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Donuts to pay $213 million for Rightside

Donuts is to acquire Rightside for $213 million, the companies have just announced.

The $10.60 per share cash offer represents a 12% premium over Rightside’s average closing share price over the last 30 days. Rightside’s 52-week high is over $12.

Just one year ago, Donuts offered $70 million for Rightside’s portfolio of gTLDs, but was shot down.

Rightside also turned down a $5 million offer for four gTLDs from in April 2016.

The $213 million offer is funded at least partly by Silicon Valley Bank, which is providing a credit facility to Donuts.

Assuming the deal closes — which will require the holders of more than half its shares to agree to the price — it will make Rightside a private company once more, as a wholly owned Donuts subsidiary.

The two gTLD registries are already partners, with Rightside providing domain registry services for Donuts’ roughly 200 new gTLDs.

There was talk of a split last year, with Donuts apparent endorsement of Google’s Nomulus platform, but the two companies reaffirmed their relationship earlier this year.

Rightside itself has a portfolio of 40 gTLDs, but it’s faced criticism from shareholders over the last year or so over their relatively poor performance.

Activist investor J Carlo Cannell, who owns almost 9% of Rightside, has been pressuring the company’s board to take radical action for the last 15 months.

Earlier this year, Rightside got out of the once-core wholesale registrar game by selling eNom to rival Tucows for $83.5 million. in takeover talks – report is in talks to be acquired by private equity firms, according to a report.

Reuters reported last night that the registrar said the talks were “early stage” and that there was no guarantee of a deal. is of course home to Network Solutions, and is involved in secondary market plays SnapNames and NameJet.

The company had 2016 revenue of $710 million and a market capitalization prior to the report of $1.1 billion. Its shares surged on the news.

Key-Systems buys reseller EDC

Key-Systems has acquired one of its resellers, European Domain Centre.

The acquiring registrar did not disclose the terms of the deal, but said EDC will help boost its own BrandShelter corporate registrar business.

EDC says it has clients including AirBnB, Campari, Lycamobile, iStockPhoto and BusinessWire.

The company was founded in 2003 by Nikolaj Borge and Christopher Hofman Laursen and is based in Copenhagen, Denmark.

Its selling point has been its willingness to offer offer its customers the broadest range of gTLD and ccTLD options.

It’s been a customer of RRPproxy, Key-Systems’ reseller network, since 2008.

As it’s been using the Key-Systems IANA number all this time, it’s not possible to get an accurate figure for its domains under management from ICANN reports.

XYZ acquires .storage, its 10th gTLD said today that it has acquired the half-launched new gTLD .storage from its original owner.

The terms of the deal were not disclosed, but CEO Daniel Negari said in a blog post that it has been funded using some of the “excess of cash flow” from sales of .xyz domains.

The original .storage registry was Extra Space Storage, which rents out physical storage units in the US.

It started its protracted launch period a little over a year ago but had not planned to go to general availability until July this year.

Having apparently passed through its sunrise period and a special landrush for the storage industry, which ended in January, it has fewer than 800 domains in its zone file.

It looks like XYZ will be essentially relaunching the gTLD from scratch, with a new sunrise period penciled in for November and an early access period and GA slated for December.

Pre-launch pricing is around the $80 mark at the few registrars I checked today, and it looks like that will remain under the new management.

That’s despite XYZ talking today about .storage as a “premium” vertically-focused TLD along the lines of its $3,000 .cars or $750 .theatre.

The company said that it will not hold back reserved names at higher, premium pricing. Even nice-looking domains such as will be available at the base fee, it said.

The new acquisition becomes the 10th that XYZ has a hand in running, if you count the three car-related gTLDs it manages in a joint venture with Uniregistry. The others are .security, .rent, .protection, .theatre, and .college.

Activist investor says eNom was sold too cheap

Kevin Murphy, February 20, 2017, Domain Registries

J Carlo Cannell, the activist investor who has been circling Rightside for the last year or so, was unimpressed with the company’s recent sale of eNom to Tucows.

In a letter published as a Securities and Exchange Commission filing last week, Cannell announced that he has started up a support group for fellow “concerned” investors.

In the distinctly loveless Valentine’s Day missive, Cannell called for Rightside to be acquired, go private or issue a big dividend to investors, and said he intends to campaign to have the board of directors replaced.

On the eNom sale, Cannell wrote that the $76.7 million deal “marks a step in the right direction” for the company, but that he was “not satisfied” with the price or the $4 million legal fees accrued. He wrote:

Conversations with management suggest that the Company took only two months to evaluate and close the transaction. Perhaps if they had been more patient and diligent, shareholders would have enjoyed more than the 0.5x 2016 revenues which they received in this “shotgun sale”.

This price was a fraction of Tucows’ own valuation of 2.6x 2016 estimated revenue. For the two trading sessions following the eNom transaction, NAME traded up 10% while TCX was up 32%, suggesting that investors believe it was a better deal for TCX shareholders than NAME shareholders.

The deal was described at the time by Tucows’ CEO Elliot Noss as an “individual opportunistic transaction”.

Noss later told analysts that the eNom business was floundering, “a flat, potentially even slightly negative-growth business”.

Cannell said last week he has formed Save NAME Group, named after Rightside’s ticker symbol, as a means to exert pressure on the board.

He said it is currently “difficult to justify” the company remaining publicly listed, and that the “sale of the entire company” or a “special and substantial dividend” could help appease shareholders.

He said Rightside agreed last August to let him name a new director, but has dragged its feet approving his suggestion, adding:

SNG intends to become more active and vocal in its efforts to force change at NAME. SNG has compiled a slate of qualified candidates. The names and identity of these candidates shall be disclosed periodically together with other neutral and reliable facts to support the contention of SNG that some or all of the board of NAME needs to be replaced.

Cannell, who owns about 9% of Rightside, first emerged as a critic of the company a year ago.

At that time, he called for the company to ditch its “garbage” new gTLD registries in favor of a focus on its higher-margin eNom business.

He was supported by Uniregistry CEO Frank Schilling, then also a Rightside investor in addition to a competitor.