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US officials gunning for coronavirus domains

Kevin Murphy, March 24, 2020, Domain Registrars

US state and federal law enforcement are pursuing domain names being used to push bogus products and misinformation related to coronavirus Covid-19.

In separate actions, the US Department of Justice forced Namecheap to take down a scam site that was allegedly using fear of coronivirus to hoodwink visitors out of their cash, while the New York Attorney General has written to registrars to demand they take action against similar domains.

The DoJ filed suit (pdf) against the anonymous “John Doe” registrant of coronavirusmedicalkit.com on Saturday and on Sunday obtained a temporary restraining order obliging Namecheap to remove the DNS from the domain and lock it down, which Namecheap seems to have done.

Namecheap is not named as a defendant, but the complaint notes that the DoJ had requested the domain be taken down on March 19 and no action had been taken by the evening of March 21.

The web site in question allegedly informed visitors that the World Health Organization was giving away free coronavirus vaccines to anyone prepared to pay a $4.95 shipping fee by handing over their credit card details.

This is an identity theft scam and wire fraud, the complaint says.

Meanwhile, NYAG Letitia James has sent letters, signed by IT chief Kim Berger, to several large US registrar groups — including GoDaddy, Dynadot, Name.com, Namecheap, Register.com, and Endurance — to ask them to “stop the registration and use of internet domain names by individuals trying to unlawfully and fraudulently profit off consumers’ fears around the coronavirus disease”.

In the letter to GoDaddy (pdf), Berger asks for a “dialogue” on the following preventative measures:

  • The use of automated and human review of domain name registration and traffic patterns to identify fraud;
  • Human review of complaints from the public and law enforcement about fraudulent or illegal use of coronavirus domains, including creating special channels for such complaints;
  • Revising your terms of service to reserve aggressive enforcement for the illegal use of coronavirus domains; and
  • De-registration of the domains cited in the articles identified above that were registered at GoDaddy, and any holds in place on registering new domains related to coronavirus, or similar blockers that prevent rapid registration of coronavirus-related domains.

In other words: try to stop these domains being registered, and take them down if they are.

No specific malicious sites are listed in the letter. Rather, Berger cites a study by Check Point Software that estimates that something like 3% of the more than 4,000 coronavirus-related domains registered between January and March 5 are “malicious” in nature.

Endurance domain revenue dips

Kevin Murphy, February 7, 2019, Domain Registrars

Endurance International put in a poor show when it came to domains name sales in 2018.

Revenue and average revenue per registrant were both down in the fourth quarter and full-year results, which were announced this morning.

Endurance’s registrar business includes BigRock, Domain.com, FastDomain, PublicDomainRegistry.com and others.

Combined, those four brands account for almost 10 million gTLD domains under management, but that number has also been heading south recently.

The company said today that its fourth-quarter domain revenue was $31.3 million, down from $33 million a year earlier. It had 666,000 domain subscribers at the end of the quarter, down from 683,000.

Average revenue per subscriber for the quarter was also down, from $16.63 to $15.63.

For the full year, revenue was down from $133.6 million to $129.9 million and average revenue per subscriber was down from $16.98 to $16.05.

The shrinkage is reflected in the latest transaction reports filed with ICANN, too.

In October, the most recently reported month, all four of Endurance’s biggest registrar brands shrunk in terms of DUM.

PDR was the biggest loser — actually topping the list of shrinking registrars — shedding over 76,000 gTLD domains, over 10,000 of which was from net transfers.

More consolidation? Endurance said to be up for sale

Kevin Murphy, August 27, 2018, Domain Registrars

Endurance International Group is reportedly up for sale, perhaps the next piece of consolidation or privatization in a rapidly changing domain name market.

Bloomberg, citing unnamed sources, reports today that EIG is “is considering strategic options, including a possible sale”.

EIG owns domain brands Domain.com, BigRock, BuyDomains and ResellerClub, along with a bunch of hosting properties such as HostGator.

Bloomberg’s sources stressed that no final decision has been made, and that the company could remain public.

It’s currently listed on Nasdaq where it has a market cap today of almost $1.38 billion .

The company would be far from the first to change ownership in the last couple of years.

Most recently, Web.com (Network Solutions et al) announced a plan to go private in a $2 billion deal.

A year ago, Neustar went private in a $2.9 billion deal.

In terms of industry consolidation, we’ve more recently seen KeyDrive reverse into CentralNic and MMX buy ICM Registry.

Endurance losing founder-CEO next week

Kevin Murphy, August 16, 2017, Domain Registrars

Endurance International, the parent company of registrar brands including Public Domain Registry, BuyDomains, Domain.com and BigRock, will see its founding CEO resign next week.

