Latest news of the domain name industry

Recent Posts

Time for some more ICANN salary porn

Kevin Murphy, June 3, 2019, Domain Policy

ICANN has filed its tax return for its fiscal 2018, so it’s once again that time of the year in which the community gets to salivate over how much its top staffers get paid.

The latest form 990, covering the 12 months to June 30, 2018, shows that the top 21 ICANN employees were compensated to the tune of $10.3 million, an average of $492,718 each.

That’s up about 4% from $9.9 million in the previous year, an average across the top 21 staffers of $474,396 apiece.

These numbers include base salary, bonuses, and benefits such as pension contributions.

Employee compensation overall increased from $60 million to $73.1 million.

The biggest earner was of course CEO Göran Marby, who is now earning more than his immediate predecessor Fadi Chehadé but a bit less than last-but-one boss Rod Beckstrom.

Marby’s total compensation was $936,585, having received a bonus of almost $200,000 during the year. His base salary was $673,133.

The number of staffers receiving six-figure salaries increased from 159 in fiscal 2017 to 183 — about 44% of its estimated end-of-year headcount.

Towards the end of the reported year, as ICANN faced a budget crunch, many members of the ICANN community had called on the organization to rein in its spending on staff.

ICANN says it targets compensation in the 50th to 75th percentile range for the relevant industry.

The top five outside contractors in the year were:

  • Jones Day, ICANN’s go-to law firm. It received $5.4 million, down from $8.7 million in 2017.
  • Zensar Technologies, the IT consultancy that develops and supports ICANN software. It received $3.7 million.
  • IIS, the Swedish ccTLD registry, which does pre-delegation testing for new gTLDs. It received $1.3 million.
  • Iron Mountain, the data escrow provider. It received $1.1 million.
  • Infovity, which provides Oracle software support. It received $1 million.

The return shows that ICANN made a loss of $23.9 million in the year, on revenue that was down from $302.6 million to $136.7 million.

The primary reason for this massive decrease in revenue was the $135 million Verisign paid for the rights to run .web, at an ICANN last-resort auction, in ICANN’s fiscal 2017.

The tax form for 2018 can be found here (pdf) and 2017’s can be found here (pdf).

ICANN budget predicts small new gTLD recovery and slowing legacy growth

Kevin Murphy, December 18, 2018, Domain Services

The new gTLD market will improve very slightly over the next year or so, according to ICANN’s latest budget predictions.

The organization is now forecasting that it will see $5.2 million of funding from new gTLD registry transaction fees in the fiscal year ending June 30, 2019, up from the $5.1 million it predicted when it past the FY19 budget in May.

That’s based on expected transactions being 24 million, compared to the previous estimate of 23.9 million.

It’s the first time ICANN has revised its new gTLD transaction revenue estimates upwards in a couple years.

ICANN is also now estimating that FY20 transaction fees from new gTLDs will come in at $5.5 million.

That’s still a few hundred grand less than it was predicting for FY17, back in 2016.

Transaction fees, typically $0.25, are paid by registries with over 50,000 names whenever a domain is created, renewed, or transferred.

The FY19 forecast for new gTLD registrar transaction fees has not been changed from the $4.3 million predicted back in May, but ICANN expects it to increase to $4.6 million in FY20.

ICANN’s budget forecasts are based on activity it’s seeing and conversations with the industry.

It’s previously had to revise new gTLD revenue predictions down in May 2018 and January 2018. 

ICANN is also predicting a bounceback in the number of accredited registrars, an increase of 15 per quarter in FY20 to end the year at 2,564. That would see accreditation fees increase from an estimated $9.9 million to $10.7 million.

The budget is also less than optimistic when it comes to legacy, pre-2012 gTLDs, which includes the likes of .com and .net.

ICANN is now predicting FY19 legacy transaction fees of $49.8 million. That’s compared to its May estimate of $48.6 million.

For FY20, it expects that to go up to $50.5 million, reflecting growth of 2.1%, lower than the 2.6% it predicted last year.

