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Selling off PIR, did ISOC just throw .org registrants under a bus?

Kevin Murphy, November 13, 2019, Domain Registries

Public Interest Registry is to lose its not-for-profit status, dramatically increasing the chances of .org price increases, under an acquisition deal announced this evening.

The Internet Society is selling PIR to a brand-new private investment firm called Ethos Capital Investors, which is run by two people with ties to the domain industry.

PIR CEO Jon Nevett told DI today that the company is no longer a non-profit following the transaction, and that ISOC will no longer receive a slice of every .org registration fee.

There’s a lot to unpick here.

The biggest concern is arguably that the deal substantially increases risk for .org registrants.

PIR was recently, and very controversially, granted the right to raise its prices from $9.93 per year to whatever-the-hell-it-wants per year, due to a renegotiation of its ICANN contract that scrapped its longstanding 10%-per-year price increase caps.

Many domain investors and non-profits called for the caps to remain. Uncontrolled pricing could lead to smaller charities, for example, being priced out of their decades-held domains, it was claimed.

But PIR repeatedly assured concerned registrants that it was “a mission driven non-profit registry and currently has no specific plans for any price changes”.

That tune has changed, if only a little, today. Nevett told us:

Our goal has always been to make .ORG accessible and reasonably priced — and that will continue under our new ownership. PIR has made reasonable decisions on price in the past, and we will uphold this spirit going forward. We would never make dramatic price increases as we know it would harm our registrants, as well as our registrars.

PIR also says it plans to establish an advisory council and fund to ensure its founding principles are upheld, and to apply for “B Corporation” certification.

B Corp is a private program run by a non-profit called B Lab that certifies companies that meet certain social, environmental and transparency standards, but it has no legal recognition in, for example, the US tax code.

Nevett told us today that he does not know how long ISOC was negotiating the sale, but that neither PIR nor ICANN knew of it during their contract talks.

We know very little about the new owner. Its web site, which appears to have been created very recently, merely provides bios of its two principals.

These are founder and CEO Erik Brooks, who this year quit the private equity firm Abry Partners after 20 years.

Abry, you may recall, is the company that hired former ICANN CEO Fadi Chehade in 2016 and gobbled up new gTLD registry Donuts in September last year.

His second is Nora Abusitta-Ouri, named as “chief purpose officer”, who’s apparently tasked with overseeing the moral “ethos” of the company’s investments.

Abusitta-Ouri is a former ICANN staffer who most recently held the role of senior VP for development and public responsibility programs until her 2016 departure. She’s also executive director of the Digital Ethos Foundation.

In short, based on what little information is publicly available, it appears that Ethos was set up purely for the purpose of acquiring PIR. It’s not at all clear where the money to fund the deal is coming from.

The acquisition price has not been disclosed, but given that PIR was grossing over $90 million a year at the last count, I doubt Brooks and Abusitta-Ouri are paying out of their own pockets.

Whoever’s backing this is going to want a return, and the best way to quickly soup up PIR’s growth would be to take advantage of its newfound ability to raise .org prices arbitrarily.

More than half of PIR’s revenue before today — close to $50 million a year — was handed directly to ISOC, to fund its capacity-building and education projects worldwide.

That’s all over now, which begs the question of how it will continue to fund itself in future. My guess is that, now that it has hundreds of millions of dollars in the bank, and is talking about an “endowment”, it’s going to stash its windfall in high-interest accounts and live off that income.

Meanwhile, whatever assurances .org registrants had that PIR was going to remain a non-profit concern have been utterly trashed.

UPDATE: Thanks to domain lawyer John Berryhill for pointing out in the comments that the domain name ethoscapital.org was registered by Abry’s Fadi Chehadé on May 7 this year. Additionally, a commenter on Domain Name Wire tonight noted that a company called Ethos Capital LLC was formed in Delaware on May 14, a day after ICANN published its summary of the .org contract renewal’s public comment period.

Nevett lands at PIR

Kevin Murphy, December 6, 2018, Domain Registries

Donuts alumnus Jon Nevett has been named the new CEO of Public Interest Registry.

Non-profit PIR, which runs .org and related gTLDs, said he will start in the role December 17.

Nevett was most recently executive VP at Donuts, the new gTLD registry he co-founded.

He left Donuts in October, not long after he cashed out when the company was sold to private equity firm Abry Partners.

The PIR corner office had been empty since May, after the unexpected and still unexplained resignation of Brian Cute.

Jay Daley, a member of the board of directors, was filling the role on an interim basis, but told us definitively in September that he was not interested in taking over permanently.

Did Chehade really quit ICANN for this?

Kevin Murphy, August 17, 2015, Domain Policy

ICANN CEO Fadi Chehade will become a senior adviser with a private equity firm after he leaves ICANN next March.

He blogged today that he will take the role with Boston-based ABRY Partners and “provide guidance to ABRY’s partners and their companies’ leaders on digital strategy”.

Chehade, back in June, had described the ICANN CEO role as a “better job that I’ve ever had, or will ever have”.

He had years left on his contract.

My first thought is: really? This is the gig you quit ICANN for?

I’m drawn down the path of thinking that rather than finding the job of his dreams elsewhere, the dude is just suffering from ICANN burnout.

Chehade suggests in his post that ABRY is not a full-time job, writing: “I expect to add other roles to my portfolio and will update you all as appropriate.”

ABRY, at first glance, does not appear to have any significant connection to the domain name industry or to ICANN itself.