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One in seven new gTLD domain names are actually just numbers

Roughly one out of every seven new gTLD domain names active today is numbers-only before the dot, according to DI research.

It might be surprising to some that the DNS, designed to turn immemorable numbers into memorable names, is actually being used to register millions of numeric domains.

Using the almost 1,000 new gTLD zone files we had access to on July 19*, DI counted 20,933,637 unique domain names of which 3,259,684 were purely numeric.

In other words, 15.57% of new gTLD domain names only contain numbers before the dot.

Fourteen gTLDs have a third or more of their zones fully numeric. One is two-thirds numeric.

The reason for this, of course, is China.

Numeric domains are said to be popular in China due to the fact that digits are the only 10 characters permissible in DNS that Chinese speakers natively understand.

Many popular web sites in China use short, numeric .com or .cn domain names. Some short numeric domains have sold for six or seven figures to end-user companies.

So there’s a thirst for numerics among Chinese domainers, as well as domainers elsewhere who want to exploit the Chinese market.

I talked to a successful domainer recently who acquired thousands of numeric domain names purely to flip to Chinese investors.

Personally, I think the market is overblown. Data suggests there’s a limited appetite for numerics among actual end users.

Fewer than 2,700 of top one million most-visited domains, as ranked by Amazon’s Alexa service, are numeric. A quarter of a percent. Even if Alexa is wrong by a factor of 10, that’s still only 2.7% of the internet’s biggest sites using numeric domain names.

So which gTLDs are most exposed to the numeric market?

Surprisingly, given the registry’s reluctance to deeply discount its domains, two Donuts gTLDs — .gold and .run, both relatively small TLDs — top the table with 66.32% and 54.65% respectively.

I think these are anomalies. The majority of Donuts’ portfolio have far smaller percentages of numerics.

Fellow portfolio players Afilias (.bet, .kim) and Uniregistry (.lol, .mom) also feature prominently on the list.

Here’s the top 30 new gTLDs, ranked by the percentage of their zones that are numeric. It includes every gTLD over 20%.

TLDTotal DomainsNumerics%
gold9,2366,12566.32
run16,2268,86754.65
bet25,50312,40448.64
lol95,69745,15447.18
rip3,0781,35844.12
men15,5906,82243.76
mom49,41820,96442.42
kim117,98448,26240.91
wang1,065,295404,05937.93
pink40,02714,53136.3
black22,1327,65234.57
xin119,52240,55533.93
win951,275318,62233.49
vin5,8151,90832.81
ink23,5827,08230.03
fund7,0482,05729.19
ooo18,7605,46029.1
blue41,03011,72728.58
red308,88085,12127.56
vip276,56575,92527.45
pet7,9852,07926.04
rent6,9931,73824.85
top2,611,513599,27822.95
bid368,92283,34122.59
date188,20341,81522.22
ren306,37367,67822.09
gift26,7155,75221.53
wiki18,1083,76220.78
club769,527159,49320.73
sale10,6042,16220.39

In absolute terms, the larger-volume registries naturally have the larger number of numeric domains in their zones.

XYZ.com’s .xyz alone has over 867,000 numeric domains in its zone. That’s a lot of names, but in percentage terms it’s below the industry mean.

.top, .wang, .win and club, all heavily marketed in China, fill out the top five in volume terms.

Here’s the top 30 gTLDs with the largest absolute number of numerics. They account for 3,099,981 numeric domains of the 3,259,684 industry total.

TLDTotal DomainsNumerics%
xyz6,051,039867,45514.34
top2,611,513599,27822.95
wang1,065,295404,05937.93
win951,275318,62233.49
club769,527159,49320.73
red308,88085,12127.56
bid368,92283,34122.59
vip276,56575,92527.45
ren306,37367,67822.09
site417,02358,22913.96
kim117,98448,26240.91
lol95,69745,15447.18
date188,20341,81522.22
xin119,52240,55533.93
loan242,01332,53713.44
mom49,41820,96442.42
tech134,00216,80412.54
pink40,02714,53136.3
pub63,85812,45319.5
bet25,50312,40448.64
blue41,03011,72728.58
news76,72511,06814.43
online301,06810,8263.6
website157,47810,5376.69
party206,43010,2364.96
run16,2268,86754.65
download71,0488,85312.46
help50,4528,14516.14
black22,1327,65234.57
one58,5427,39012.62

While short domains are more attractive to investors and end users, the vast majority of numeric domains in new gTLDs are of course longer than five digits.

