Latest news of the domain name industry

Recent Posts

The two biggest registrars knock it out of the park in Q2

Kevin Murphy, August 11, 2020, Domain Registrars

GoDaddy and Tucows, the industry’s two largest registrars, both last week posted very strong second-quarter results due to the beneficial impact of the coronavirus lockdown.

Market-leader GoDaddy in particular seems to have knocked it out of the park, adding a ridiculous 400,000 net new customers during the April-June period, the strongest quarterly performance in the company’s 20-year history.

The company reported domains revenue of $369.6 million, up 10.5% on the year-ago quarter, its strongest-performing segment.

Tucows, meanwhile, reported domains revenue essentially flat at $60 million, but pointed to registration growth as an indicator of its showing.

Tucows CEO Eliot Noss said in prerecorded remarks that new registrations from its reseller channel were up 41% in the quarter, with overall wholesale registrations up 7% to 4.3 million.

In the retail channel, domains under management was up 9% year-over-year to 400,000, with new registrations up more than 20%.

The CEOs of both companies were unambiguous that the coronavirus pandemic could take credit for their results. Noss said:

As expected, in Q2 we saw the full effects of the pandemic that we began to experience toward the end of Q1, with businesses globally moving quickly online, and displaced workers turning to entrepreneurship as the next stage in their career paths. A large proportion of that new registration activity was those resellers who focus on helping small and micro-sized businesses and start-ups establish a web presence for the first time.

GoDaddy CEO Aman Bhutani characterized the virus as a catalyst for businesses stubbornly remaining offline to finally get a web presence, telling analysts:

COVID-19 has pushed a number of people past the point of inertia where they were not adopting digital… because people have no choice but to go digital to support their businesses, we’re seeing people experimenting with ideas. We’re seeing people come online, even though they had hesitated to do it in the past.

Overall, GoDaddy reported revenue up 9.4% at $806.4 million. Its net loss was $673.2 million, due mostly to a one-time tax-related payment.

Tucows overall revenue was $82.1 million, down from $84.1 million, largely due to the drag factor of its recently restructured Ting Mobile business. Net income was $157,000, down from $2.6 million.

Domain industry had best April ever under lockdown

Kevin Murphy, August 10, 2020, Domain Registries

The domain industry had its best April ever in terms of new domains sold in gTLDs, according to my tally, despite much of the Western world spending the month in coronavirus lockdown.

There were a total of 5,291,077 domain adds in April, across all 1,253 gTLDs currently filing transaction reports with ICANN.

That’s up almost 100,000 on the 5,191,880 adds in April 2019 and the best April since the first new gTLDs started coming into circulation in 2013.

20205,291,077
20195,191,880
20185,062,852
2O175,031772
20164,314,305
20153,847,510
20143,809,862
20133,584,271

While a measly 100k jump may be less impressive than expected based on the enthusiastic descriptions of the lockdown bump coming from registries and registrars over the last few months, it makes a bit more sense when you factor out Chinese volume success story .icu.

.icu, currently the largest of the new gTLDs, was having a bit of a growth spurt at the start of 2019, and added 267,287 domains in April last year. That was down to 56,714 this April. The TLD has been declining for the last few months.

Looking at the TLDs that seem most obviously related to lockdown, the standout is .bar, which added 26,175 names this April, compared to just 151 a year ago.

It’s been well-reported that many restaurants and bars affected by coronavirus switched to online ordering and home delivery, and .bar appears to be a strong beneficiary of this trend.

.bar currently has more than 100,000 names in its zone file, roughly double its pre-lockdown level.

.com fared well, adding 3,382,029 domains this April, compared to 3,360,238 in the year-ago period.

But .xyz did better, relatively, adding 256,271 names, compared to 200,003 a year earlier.

Also noteworthy was .buzz, which has been performing very strongly over the last 12 months. It added 60,808 names this April, compared to just a few hundred.

This table shows the 20 gTLDs with the most adds in April 2020, with their April 2019 numbers for comparison.

TLDApril 2020 AddsApril 2019 Adds
com3,382,0293,360,238
xyz256,271200,003
net233,449195,328
org184,209145,394
online132,09265,244
site96,61790,224
info96,546121,980
top89,965138,425
buzz60,808669
icu56,714267,287
club56,12757,335
shop40,38867,337
website32,55317,000
store31,59915,424
live28,82322,620
page27,5662,457
space26,70621,749
bar26,175141
link24,5683,852

No .sex please, we’re infected!