Overall, ICANN expects its funding for FY19 to be $137.1 million, $600,000 less than it was predicting in May.

For FY20, it expects funding to increase to $140.1 million. That’s still lower than the $143 million ICANN had in mind for FY18, before its belt-tightening initiatives kicked off a year ago.

The budget documents are published here for public comment until February 8.

ICANN will also hold a public webinar today at 1700 UTC to discuss the plans. Details of the Adobe Connect room can be found here.

After outcry, ICANNWiki to get ICANN funding next year

Kevin Murphy, May 23, 2018, Domain Policy

ICANNWiki will continue to get funding from its namesake, after community members complained about ICANN’s plan to abandon its $100,000 annual grant.

The independent wiki project will get $66,000 instead in the year beginning July 1, which will drop to $33,000 in ICANN’s fiscal 2020.

The funding will then disappear completely.

It’s a slight reprieve for ICANNWiki, which uses the money not only for its 6,000-article web site but also in-person outreach at events around the world.

The organization had complained about the plans to drop funding back in December, and fans of the site later called on ICANN to change its mind.

Supporters say the site fulfills a vital educational service to the ICANN community.

ICANNWiki also receives over $60,000 a year from corporate sponsors.

ICANN has also offered a reprieve to its Fellowship program in the new draft budget, reducing the number of people accepted into the program by fewer than expected.

It said in January it would slash the program in half, from 60 people per meeting to 30. That number will now drop to 45, at a cost of $151,000.

As discussed in this February article, the community has differing opinions about whether the program is an important way to on-board volunteers into ICANN’s esoteric world, or a way for freeloaders to vacation in exotic locations around the globe.

ICANN slashes new gTLD income forecast AGAIN

Kevin Murphy, May 23, 2018, Domain Policy

ICANN has yet again been forced to lower its funding expectations from new gTLDs, as the industry continues to face growth challenges.

In its latest draft fiscal year 2019 budget, likely to be approved at the end of the month, it’s cut $1.7 million from the amount it expects to receive in new gTLD transaction fees.

That’s even after cutting its estimates for fiscal 2018 in half just a few months back.

New gTLD registry transaction fees — the $0.25 collected whenever a new gTLD domain is registered, renewed or transferred, provided that the gTLD has over 50,000 domains under management — are now estimated at $5.1 million for FY19

That’s up just $500,000 from where it expects FY18, which ends June 30 this year, to finish off.

But it’s down $900,000 or 15% from the $6 million in transaction fees it was forecasting just four months ago.

It’s also still a huge way off the $8.7 million ICANN had predicted for FY18 in March 2017.

Registrar new gTLD transaction fees for FY19, paid by registrars regardless of the size of the TLD, are now estimated to come in at $4.3 million, up $400,000 from the expect FY18 year-end sum.

But, again, that number is down $800,000 from the $5.1 million in registrar fees that ICANN was forecasting in its first-draft FY19 budget.

In short, even when it was slashing its FY18 expectations in half, it was still over-confident on FY19.

On the bright side, at least ICANN is predicting some growth in new gTLD transactions.

And the story is almost exactly reversed when it comes to pre-2012 gTLDs.

For legacy gTLD registry transaction fees — the majority of which are paid by Verisign for .com and .net — ICANN has upped its expectations for FY19 to $49.6 million, compared to its January estimate of $48.7 million (another $900,000 difference, but in the opposite direction).

That growth will be offset by lower growth at the registrar level, where transaction fees for legacy gTLDs are now expected to be $30.2 million for FY19, compared to its January estimate of $30.4 million, a $200,000 deficit.

None of ICANN’s estimates for FY18 transaction fees have changed since the previous budget draft.

But ICANN has also slashed its expectation in terms of fixed fees from new gTLD registries — the $25,000 a year they all must pay regardless of volume.

The org now expects to end FY18 with 1,218 registries paying fees and for that to creep up slightly to 1,221 by the end of FY19.