.xyz, for example, has over 757,000 numeric domains of six or more characters. .top, .wang and .win are also measured in the hundreds of thousands in this regard.

Four gTLDs — .club, .wang, .top and .xyz — are over 99% full when it comes to five-digit numeric domains (that is, they have over 99,000 numeric domains in their zones).

.win is over 95% full on that basis, after which the numbers drop sharply to 65% and below.

In terms of four-number domains, there are 10 gTLDs that are over 99% full and 16 over 90% full.

There are 36 new gTLDs over 90% full in terms of three-digit numeric domains. More than a dozen appear to be completely full (giving myself some wriggle-room for reserved names and those that otherwise don’t appear in the zone files).

So what to make of all this?

I’m not a domainer, but I’ve sometimes heard domainers compare domains to baseball cards.

Going with that analogy, I’d say that if the typical numeric domain name collection contains the odd vintage Babe Ruth**, he’s far outnumbered by cards depicting some guy’s kid playing catch in the park.

That may be true of all domain portfolios, numeric or otherwise, but I feel numerics exist primarily right now to be traded between domainers.

As long as this continues, new gTLD registries — at least the ones actually charging for their names — will continue to benefit.

* A note on methodology. Due to the way access to zone files via ICANN works (ie, sporadically) we were missing some zone files on July 19. Including the missing gTLD may alter the league tables presented above, but I don’t believe the missing data was significant to the overall totals. Only one of the top 100 gTLDs, a zone of about 28,000 names, was missing.

** I know nothing about baseball.

Cruz-Duffy bill would put brakes on IANA transition

Kevin Murphy, June 9, 2016, Domain Policy

America’s continuing unique oversight role in the DNS root management system, fuck yeah!

That’s basically the takeaway from a new bit of proposed US legislation, put forward by Sen. Ted Cruz and Rep. Sean Duffy in both houses of Congress yesterday.

The two Republican Congressmen have proposed the inappropriately named Protecting Internet Freedom Act, which is specifically designed to scupper the IANA transition at the eleventh hour.

PIFA would prevent the National Telecommunications and Information Administration from backing away from its role in the DNS root management triumvirate.

It’s supported, ironically, by a bunch of small-government right-wing think tanks and lobby groups.

If the bill is enacted, NTIA would need a further act of Congress in order to cancel or allow to expire its current IANA functions contract with ICANN

The bill (pdf) reads:

The Assistant Secretary of Commerce for Communications and Information may not allow the responsibility of the National Telecommunications and Information Administration with respect to the Internet domain name system functions, including responsibility with respect to the authoritative root zone file and the performance of the Internet Assigned Numbers Authority functions, to terminate, lapse, expire, be cancelled, or otherwise cease to be in effect unless a Federal statute enacted after the date of enactment of this Act expressly grants the Assistant Secretary such authority.

The bill also seeks to ensure that the US government has “sole ownership” of the .gov and .mil TLDs “in perpetuity”.

These ownership rights are not and have never been in question; the inclusion of this language in the bill looks like a cheap attempt to stir up Congresspeople’s basest jingoistic tendencies.

A Cruz press release said the IANA transition “will allow over 160 foreign governments to have increased influence over the management and operation of the Internet.”

Duffy added:

President Obama wants to hand over the keys to the Internet to countries like China and Russia. This is reckless and absurd. The governments of these countries do not value free speech. In fact, they censor the Internet and routinely repress and punish political dissidents. They cannot be trusted with something as fundamental to free speech as a free and open Internet.

It’s unfiltered scaremongering.

No country — not China, Russia, the US nor any other government — gets increased powers under the IANA transition proposal, which was painstakingly crafted by, and is now supported by, pretty much all community stakeholders over two years.

In fact, governmental power is significantly curtailed under the proposal.

