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GoDaddy could lose control of .co this week

Kevin Murphy, September 8, 2020, Domain Registries

It looks like GoDaddy’s recently acquired .co registry could lose formal control of the ccTLD this week.

ICANN’s board of directors has “Transfer of the .CO (Colombia) top-level domain to the Ministry of Information and Communications Technologies” on its agenda for its meeting this Thursday.

Since 2009, IANA record for .co shows the Colombian company .CO Internet as the sponsor, admin contact and tech contact.

.CO Internet was acquired by Neustar for $109 million in 2014. Neustar’s registry business, including the .co contract, was acquired by GoDaddy earlier this year. Most of .CO Internet’s original staff are still with the company.

GoDaddy now has the contract to run .co for the next five years, but as a service provider rather than having full administrative control of the TLD.

A redelegation to the Colombian ministry will not affect that contract, and in fact seems to have been envisaged by it.

Back in April when the renewal was announced, MinTIC said it would in future “be in charge of its [.co’s] administration through a group dedicated to Internet governance with technical personnel with knowledge and ability to manage and administer the domain”.

The new deal also sees Colombia receive 81% of the profits from .co, compared to the 6-7% it received under the old deal.

Assuming the ICANN board gives the redelegation the nod this week, it usually only takes IANA a day or two to make the appropriate updates to its registry.

End of the road for Neustar as GoDaddy U-turns again and buys out its registry biz

GoDaddy has changed its mind about the registry side of the industry yet again, and has acquired the business of Neustar, one of the largest and oldest registries.

The deal will see GoDaddy purchase, for an undisclosed sum, all of Neustar’s registry assets, amounting to 215 TLDs and about 12 million domains.

It means the gTLD .biz is now under the new GoDaddy Registry umbrella, as are the contracts to run the ccTLDs .us, .in, and .co, 130 dot-brand gTLDs and 70 open gTLDs.

Neustar’s registry staff are also being taken on.

“We’re bringing the whole team aboard. One of the things we’re very excited about is bringing the team aboard,” Andrew Low Ah Kee, GoDaddy’s chief operating officer, told DI today.

He added that, due to coronavirus job insecurities wracking many minds right now, GoDaddy has promised its entire workforce that there will be no layoffs in the second quarter.

Nicolai Bezsonoff, currently senior VP of Neustar’s registry business, will run the new unit. He said for him the opportunity for “innovation” was at the heart of the deal.

“We’ve always been one step removed from the customer, so it can be hard to understand what customer wants to do,” he said. “This gives us huge customer insight into what customers want and how they want to use domains.”

Pressed for hypothetical examples of innovation, Bezsonoff floated ideas about selling domains for partial-year periods, or doing more to crack down on DNS abuse.

The deal is an example of “vertical integration”, which has been controversial due to the potential risk of a dominant registry playing favorites with its in-house registrar, or vice versa.

While registries such as Donuts, CentralNic and until recently Uniregistry vertically integrated with little complaint, the industry is currently nervous about Verisign’s newfound ability under its ICANN contract to own and run a registrar.

Because GoDaddy is the Verisign — the runaway market leader — of the registrar side of the industry, one might expect this deal (expected to close this quarter) to get more scrutiny than most.

But the company says it’s going to “strictly adhere to a governance model that maintains independence between the GoDaddy registry and registrar businesses”.

Low Ah Kee said that this means the registry and registrar “won’t share any information that gives or appears to given any unfair advantage” to the GoDaddy registrar, that their business performance will be assessed separately, and that they’ll be audited to make sure they’re not breaking this separation.

If GoDaddy appears to be preemptively expecting criticism, there’s a good reason why: the proposed acquisition of .org manager PIR by private equity group Ethos Capital has caused huge upset in recent months, and there are some parallels here.

First, like .org, pricing restrictions were lifted in Neustar’s .biz under a contract renewal with ICANN last year. It fell under the radar a little as .biz is substantially smaller, not a legacy gTLD as such, and not widely used.