MMX saw poorer-than-expected sales of porn-related defensive registrations in the first half of the year, the only blip in what was otherwise a strong period for the company.

The registry updated the market today to say that its domain name base grew by 31% year over year during the half, ending June with 2.38 million names under management. It only grew by 19% in the same period last year.

Billings for H1 were up 7% at $7.9 million, MMX said.

But because the mix shifted away from one-off brokered sales, which are registered on the earnings report as a lump sum, and towards regular automated registrations, which are recognized over the lifetime of the reg, MMX expects to report revenue 5% down on last year.

While that’s all fair enough, the company said that it didn’t sell as many defensive blocks in .xxx, .sex, .porn and .adult as it had expected, which it blamed on coronavirus:

Management also notes that expected H1 channel sales from the Company’s brand protection activity were held back due to the impact of COVID-19, but anticipates those brand protection initiatives that were delayed in Q2 will resume in H2.

It’s a reference to the AdultBlock and AdultBlock Plus services launched last year, which enable trademark owners to block (and not use) their marks in all four adult TLDs for about $350 to $800 a year.

Domainers immune from the lockdown bump?

Kevin Murphy, July 30, 2020, Domain Sales

While the can be little doubt that the domain industry saw a boost in the second quarter due to the impact of coronavirus lockdown mandates, the same may not be true for those playing in the secondary market.

Data out from Escrow.com last night shows the weakest quarter for secondary market sales since the company started publishing its data two years ago, with average prices and overall sales volume down.

The company, which acts as a trusted intermediary for domain transfers, said it processed $55.2 million of sales in Q2, down from $85.8 million in the first quarter.

All of the primary geographical markets saw a decline apart from Hong Kong, with the US suffering the worst dip.

The US obviously has taken the biggest dose of the virus and has little in the way of a social safety net, so it’s perhaps not surprising that buyers are being more cautious with their cash.

The declines fly in the face of data and commentary from the primary market, where registries and registrars have generally been seeing unexpected boosts to sales as lockdown-impacted small businesses rush online.t

It’s tempting to speculate that while the virus has created more customers for domain names, fears over the incoming recessions have made buyers less likely to want to splash out on a premium domain.

Escrow.com said that the median price of a domain name without associated content dropped from $3,000 to $2,500 in the quarter.

.com renewals lowest in years, but Verisign sees lockdown bump anyway

.com and .net saw decent growth in the lockdown-dominated second quarter, despite Verisign reporting the lowest renewal rate since 2017.

The company last night reported that it sold more new domains in Q2 than it did in the same period last year — 11.1 million versus 10.3 million a year ago.

It added a net 1.41 million names across both TLDs in the quarter, compared to growth of 1.34 in Q2 2019.

CEO Jim Bidzos did not directly credit coronavirus for the bump, but he told analysts that the growth was driven primarily by small businesses in North America getting online. The US went into lockdown in the last week of March.

Verisign has now upped its guidance for the year. It now expects growth in domains of between 2.75% and 4%. That’s higher than the guidance it was giving out at the start of the year, pre-coronavirus.

The company had lowered this guidance to between 2% and 3.75% in April due to coronavirus uncertainties, which with hindsight clearly seems overly cautious.

On the flipside, Verisign’s estimated renewal rate for the quarter was down to only 72.8%, down from 74.2% a year ago, the worst it’s been since Q1 2017, when renewals were suffering through the tail-end of a massive Chinese junk drop.

But Bidzos said that the low rate was “primarily related to the lower overall first-time renewal rate”, suggesting that it might be more due to registrar promotions or heightened speculation a year ago than any coronavirus-related drag factor.

For Q2, Verisign reported revenue up 2.6% year over year at $314 million, with net income up from $148 million to $152 million.

The company also announced yesterday that it is freezing its prices across all of its TLDs until March 31, 2021.

You’ll recall that it gets the right to increase prices 7% starting on October 26 this year, under its new deal with ICANN and the US government, and Verisign confirmed yesterday that there will definitely be a price increase next year.

Because there’s a six-month notice period requirement in the contract, news of the timing of this increase could come as soon as September this year.

ICANN still has no clue how coronavirus will affect the domain industry

Kevin Murphy, July 21, 2020, Domain Policy

ICANN is still in the dark about how the coronavirus pandemic is going to affect the domain industry’s fortunes and its own budget, judging by a blog post published overnight by CEO Göran Marby.