Post-transition, the Governmental Advisory Committee’s current voting practice, which essentially requires unanimity, would be enshrined in ICANN’s bylaws.

If the GAC came to ICANN with advice that did not have consensus — that is, some governments formally objected to it — ICANN would be able to reject it much more easily than it can today.

The one area where the GAC does get a new role is in the so-called “Empowered Community”, a new concept that will enter the ICANN bylaws post-transition.

The Empowered Community would be a non-profit legal entity formed by the ICANN community in the exceptional event that the ICANN board goes rogue and starts doing really egregious stuff that nobody wants — for example, introducing Draconian policy regulating freedom of speech.

The EC would have the power to kick out the ICANN board members of its choice, reject the ICANN budget, throw out proposed bylaws amendments and so on. As far as ICANN is concerned, the EC would be God.

Its members, or “Decisional Participants” would be the GNSO, the ccNSO, the ALAC, the ASO and the GAC.

The fact that the GAC has a seat at the EC table is the straw that Cruz, Duffy and co grasp at when they talk about governments getting increased power in a post-transition ICANN.

But the GAC’s voice is equal to those of the other four participants, and the GAC is not allowed a vote on matters stemming from ICANN’s implementation of consensus GAC advice.

In other words, the only way Cruz’s boogeymen governments would ever get to push through a censorship policy would be if that policy was also supported by all the other governments or by the majority of the diverse, multi-stakeholder ICANN community.

The arguments of Cruz and Duffy are red herrings, in other words.

Not only that, but the US record on attempted censorship of the DNS root is hardly exemplary.

While it’s generally been quietly hands-off for the majority of the time ICANN has had its hand on the rudder, there was a notable exception.

The Bush-era NTIA, following a letter-writing campaign by the religious right — Bible-thumping Cruz’s base — exerted pressure on ICANN to reject the proposed porn-only .xxx gTLD.

So who’s the real threat here, Red China or Ted Cruz, the man who tried to ban the sale of dildos in Texas?

The Protecting Internet Freedom Act is obviously still just a bill, but Republicans still control both houses of Congress so it’s not impossible that the tens of thousands of hours the ICANN community has put into the IANA transition could be sacrificed on the altar of embarrassing the President, who is probably Kenyan anyway.

China conference leads to 49% .vip spike

The Global Domain Industry Conference, held in China over the weekend, has led to a huge boost in .vip domain sales.

Registry Minds + Machines told the markets this morning that the recently launched gTLD hit 404,892 as of 1600 UTC yesterday, up 49% from Friday.

CEO Toby Hall confirmed to DI that China is very much behind the spike, and that the conference helped raise the profile of .vip.

Billings and orders have now hit $5.5 million, up from $3.2 million on May 22, M+M said. That number includes sunrise and premium sales.

At GDS, M+M sold eight .vip domains auction for a total of $232,000 before auction commissions, which very likely inspired the spike in base-fee registrations.

Photos of GDS published on social media yesterday show a packed auditorium, with hundreds of attendees.

While M+M makes much of the fact that it has not used a “freenium” strategy for .vip — which it says may lead to better renewal rates than competitors — retail prices are still pretty damn cheap.

At West.cn, its leading Chinese registrar, a .vip can be had today for about $3. It’s closer to $10 at GoDaddy.

Today’s batch of zone files have not yet been published by ICANN for verification, but yesterday there were 245,872 names in .vip.

Verisign has great quarter but sees China growth slowing

Kevin Murphy, April 29, 2016, Domain Registries

Verisign beat its sales expectations in the first quarter of the year, but leadership said rapid growth from Chinese registrants will now “normalize”.

The .com/.net registry last night reported net income up 21% at $107 million, on revenue that was up 9.1% to $282 million.

That’s based primarily on it selling 2.65 million net new .com/.net names during the quarter, at 7.1% increase on the Q1 2014 level baseline. It said it sold 10 million new names in the quarter, up from 8.7 million a year ago.

For comparison, Q1 2015 saw 1.51 million net adds across the two TLDs. Three months ago, the company had predicted net adds to be 1.5 to 2 million names.

It had 142.5 million names at the end of the quarter, 126.6 million of which were .com.