Like the .org deal, the transfer of control of .biz will also be subject to ICANN’s approval before GoDaddy and Neustar can seal the deal.

Could we be looking at another big public fight over a gTLD acquisition?

But unlike Ethos with .org, GoDaddy says it has no intention of raising prices with .biz.

“We will not be raising prices, in fact we will look into reducing prices for some TLDs,” Bezsonoff said.

One TLD where one assumes prices won’t be going down is .co, where Neustar has just had its margins massively slashed by the Colombian government.

The acquisition was announced just days after the Colombian government announced that it has renewed its contract with Neustar to run .co for another five years, but under financial terms hugely more favorable to itself.

Whereas the initial 10-year term saw the government being paid 6% to 7% of the .co take, that number has soared to 81%, making .co — arguably Neustar’s registry crown jewel — a substantially less-attractive TLD to manage.

One assumes that the acquisition price would have fluctuated wildly based on the outcome of the .co renegotiation, but the GoDaddy/Neustar execs I talked to today didn’t want to talk about terms.

GoDaddy’s history with the registry side of the business has been changeable.

As far as ICANN contract is concerned, it is already a registry because it owns the .godaddy dot-brand. But that’s currently unused, with the registry functions outsourced to — cough — Neustar’s arch-rival Afilias.

Given Neustar’s religious devotion to the dot-brand concept, and the weirdness of using one of your primary competitors for a key function, one might expect both of those situations to change.

GoDaddy did also apply for .casa and .home back in 2012, but changed its mind and abandoned both bids fairly early in the process.

The sudden excitement about the registry business today begs the question of why GoDaddy didn’t buy Uniregistry’s registry business at the same time as it bought its secondary market and registrar earlier this year, but apparently it was not for sale.

Following the acquisition, Neustar is keeping its DNS resolution services and GoDaddy will continue to use them, so Neustar is not entirely out of the domain game, but it looks like the end of the road for Neustar as a brand I regularly report on.

The registry started life in 2000 as “NeuLevel”, a joint-venture between Neustar and Aussie registrar Melbourne IT formed to apply to ICANN for new gTLDs. It wanted .web, but got .biz, which now has about 1.7 million names under management, down from a 2014 peak of 2.7 million.

Is the .co rebid biased toward Afilias? Yeah, kinda

Kevin Murphy, January 17, 2020, Domain Registries

The Colombian government has come under fire for opening up the .co registry contract for rebid in a way that seems predetermined to pick Afilias as the winner, displacing its fierce rival Neustar.

As I blogged in November, Colombia thinks it might be able to secure a better registry deal, so it plans to shortly open .co up to competitive proposals.

A company called .CO Internet, acquired by Neustar for $109 million in 2014, has been running the ccTLD for the last decade. There are currently around 2.3 million .co domains under management, according to Colombia.

With the renewal deadline looming, the government’s technology ministry, MinTIC, published an eyebrow-raising request for proposals last month.

What’s surprising about the RFP is that some of the four main technical performance criteria listed are so stringent that probably only two companies in the industry qualify — Verisign and Afilias, and so far Verisign has not been involved in the RFP process.

The companies that have been engaging with the government to date are Afilias, Neustar/.CO, Nominet, CentralNic and Donuts.

First, MinTIC wants a registry that’s had at least two million domains under management across its portfolio continuously for two years. All five registries qualify there.

Second, it wants a registry that’s been involved in the migration of a TLD of at least one million names, either as the gaining or losing back-end.

That immediately narrows the pack to just two of the five aforementioned registries — Neustar and Afilias.

Verisign would also qualify, if it’s in the bidding, but I suspect it’s not. Taking over .co would look like a “buy it to kill it” strategy, which would be horrible optics for the Colombian government.

There have only ever been three migrations over one million names, to my knowledge: the Verisign->Afilias .org transition of 2003, the Neustar->Afilias .au move of 2018, and last year’s Afilias->Neustar .in handover.