In the post, Marby outlined his 10 priorities (six created by himself, four by the ICANN board) for the recently commenced fiscal year, and the impact of the virus is front and center.

Notably, it appears that ICANN is thinking about creating a new department or hiring a new senior “economist” to track the domain market and forecast trends.

Bullet #6 on Marby’s list is:

Develop a plan for the potential economist function within ICANN org to follow and evaluate Domain Name System (DNS) market trends.

Background: I’ve heard the question asked, “Is the DNS market changing?” My answer is yes, probably. The questions we need to ask now are, what’s good for the end user, and what will be bad?

My read on this is that we might be looking at a new VP — an astrologer-in-chief, if you like — whose job it would be to read the tea leaves, stare into a crystal ball, rummage through pigeon guts, and predict budget-affecting market moves before they happen.

That’s a function currently occupied by the office of CFO Xavier Calvez, but his track record is spotty, having in previous years failed to predict basic stuff like junk drops in the new gTLD space.

Another of Marby’s goals, set by the board, is:

Develop and implement a plan to ensure continued financial stability in a world affected by COVID-19.

Background: While ICANN’s financial situation is sound at the moment, the impact of the unprecedented effect of the COVID-19 pandemic on the world economy is still unknown.

ICANN’s recently passed FY21 budget predicts an 8% slump in revenue due to an estimated 33% plummet in new gTLD registrations and a 2.3% drop in legacy gTLD regs, as well as a loss of 62 fee-paying dot-brand gTLDs and 380 accredited registrars.

That said, it’s also saving millions by eschewing face-to-face meetings until the whole coronavirus mess is sorted.

It’s not entirely clear how ICANN arrived at its numbers, but it seems the domain industry is looking into unknown waters right now.

It’s undeniable that the pandemic-related lockdown mandates around the world have proved a huge boon to the industry, as bricks-and-mortar businesses retreat online to try to save their livelihoods, but it’s unclear whether this boost will continue as nations emerge from quarantine and into record-setting recessions.

ICANN’s budget is dependent more than anything else on registration volumes in gTLDs, so its fiscal stability will depend on whether people continue to buy and renew domains as they lose their jobs and their companies go out of business.

It seems inevitable that companies going bust and dropping their domains is a trend we’re going to face over the coming few years, but as long as there’s enough liquidity in the domainer community that shouldn’t prove a massive issue for ICANN, which does not care who registers a domain, merely that it is registered.

Aside from budgeting concerns, the impact of coronavirus on ICANN meetings is #1 on Marby’s list of priorities.

Work with Supporting Organization and Advisory Committee leaders, community members, and the Board to define and implement a phased plan to return to face-to-face meetings. This plan will ensure the provision of safe and effective meeting formats that support the ongoing work of the community as well as allow robust remote participation options for anyone unable to attend in person. The final plan will be integrated with regional and global engagement activities.

Background: Face-to-face meetings have always been an important part of ICANN’s DNA. Despite the current pandemic-related restrictions, the Board, community, and org must ensure that we remain able to collaborate, and that we are still able to attract new participants into ICANN.

Since March, every meeting that would usually be held face to face, including the two big public meetings, has instead been held over Zoom, which has drawbacks and limitations. This October’s Hamburg meeting will also be online-only.

Marby to a great extent has his hands tied here.

As long as the virus rages out of control in ICANN’s native US, he’s going to be limited to hosting meetings in locations not only where the coronavirus has been tackled to the degree where large congregations are permitted but also where Americans are allowed to travel quarantine-free.

The next scheduled public meeting is due to take place in Cancun, Mexico in March 2021, but that country currently has locked its border to travelers from the north.

And regardless of what laws are in place next March, ICANN’s going to have to get a read on whether any community members will feel safe enough to travel — to a windowless room where everyone wears masks two meters apart for 10 hours a day — before going ahead with an expensive in-person meeting.

It seems more likely that F2F meetings will resume first on a regional level before going fully international. Travel narriers within the European Union, for example, are relatively low, so it’s not impossible to imagine small meetings going ahead with only participants from that community.

Endurance also got a lockdown bump in Q2

Endurance International Group added its name to the list of registrars to see a lift from the coronavirus pandemic in the second quarter.

The company, which counts brands including Domain.com, BuyDomains and ResellerClub in its stable, this week upgraded its guidance for Q2.

Endurance said it added roughly 97,000 net subscribers in the quarter, compared to a loss of 13,000 in Q2 2019.

