.

Colombian applicant Primer Nivel, affiliated with My.co, withdrew its application for .legal, leaving Donuts the only remaining bidder, while Famous Four dropped out of the two-horse race for .money.

Meanwhile, dotCOOL has pulled its bid for .memorial, leaving applications from Afilias and Donuts still active. Presumably, one of these will withdraw later in the week.

As usual, winning bids have not been revealed.

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