CentralNic, Nominet and Donuts have all moved numerous TLDs between back-ends, but with much smaller per-TLD domain volumes.

Third — and here’s the kicker — the successful .co bidder will have to show that it processes on average 25 million registry transactions — defined as “billable EPP (write) transactions, as well as all EPP search (read) transactions” — per day. (All of the RFP quotes in this post have been machine-translated from Spanish by Google and run by a few generous Spanish speakers for verification.)

The RFP is not entirely clear on what exact data points it’s looking at here, but my take is that qualifying transactions include, at an absolute minimum, attempts to create a domain, renew a domain, transfer a domain and check whether a domain is registered.

The vast majority of such transactions are in the check and create functions, and I believe a great deal of that activity relates to drop-catching, where registries are flooded with add requests for just-deleted domains.

Whichever way you split it, 25 million a day is a ludicrously high number. Literally only .com, which sees 2.3 billion checks and 1.5 billion adds per month, sees that kind of action.

According to Neustar, which actually runs .co, it only sees 6.4 million transactions per day on average. The requirement to handle 25 million a day is “exaggerated, unjustified and discriminatory” against Neustar, Neustar told MinTIC.

But the RFP allows for the bidding registries to spread their 25-million-a-day quota across all of the TLDs they manage, and this MAY sneak Afilias over the line.

I say MAY in big letters because I don’t believe the numbers that Afilias (and probably other registries too) reports to ICANN every month are reliable.

If you add up the reported, qualifying EPP transactions for September in Afilias’ top four legacy gTLDs — .org, .info, .mobi and .pro — you get to over 25 million per day.

But those same records show that, for example, .mobi, .pro and .info had exactly the same number of EPP availability checks that month — 215,988,497 each.

This is clearly bad data.

I reported on this issue last May, when ICANN’s Security and Stability Advisory Committee informed ICANN that major registries were providing “not reliable” or possibly “fabricated” data about port 43 Whois queries.

Afilias, which was one of the apparent offenders, told me at the time that it was addressing the issue with ICANN, but it does not yet appear to have fully fixed its reporting to enable TLD-by-TLD breakdowns of its registry activity.

It is of course quite possible, even very likely, that Afilias has on average more than 25 million qualifying EPP transactions per day, but how’s it going to prove that to the Colombian government when the numbers it reports under contract to ICANN are clearly unreliable?

It’s a little harder to determine whether Neustar would qualify under the 25-million transaction rule, because some of its largest zones are ccTLDs — .co, .in and .us — that do not publicly report this kind of data. Its comments to the RFP suggest it would not.

Numbers aside, I’ll note that there’s very probably an inherent bias towards legacy gTLD operators like Afilias and against relative newcomers such as CentralNic if you’re counting EPP transactions. As I noted above, a lot of these transactions are coming from drop-catch activity, which is more prevalent on larger, older TLDs where there are more dropping domains that are more likely to have existing backlinks and traffic.

The fourth technical requirement in the Colombian RFP that looks a bit fishy is the requirement that the new registry must have channel relationships with at least 10 of the largest 25 registrars, as listed by a web site called domainstate.com.

I can’t say I’ve looked at domainstate.com very often, if at all, but a quick look at its numbers for September strongly suggests to me that it does not count post-2012 new gTLD registrations in its registrar league table. One registrar with almost four million domains under management doesn’t even show up on the list. This arguably could give an advantage to a registry that plays strongly in legacy gTLDs.

That said, it’s probably an academic point — I don’t think any of the bidders for the .co contract would have difficulty showing that they have 10 of the top 25 registrars on board, whichever way you calculate that league table.

Cumulatively, these four technical hurdles have led some to suggest that Afilias has somehow steered MinTIC towards creating an RFP only it could win.

Apart from what I’ve discussed here, I’ve no evidence that is the case, and Afilias has not yet responded to my request for comment today.

Luckily for the bidding registries, the Columbian RFP has not yet been finalized. Comments submitted by the bidders and others are apparently going to be taken on board, so the barriers to entry for respondents could be lowered before bids are finally accepted.

