Registrar giant created as Web.com merged with Endurance

Clearlake Capital Group, which has taken Endurance International private and recently took a big stake in Web.com, has merged the two registrar stables to create a new company it’s calling Newfold Digital.

By my reckoning, Newfold has probably become the second-largest registrar group by domains under management, with around 16.5 million gTLD names across just its best-known half-dozen brands, leapfrogging Namecheap and Tucows in the registrar league table.

That number’s probably a big understatement. It doesn’t capture ccTLDs and does not take into account that the company now has hundreds of active ICANN accredited registrars, largely due to Web.com’s drop-catching business.

Its best-known registrar brands are Register.com, Network Solutions, Domain.com, BuyDomains, BigRock, PublicDomainRegistry and CrazyDomains. Its BlueHost and HostGator brands are both pretty big deals in web hosting.

Clearlake says Newfold has 6.7 million customers worldwide.

The privatization of Endurance, which sees it delisted from the Nasdaq stock exchange, was announced in November and cost Clearlake $3 billion. The value of its Web.com stake, which it acquired last month, was not disclosed.

Siris Capital, which bought Web.com in 2018, continues to have a stake.

Newfold will be led by two Web.com execs — CEO Sharon Rowlands and CFO Christina Clohecy.

The deal follows Web.com’s unsuccessful attempt to buy Webcentral last year.

There’s no word on (presumably inevitable) layoffs as the two companies come together.

Another domain firm going private as Endurance announces $3 billion deal

Endurance International, owner of registrar brands including Domain.com, BigRock and BuyDomains, plans to go private in a $3 billion private equity deal.

The buyer is Clearlake Capital group, in what appears to be its first foray into the domain name market.

It has offered to pay $9.50 for each Endurance share, saying it’s a 79% premium on the closing price the day before the media first got a whiff of a deal being in the works back in September and a 64% premium on Friday’s close.

The deal is still subject to shareholder approval, but Endurance says institutional investors accounting for 36% of its shares have already promised to vote in favor.

Endurance yesterday also announced its third-quarter financial results. It reported net income down from $7.8 million to $6.7 million, on revenue that was up 3% at $278.4 million.

The company does not break out what portion of its revenue or profit comes from domains. Hosting and web marketing services are also a big part of its business.

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.

I was wrong, rejected “racist” web site didn’t go to Epik

Vdare.com, the domain for a US-based right-wing news blog that was jettisoned from Network Solutions last week under a cloud of racism allegations, did not, as expected, wind up at Epik.

Rather, Whois records reveal that the domain is now under the wing of PublicDomainRegistry.com, a unit of Endurance, having been transferred at the weekend.

Perhaps ironically, PDR is based in India, where white supremacy has been out of style for many decades. How very patriotic.

Unlike NetSol, PDR does not have an explicit ban on racist content in its acceptable use policy.

But Vdare’s editors think there’s a risk they’ll be moved on again, regardless, writing:

The number of ICANN accredited registrars has shrunk significantly in recent years as a result of consolidation. Many consumer-level registrars are not independent, but repackage services from larger companies. These larger companies are increasingly Woke. So while an individual registrar retailer may claim a freedom of speech mission-oriented corporate value, they operate solely at the pleasure of their supply chain.

In other words, we don’t know how long we’ll be tolerated by the new registrar either.

NetSol ejected Vdare earlier this month under pressure from civil rights groups in the wake of the reemergence of the Black Lives Matter movement and worldwide anti-racism protests.

Vdare in unapologetically anti-immigration and has described its role as to “defend the interests of American whites”, which has led to allegations of a white supremacist agenda.

I’d predicted that its domain would be welcomed by Epik, which has built up a bit of a reputation for working with domains kicked out of other registrars.

But when you’re wrong, you’re wrong, and I was wrong, at least for now.

GoDaddy, PorkBun and Endurance win domain “blocking” court fight

Three large registrar groups last week emerged mostly victorious from a court battle in which a $5.4 billion-a-year consumer goods giant sought to get domains being used in huge scam operations permanently blocked.

Hindustan Unilever, known as HUL, named Endurance, GoDaddy and PorkBun in a lawsuit against unknown scammers who were using cybersquatted domains to rip off Indians who thought they were signing up to become official distributors.

The .in ccTLD registry, NIXI, was also named in the suit. All of the domains in question were .in names.

Among other things, HUL wanted the registrars to “suspend and ensure the continued suspension of and block access to” the fraudulent domains in question, but the judge had a problem with this.

He’d had the domain name lifecycle explained to him and he decided in a June 12 order (pdf) that it was not technically possible for a registrar to permanently suspend a domain, taking into account that the registration will one day expire.

He also defined “block access to” rather narrowly to mean the way ISPs block access to sites at the network level, once again letting the registrar off the hook.

Judge GS Patel of the Bombay High Court wrote:

Any domain name Registrar can always suspend a domain that is registered. But the entire process of registration itself is entirely automated and machine-driven. No domain name registrar can put any domain names on a black list or a block list.

Where he seems to have messed up is by ignoring the role of the registry, where it’s perfectly possible for a domain name to be permanently blocked.

NIXI may not have its hands directly on the technology, but .in’s EPP registry is run by back-end Neustar (now owned by GoDaddy but not directly named in the suit), which like all gTLD registries already has many thousands of names permanently reserved under ICANN’s direction.

Patel also seems to assume that NIXI doesn’t get paid for the domain names its registrar sells. He wrote:

The relief against Defendants Nos. 14 and 15, the dot-IN registry and NIEI [NIXI] at least to the extent of asking that they be ordered to de-register or block access is misdirected. Neither of these is a registrar. Neither of these receives registration consideration. Neither of these registers any domain name. The reliefs against them cannot therefore be granted.

NIXI actually charges INR 350 ($4.60) per second-level .in name per year, of which a reported $0.70 goes to Neustar.

The judge also ruled that the registrars have to hand over contact information for each of the cybersquatters.

He also ordered several banks, apparently used by the scammers, to hand over information in the hope of bringing the culprits to justice.

US officials gunning for coronavirus domains

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

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

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

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

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.