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.xxx has its ICANN fees slashed and adopts URS

Kevin Murphy, February 8, 2017, Domain Registries

ICM Registry is to see its .xxx ICANN registry fees hugely reduced in contractual amendments approved by ICANN last week.

The changes also mean that .xxx will now become subject to the Uniform Rapid Suspension anti-cybersquatting mechanism, despite it being a pre-2012 gTLD.

.xxx becomes the latest pre-2012 gTLD to move to a contract more closely aligned with the standard Registry Agreement from the new gTLD program.

Under the complex new deal, its per-transaction fee could be reduced from $2 to $0.25 by mid-2018.

Its quarterly fixed fee will go up from $2,500 to $6,250.

ICM has also agreed to take on many aspects of the standard new gTLD Registry Agreement, the most controversial of which is the URS.

The domainer group the Internet Commerce Association was fiercely critical of this addition to the contract, as it has been when URS was brought to .jobs, .travel, .cat, .pro and .mobi.

ICA is largely concerned that URS will also be pushed upon Verisign’s .net, which is up for contract renewal this year, and eventually .com.

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ICANN’s Empowered Community to get its first test-drive after appeals panel vote

Kevin Murphy, February 8, 2017, Domain Policy

ICANN’s post-transition bylaws have only been in effect for a few months, but the board of directors wants to change one of them already.

The board last week voted to create a new committee dedicated to handling Requests for Reconsideration — formal appeals against ICANN decisions.

But because this would change a so-called Fundamental Bylaw, ICANN’s new Empowered Community mechanism will have to be triggered.

The Board Governance Committee, noting that the number of RfR complaints it’s having to deal with has sharply increased due to fights over control of new gTLDs, wants that responsibility split out to be handled by a new, dedicated Board Accountability Mechanisms Committee.

It seems on the face of it like a fairly non-controversial change — RfRs will merely be dealt with by a different set of ICANN directors.

However, it will require a change to one of the Fundamental Bylaws — bylaws considered so important they need a much higher threshold to approve.

This means the untested Empowered Community (which I’m not even sure actually exists yet) is going to get its first outing.

The EC is an ad hoc non-profit organization meant to give ICANN the community (that is, you) ultimate authority over ICANN the organization.

It has the power to kick out directors, spill the entire board, reject bylaws changes and approve Fundamental Bylaws changes.

It comprises four or five “Decisional Participants” — GNSO, the ccNSO, the ALAC, the ASO and (usually) the GAC.

In this case at least three of the five Decisional Participants must approve the change, and no more than one may object.

The lengthy process for the EC approving the proposed bylaws change is outlined here.

I wouldn’t expect this proposal to generate a lot of heated discussion on its merits, but it will put the newly untethered ICANN to the test for the first time, which could highlight process weaknesses that could be important when more important policy changes need community scrutiny.

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Tucows says eNom may be shrinking as Melbourne IT drives 2016 growth

Kevin Murphy, February 8, 2017, Domain Registrars

Tucows yesterday reported an 11% increase in revenue for 2016, driven partly by an acquisition, but warned that its more recent acquisition, eNom, may be shrinking.

The company reported revenue for 2016 of $189.8 million, up from $171 million in 2015. Net income was up 41% at $16 million.

For the fourth quarter, revenue was up 9% year-on-year at $48.8 million. Net income was down 9% at $2.8 million.

In a conference call, executives linked some of the growth to the April 2016 acquisition of Melbourne IT’s reseller business, which added 1.6 million domains to Tucows’ DUM.

While Tucows also operates its Ting mobile phone service, the majority of its revenue still comes from domains and related services.

In the fourth quarter, revenue was $30 million for this segment. Of that, $23.1 million came from domains sold via its wholesale network and $3.8 million came from Hover, its retail channel.

CEO Elliot Noss noted that the acquisition of the eNom wholesale registrar business from Rightside last month made Tucows easily the second-largest registrar after GoDaddy, but made eNom sound like a neglected business.

“The eNom business is a flat, potentially even slightly negative-growth business in terms of gross margin dollars,” he told analysts.

eNom’s channel skews more towards European and North American web hosting companies, which are a growth challenge, he said. He added:

We acquired a mature retail business and associated customers which for the past few years has been more about maintaining and servicing eNom’s existing customers as opposed to growth. It has not been actively promoted and as a result has a flat to declining trajectory. It’s something we don’t intend to change in the short-term, but as we look under the hood and get a better sense of the platform as we will with all of the operations, the long-term plan might be different.

The acquisition was “overwhelmingly about generating scale and realizing cost efficiencies”, Noss said.

Tucows paid $83.5 million for eNom, which has about $155 million in annual revenue and is expected to generate about $20 million in EBITDA per year after efficiencies are realized.

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Donuts sticks with Rightside despite Google support

Kevin Murphy, February 8, 2017, Domain Registries

Donuts has renewed its back-end registry services contract with Rightside, Rightside has announced.

That’s despite indications a few months ago that it might have been preparing for a switch to Google’s new Nomulus platform.

Rightside said yesterday that the deal, which has seen Rightside handle the registry for Donuts’ portfolio of almost 200 gTLDs for the last five years, has been extended.

It’s a “multi-year” deal, but the length of the extension has not been revealed.

Donuts had suggested last October that it might be ready to move to Nomulus instead.

The company revealed then that it had been quietly working with Google for 20 months on the software, which uses Google’s cloud services and is priced based on resource usage.

Then-CEO Paul Stahura said Nomulus “provides Donuts with an alternative back-end with significant benefits.”

Now-CEO Bruce Jaffe said yesterday that “Rightside’s registry platform has the right combination of innovative features, ease-of-operation, scalability, and highly responsive customer support”.

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GoDaddy Super Bowl ad results “best ever”

Kevin Murphy, February 6, 2017, Domain Registrars

GoDaddy said its Super Bowl commercial, which aired yesterday, resulted in its “best ever” Sunday for new customers.

The company said in a press release it had seen its “its best-ever Sunday for attracting new customers in the books”.

That doesn’t necessarily mean it sold more domains than its previous Super Bowl efforts, nor that it made more money.

It seems the web site builder service GoCentral, which is currently offered with a free trial period, accounted for “about half” of these new customers.

GoCentral was the subject of the ad, in which the abstract concept of “The Internet” is embodied as an irritating hipster. It can be viewed here:

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