MinTIC posted an update last night that extends the period that the RFP could run, and the transition period should Neustar lose the contract. A handover, should one happen at all, could now happen as late as February next year.

Neustar’s .co contract up for grabs

Kevin Murphy, November 6, 2019, Domain Registries

Colombia is looking for a registry operator for its .co ccTLD.

If you’re interested, and you’re reading this before noon on Wednesday November 6 and you’re at ICANN 66 in Montreal, hightail it to room 514A for a presentation from the Colombian government that will be more informative than this blog post.

Hurry! Come on! Move it!

The Ministry of Information Technology and Communications (MinTIC) has published a set of documents describing some of the plan to find a potentially new home for .co.

There doesn’t appear to be a formal RFP yet, but I gather one is imminent.

What the documents do tell us is that Neustar’s contract to run .co expires in February, and that MinTIC is looking into the possibility of a successor registry.

Currently, .co is delegated to .CO Internet, a Colombian entity that relaunched the TLD in 2010 and was acquired by Neustar for $109 million in 2014.

But under a law passed earlier this year, it appears as if MinTIC is taking over policy management for .co and may therefore seek IANA redelegation.

There’s no indication I could see that there’s a plan to reverse the policy of allowing anyone anywhere in the world to register a .co, indeed MinTIC seems quite proud of its international success.

The documents also give us the first glimpse for years into .co’s growth.

It had 2,374,430 names under management in September, after a couple of years of slowing growth. The documents state that .co had an average of 323,590 new regs per year for the first seven years, which has since declined to an average of 32,396.

.co is not the cheapest TLD out there, renewing at around $25 at the low end.

.tech gTLD startups “raise $2 billion”

Kevin Murphy, August 28, 2019, Domain Registries

Tech startups using domain names in the .tech gTLD have raised $2 billion in venture capital financing over the last two years, according to Radix.

The registry looked at startups listed on Crunchbase as of June and found 650 companies using .tech domains. Of these, 170 of them had raised $2 billion in funding.

About 250 TLDs are in use by Crunchbase-listed startups, according to Radix.

According to a list provided by the company, funding amounts range from a modest $50,000 (obtained by the likes of the VR firm at virtualspaces.tech) to $620 million (obtained by the self-driving car company at aurora.tech).

Not every company on the list is still in business (if name resolution is any guide), and some of the .tech names bounce visitors to longer .com domains.

Meanwhile, domainer Morgan Linton has done a bit of similar research and discovered that 43% of the “top pick” startups appearing at Disrupt, the conference that like Crunchbase is owned by TechCrunch, are not using .com domains.

It’s a smaller sample size, but according to Linton, 18% of them use .io names. Most of the non-coms are on ccTLDs, in fact. The only new gTLD on his list is Google’s .app.

Disrupt made headlines in the domain world in 2010 when it launched its first conference web site on a .co domain, to coincide with the international launch of Colombia’s ccTLD by .CO Internet.

But that marketing deal lapsed after a year. Disrupt is back on techcrunch.com and disrupt.co is back in registry hands as a “premium” reserved name.

.co still appears on Linton’s list, however, so the initial partnership may still be bearing fruit.

.co first ccTLD to get China approval

Repurposed Colombian ccTLD .co has obtained official government approval to operate in China, according to a consultant whose client worked on the project.

Pinky Brand blogged this week that .co is the “first” foreign ccTLD to get the nod, among the raft of gTLDs that have gone down the same route over the last couple of years.

China’s own .cn and Chinese-script equivalents are of course already approved.

Under China’s policy regime, administered by the Ministry of Industry and Information Technology, TLD registries have to set up a local presence and agree to Draconian takedown policies.

Non-approved TLDs are not permitted to have resolving domains, under the rules.

Most companies seeking Chinese approval tend to use a local proxy provider such as ZDNS, which seems to be the route taken by .co here.