Back in January, it was hoping to have 1,228 and 1,231 at those milestones respectively.

Basically, it’s decided that 10 TLDs it expected to start paying fees this year actually won’t, and that they won’t next year either. These fixed fees kick in when TLDs are delegated and stop when the contract is terminated.

It now expects registry fixed fees (legacy and new) of $30.5 million for FY19, down from expected $30.6 million for FY18 and and down from its January prediction of $31.1 million.

ICANN’s budget documents can be downloaded here.

ICANNWiki fans protest funding cut

Kevin Murphy, March 11, 2018, Domain Policy

ICANN should continue to fund the independent ICANNWiki project, according to high-profile industry supporters.

As I first reported back in December, ICANN plans to stop giving a $100,000 annual grant to ICANNWiki, a repository of about 6,000 community-sourced articles on the people and organizations involved in the ICANN community.

While ICANNWiki does not merit an explicit mention in ICANN’s latest proposed budget, both organizations have confirmed to DI that the funding is for the chop, as ICANN attempts to rein in spending in the face of depressed revenue.

About a quarter of the 41 comments filed on the budget express support for the wiki.

Consultant Kurt Pritz, a 10-year veteran of ICANN and one of the key architects of its new gTLD program, wrote that the wiki “has been an essential part of the ICANN culture for many years… often saving ICANN meetings from terminal ennui.”

Roland LaPlante, chief marketing officer of Afilias (one of about 15 sponsors listed on ICANNWiki’s front page), wrote:

The complete withdrawal of funding from ICANN so abruptly not only threatens the viability of the project, but rather disrespectfully junks the valuable time and resources that the community has invested over the years. Ultimately the loss of ICANNWiki would be a loss to our overall sense of community.

ICANN should continue to support ICANNWiki at a reasonable level in the next fiscal year. At a minimum, please consider giving the team time to find other sources of funding.

Sandeep Ramchandani, CEO of Radix, concurred, writing:

ICANNNWiki benefits the entire ICANN community. Cutting the funding entirely would effectively halt its operations and be a disservice to the community it serves. It is in ICANN and the community’s best interest to continue funding it in an amount that works for ICANN long-term, and provide ICANNWiki sufficient time to develop a more sustainable business plan.

Simon Cousins, CEO of Chinese market localization specialist Allegravita, said:

Before ICANNWiki, there was precious little information on industry fundamentals in China, and since Allegravita has supported the pro-bono translation of ICANNWiki content into Chinese, the vital platform that is ICANNWiki has been acknowledged hundreds of times.

We do not support the immediate and full withdrawal of funding for ICANNWiki. We guardedly support incremental, annual decreases to give ICANNWiki the time necessary to generate new sponsorship income to cover their costs.

Pablo Rodriguez of .pr ccTLD operator PRTLD, host of ICANN 61 and an ICANNWiki sponsor, wrote:

We believe that they should not be cut out from the ICANN’s Budget, instead, they should be supported and embraced to continue their engaging approach and work with ICANN’s Community and as well newcomers, veterans, special programming for beginners and others in order to deliver what is ICANN and what does the organization do and so forth.

Several other commentators on ICANN’s budget asked ICANN to maintain the funding and I was unable to find any comments supporting its withdrawal.

It’s worth noting that ICANN’s $100,000 is not ICANNWiki’s only financial support. It says it receives an additional $61,000 a year from corporate sponsorship, and as a wiki much of its output is produced by volunteers.

It has been in existence for a decade, but ICANN has only been giving it money for three years.

The costs associated with running it appear to be mostly centered not on maintaining the web site but on its outreach and promotional activities, such as attending meetings and the popular caricatures and card decks it distributes.

It could be argued that ICANNWiki is pretty good value for money when compared to cost of a dedicated outreach professional (the average cost of an ICANN staffer has been estimated at $175,000+ in the latest budget).

ICANNWiki will host an “Edit-A-Thon” during the current ICANN 61 public meeting in San Juan, Puerto Rico on Tuesday at 0900 local time.