The company said this week that Hari Ravichandran will be replaced by Jeff Fox, most recently chair of customer relationship management software vendor Convergys, on August 22.

Endurance, which makes about 12% of its revenue from domain registrations, had disclosed Ravichandran’s plan to move on back in April, when it was characterized as an effort to move the company to the next stage of growth.

But it comes in the context, as the company has acknowledged, of an ongoing Securities and Exchange Commission investigation into its 2015 acquisition of Constant Contact.

The SEC probe has been going on since at least December 2015.

Endurance is also facing flattening top-line growth — revenue of $292.3 million, up 1% on last year, in the second quarter — and deepening losses.

Fox was CEO of Convergys from 2010 to 2012. He is also principal of The Circumference Group, his own investment/advisory firm.

Endurance splashes out $1.1 billion on Constant Contact

Kevin Murphy, November 2, 2015, Domain Registrars

Endurance International is to acquire email marketing company Constant Contact for $1.1 billion.

The $32-a-share cash offer, a 23% premium on Constant Contact’s Friday closing price, has been approved by both boards.

Endurance counts registrars BigRock, Domain.com and ResellerClub among its portfolio of brands, which also includes hosting companies HostGator and BlueHost.

The company said the deal will push its annual revenue to over $1 billion for the first time.

Endurance has acquired over 40 companies in its history, according to CEO Havi Ravichandran, who described M&A activity as a “core competency”.

The deal, which is subject to regulatory and shareholder approval, will be funded with debt.

The company today reported a third-quarter loss of $15.4 million, about double its year-ago loss, on revenue that was up 18% to $188.5 million.

Directi joins Domain.com family in $100m deal

Kevin Murphy, January 29, 2014, Domain Registrars

Endurance International, the holding company behind brands such as Domain.com and HostGator has closed the acquisition of top ten registrar Directi and some related companies.

The acquisition, which was announced last September is worth between $100 million and $110 million — $25.5 million in cash and the rest in shares and a promissory note.

The deal includes Directi properties BigRock (a registrar), ResellerClub (the reseller-focused registrar), LogicBoxes (the registrar management service) and webhosting.info.

It does not include Radix Registry, the company that applied for 31 new gTLDs, 28 of which applications are still active.

Directi CEO Bhavin Turakhia “has agreed to be closely involved in the integration of the two companies”, but it doesn’t sound like he’s taking on a permanent role at Endurance.

Endurance may not be a familiar brand in and of itself, but its businesses include Bluehost, HostGator, Domain.com, FatCow, iPage and Mojo Marketplace.

Domain.com owner files for $400m IPO, to spend $110m buying Directi

Kevin Murphy, September 10, 2013, Domain Registrars

Endurance International, owner of Domain.com and HostGator, plans to raise up to $400 million in a Nasdaq IPO, and said it will spend up to $110 million of that buying Directi, India’s largest domain registrar.

As part of the proposed acquisition, Endurance has also agreed to bankroll Directi’s new gTLD auctions to the tune of $62 million.

The acquisition is not final, and appears to depend on a number of targets related to the IPO and Directi’s revenue performance. Endurance’s S-1 filing with the US Securities and Exchange Commission reads:

In August 2013, we entered into a master share purchase agreement to acquire all of the outstanding capital stock of Directi from Directi Holdings, the seller, for an amount we estimate will be between $100 million and $110 million in cash or, at the election of the seller, a combination of cash and shares of our common stock, subject to the satisfaction or waiver of specified customary closing conditions and the achievement of specified financial targets.

The acquisition would close in the fourth quarter this year.

As well as running a top-ten registrar (and a few dozen others), Directi subsdiary Radix Registry has 29 active new gTLD applications, 26 of which are contested.

Endurance proposes to help Radix win these contention sets. On new gTLD auctions, the S-1 says:

in connection with our proposed acquisition of Directi, we entered into agreements with entities affiliated with Directi Holdings related to participation in the auction of new top level domain extensions and domain monetization activities, pursuant to which, among other things, we may be obligated to make aggregate cash payments of up to a maximum of approximately $62 million, subject to specified terms, conditions and operational contingencies.

Endurance is a complicated company. Its most familiar brands include Domain.com, iPage, FatCow, Homestead, Bluehost, HostGator, A Small Orange, iPower and Dotster.

But since December 2011 it has been controlled and majority owned by Warburg Pincus and Goldman Sachs, which paid a reported $975 million.

Its annual revenue for the last three calendar years has been $87.8 million, $190.3 million and $292.2 million. It’s currently not profitable, recording a net loss of $139.2 million in 2012.

It has seven million domains under management and had 3.4 million customers at the end of June 2013.

Judging by the S-1, the company has over a billion dollars of debt. Directi acquisition excluded, most of its IPO proceeds would go towards paying off some of that debt.