.co is managed by Neustar via its Colombian subsidiary .CO Internet.

Neustar pays $109 million for .CO Internet

Kevin Murphy, March 20, 2014, Domain Registries

Four years after relaunching the Colombian ccTLD .co as a global top-level domain, .CO Internet has been acquired by its long-time partner Neustar for $109 million.

The .co registry will become a wholly-owned subsidiary of Neustrar, which already runs .biz and .us, following the close of the deal.

.CO recorded revenue of $21 million in 2013, of which Neustar took $4 million as its back-end registry provider, according to Neustar.

The .co zone currently stands at about 1.6 million names, according to the companies. That seems to mean it added roughly 200,000 net new names in 2013, judging by its 2012 numbers.

The company relaunched .co in 2010, having jointly bid with Neustar for a Colombian government contract.

It was the last truly impressive TLD launch, with 200,000 registrations on day one and over 1 million in its first year.

While the space is still stuffed with speculators, unlike some other TLDs .co is also widely, visibly used by its intended audience — start-ups and entrepreneurs.

.CO is known primarily for its marketing acumen — some new gTLD registries could learn a thing or two — which Neustar CEO Lisa Hook raised as a selling point in today’s press release:

By combining .CO Internet’s innovative domain marketing capabilities with Neustar’s distribution network and technical resources, we will be able to broaden our registry services and the .co brand worldwide, while creating shareholder value.

Neustar expects the deal to close within a month.

.CO Internet looking for more registrars

.CO Internet is expanding its registrar channel with a new Request For Proposals.

The company wants would-be registrars to respond with the commitments they’re willing to make to market and promote .co domains, particularly in markets where .co is not currently popular.

Only ICANN-accredited registrars need apply.

Amusingly, registrars also need to be specifically accredited to sell .biz domains. Presumably this is due to .CO’s relationship with back-end provider Neustar, which also runs .biz.

The company has about 30 registrars right now, but many of those operate very large reseller networks, so there’s no shortage of places to buy a .co if you want one.

.CO deliberately kept its registrar numbers low — only 10 at launch — in order to cut down on abuse and to keep a tighter leash on gaming during the 2010 landrush process.

The RFP can be found here.

Go Daddy claims half-boobed Super Bowl ads success

Kevin Murphy, February 4, 2013, Domain Registrars

Go Daddy reckons its two commercials broadcast in the US during the Super Bowl last night were the most successful in the company’s history, according to two key metrics.

The company said in a press release:

Last night’s ads delivered more new customers and more overall sales, as compared to any other Super Bowl campaign in the company’s history.

Go Daddy has been advertising during the game for nine years. This year was the third in which is has partnered with .CO Internet, the .co registry, on one of the ads.

One of the ads was shameless, vintage, attention-grabbing Go Daddy — primarily comprising a lingering shot of a passionate kiss between an attractive female model and a male geek archetype.

The other, which advertised .co, largely eschewed mammary glands in favor of the “Underpants Gnomes” theory of domain name advertising, in which registering a domain somehow leads to fabulous wealth.

ICM Registry used a similar tactic in its launch advertising late 2011.

The Super Bowl is the season finale of a little-played fringe sport known as “American Football”.

Viewers of the annual US broadcast traditionally pay special attention to the regular commercial interludes because the brief, fleeting moments of actual sport are so soul-sappingly tedious.

.co sees DUM grow by a quarter, renewals dip to 63%

Kevin Murphy, December 26, 2012, Domain Registries

.CO Internet said that domains under management in its .co TLD has grown by 24.39% so far in 2012, standing at about 1.4 million at the end of November.

In a blog post last week, the repurposed Colombian ccTLD registry also said that its “blended renewal rate” for the last few months is roughly 63%.

That’s down slightly from the 66% that .CO reported on its first general availability anniversary in July 2011.

Second-year renewals are higher, in the mid-70s, according to the company.

About 93% of its DUM are second-level .co domains, the rest are mostly Colombia-targeted .com.co names.