It expects revenue to be $274 million compared to an analyst consensus of $271.25 million, and adjusted EBITDA of about $84 million compared to the $76.3 million reported a year ago.

Cash bookings, perhaps a better indicator of actual sales during the quarter were up 5% year over year at $281.6 million.

Unlike other registrars and registries that have reported a lockdown bump, Endurance suggested that it performed well in spite of, rather than because of, the pandemic. In a statement, CEO Jeffrey Fox said:

As we entered the second quarter, the healthcare and economic uncertainties brought on by COVID-19 were impacting global businesses, including the millions of small businesses we serve. Despite these challenges, we remain focused on delivering value to our customers as they navigate this complex environment.

Endurance will report its Q2 results July 30.

One.com takes big chunk of Danish market with third acquisition this year

European registrar One.com says it is now the biggest player in the Danish market after acquiring rival Larsen Data, which does business as GratisDNS, for an undisclosed sum.

One.com says that the deal means it now sponsors over 400,000 of the 1.3 million extant .dk domains, making it the largest local registrar.

GratisDNS has been around since 2001. It’s not a big player in gTLDs, with only 550 names under management at the last count.

It’s the third announced acquisition by One.com this year. It also bought Dutch hosting provider Hostnet and Norwegian registrar SYSE.

The company also recently said that, like so many other registrars, business has been booming during the coronavirus pandemic as bricks-and-mortar businesses relocate online.

Interestingly, sales were up 55% year-on-year in locked-down Denmark, but only up 7% in quarantine-free Sweden.

One.com also runs the .one gTLD, which has almost 78,000 names in its zone file right now. The registrar has been offering first-year regs for free recently.

GratisDNS had planned to apply for a city gTLD for Copenhagen back in 2012, but failed to secure governmental interest.

Coronavirus helps .nl beat 6 million regs

Dutch ccTLD .nl passed the six-million-domains milestone recently due in part to a surge in registrations during coronavirus lockdown.

According to SIDN, the registry, the six millionth domain was deyogiclub.nl and it was registered June 18.

According to my data, .nl has grown by about 100,000 domains since the start of 2020, and by about 80,000 names in the second quarter.

SIDN said (Google-translated from the original Dutch):

The number of registrations rose so rapidly during the corona crisis in recent months that the 6 million .nl domain registrations were reached much earlier than expected on the basis of the growth development.

The Netherlands entered its strongest period of lockdown March 15 and started easing restrictions in mid-May.

World’s most deluded new gTLD applicant makes coronavirus pitch

Kevin Murphy, June 29, 2020, Domain Policy

Indian new gTLD applicant Nameshop, which still refuses to accept defeat eight years after its application for .idn was rejected, has a new coronavirus-related pitch to try to persuade ICANN to please, please, give it a gTLD.

You may recall that this company applied for .idn in 2012, overlooking the fact that IDN was banned as the reserved three-letter country code for Indonesia.

Ever since the mistake was noticed, Nameshop has been trying to convince ICANN to let it change its string to .internet, which nobody else applied for, requests that have been repeatedly rejected.

The newest Nameshop plea to ICANN (pdf) pitches .internet as a space where IGOs, NGOs and others could build or host web sites dedicated to coronavirus-related activities.

The company says it wants to:

temporarily — for the length of the pandemic crisis — operate the TLD with a request for heightened involvement of ICANN and the ICANN Community in the interest of making use of the DNS technologies, to help Government Agencies and Communities involve, increase and optimize their efforts to manage the Crisis and the ensuing recovery and renewal.

It wants to offer:

a clean new space for IGOs and NGOs to come together in their efforts to communicate, collaborate, generate solutions and expeditiously resolve the health crisis while also enabling organizations to collaborate on reconstruction efforts

The company says it would not make any money on .internet until after coronavirus is solved.

It’s also offering to set aside a quarter of its profits for good causes.

I don’t know whether Nameshop is motivated by a genuine desire to do good — as so many are during the pandemic crisis — or a sneaky strategy to shame ICANN into giving it its string change. Either way, the plan is pure delusion.

The reason ICANN has continually rejected Nameshop’s request for a string change from .idn to .internet for the last eight years is that it would set a precedent allowing any applicant to apply for any nonsense string and later change it to a desirable, uncontested string.

That hasn’t changed.

But while Nameshop has been tilting at windmills, ICANN has been earning interest on its $185,000 application fee, which I’m sure could be put to a far better use if Nameshop simply requested the full refund ICANN has offered.