CEO James Bidzos told analysts: “We again saw activity coming from registrars in China that exceeded our expectations.”

However, he added: “At this point, we expect activity from registrars in China to normalize as we continue through the second quarter.”

When pressed, CFO George KIlguss elaborated (according to the SeekingAlpha earnings call transcript):

as we look at the trends, we’ve seen the demand that happened in the second half of the first quarter kind of ebb and flow. So we saw it come. It was pretty strong for a few weeks and then it came back to more than normalized path. So we don’t have a perfect crystal ball, but based on the trends that we’ve seen that we’ve been tracking, it seems to be back on the normalized path for that particular region, at least as what we’ve seen historically.

Verisign is currently negotiating for the renewal of its .com contract with ICANN, which may or may not enable it to raise its government-frozen registry prices in future.

M+M turns $22m profit into $10m loss

Kevin Murphy, April 27, 2016, Domain Registries

Minds + Machines today reported a 2015 loss of $10 million and further outlined its “transformative” restructuring and China strategy.

It’s the second full year of operating results M+M has posted since its first new gTLDs went live, and they’re not encouraging.

Revenue for accounting purposes was $6.3 million, but the cost of sales was $6.2 million, leaving gross profit of just $101,000.

Factoring in $12.1 million of operating expenses, a $7.9 million gain from losing new gTLD auctions, and other expenses, the total loss before tax was $10 million.

That’s compared to the $22 million profit M+M reported for 2014, a number entirely reliant on $33.7 million of auction loss payments.

The company also reported its “billings”, a line item that does not use the accounting method of deferring revenue across the life of a domain and is therefore more in line with incoming cash.

Billings for 2015 were $7.9 million, compared to $5 million in 2014. Gross profit under that measure was $1.7 million, but the $12 million of operating costs still made the company very unprofitable.

Ignoring the auction benefits in 2015, which will not last forever, it’s pretty clear that M+M was a company spending much more operating new gTLDs than it was making from them.

COO/CFO Michael Salazar said in a statement:

However, billings of $7.9 million for the year were simply not of a sufficient scale to cover the associated cost of sales ($6.2 million) and operating expenses ($12.2 million), which combined reached $18.4 million for 2015. Similarly, the $0.6 million savings achieved in the period by the decisions mid-year to stream-line the existing operational set-up were not of a magnitude to have any material impact in the year under review. That said, forfeited cost of sales and operational expenses as a result of the 2015 cost-cutting decisions will amount to $2.7 million in 2016

It’s perhaps little wonder that activist shareholders, apparently not prepared to play the long game, threw out half of the board and key senior executives during the period.

Former PR man Toby Hall took over as CEO in February, replacing co-founder Anthony Van Couvering, and announced earlier this month that M+M is dumping its registrar and back-end registry businesses.

Its registrar customers have been sold to Uniregistry, and it will outsource its registry back-end to Nominet, to save costs.

Salazar said that the two deals will lead to $2 million in savings, but won’t be complete before the fourth quarter. It seems unlikely they’ll have a great impact on 2016 numbers.

Headcount has been reduced from a peak of 61 to 43 at the end of the year, and is expected to drop further to 25. Salazar said this will save it $4.7 million a year.

Even with these cost reductions, M+M will still need to essentially double its revenue in order to hit operating profitability, it seems.

The company is pinning some of its growth hopes on .vip, which it expects to do well in China. It launches May 18.

Hall said in a statement that M+M would not follow the lead of competitors (Famous Four Media springs to mind) by offering first-year registrations for free to build market share. He said:

Based on the enquiries received during Sunrise and feedback gained through our two recent marketing trips to China, it is clear that there is genuine interest in the domain both within and outside of China. As a result, we will not be using a year-one freemium approach to simply inflate year-one registrations. Instead, we intend to be keenly priced to ensure margin to ourselves — and registrations — as well as protect the integrity of the domain. The volume we anticipate to be generated through keen pricing will then support the sales of our premium names in this domain.

The company also plans to invest in its .law sales team, because billings for that gTLD have been behind expectations.

M+M had $34.6 million in the bank and eight outstanding contested new gTLD applications at the end of the year.