Web.com has acquired dozens of registrars from rival/partner Rightside, seemingly to boost the success rate of its SnapNames domain drop-catching business.
I’ve established that at least 44 registrars once managed by Rightside/eNom have moved to the Web.com stable in recent weeks, and that might not even be the half of it.
All of the registrars in question are shell companies used exclusively to register pre-ordered names as they are deleted by registries, usually Verisign.
The more registrars you have, the more EPP connections you have to the Verisign registry and the better your chance at catching a domain.
Web.com runs SnapNames, and is in a 50-50 partnership with Rightside on rival drop-catcher NameJet.
The two compete primarily with NameBright’s DropCatch.com, which obtained hundreds of fresh ICANN accreditations last year, bringing its total pool to over 750.
Web.com has fewer than 400 accreditations right now. Rightside has even fewer.
It’s usually quicker to buy a registrar than to obtain a new accreditation from ICANN.
If Web.com finds itself in need of more accreditations in order to compete, and Rightside is happy to let them go, it could be possible to infer that SnapNames is doing rather better in terms of customer acquisition than NameJet.
But the two services recently announced a partnership under which names grabbed by either network would be placed in an auction in which customers of either site could participate.
This would have the effect of increasing the number of caught names going to auction due to there being multiple bidders, and thus the eventual sales prices.
Rightside used its first quarter earnings call yesterday to address, albeit indirectly, some of the criticisms recently leveled at it by activist investors and competitors.
CEO Taryn Naidu revealed for the first time how the company sees the new gTLD market playing out in the longer term.
He said than in three to five years, Rightside expects annual revenue from its registry business to come it at $50 million to $75 million.
That’s a hell of a lot more than it makes today.
In the first quarter, registry revenue was $2.6 million, compared to $1.6 million a year ago. Annualized, that’s a shade over $10 million.
On the back of an envelope, Rightside seems to need roughly 50% growth per year over five years to hit the low end of its target.
Naidu told analysts that one factor built into this projection is that third-party registrars will start to sell just as many new gTLD domains as Rightside’s registrars do.
Currently, Rightside sees 15% to 20% new gTLD, but with others it’s 3% to 5%, he said.
Naidu said he expects margins to be 20% at the EBITDA level.
The revelation of these targets may go some way to address investor concerns that Rightside is putting too much effort into its new gTLD business at the expense of its cash-generating registrars.
Naidu last night also addressed concerns about eNom, which Cannell had called a “time capsule” due to its aging user experience.
He admitted that eNom is “encumbered by some older technology” but said it was being fixed.
“Later this quarter we will be rolling out the first phase of our development efforts, which include a dramatically revamped user interface, a new suite of software development tools and a new developer hub to help our partners learn, develop and test faster,” he said.
The registrar business brought in $44 million in the quarter, up from $41.9 million. Aftermarket revenue was $9.3 million compared to $7.3 million.
Overall, revenue was up 9% at $55.1 million, with a net loss of $5.1 million. That compared to income of $1.9 million a year ago.
Naidu also seemed to obliquely address the criticism that a lot of Rightside’s new gTLDs are shit — .democrat, .dance, .army, .navy, and .airforce have been singled out by Cannell and others — by talking about how the company doesn’t necessarily put the same amount of effort into marketing its whole stable.
Some gTLDs will be marketed more heavily later, he said, comparing it to a real estate owner holding on to parcels of land for later development.
Naidu also talked up Rightside’s prospects in China, where apparently .pub is doing quite well because registrants think it means “public” rather than “drinking establishment”.
A hedge fund manager known for causing trouble at the companies he invests in has savaged Rightside, saying its focus on new gTLDs at the expense of its registrar business is ruining the company.
J Carlo Cannell of Cannell Capital is looking for some serious bloodletting.
He wants Rightside to cut 20% of its staff, close offices, unify its products under the eNom brand and replace two of its directors.
He’s threatening to wage a proxy war to replace the Rightside board if he doesn’t get what he wants.
He wrote a scathing letter to Rightside chair Dave Panos last month, which was published in a Securities and Exchange Commission filing today.
NAME’s registrar has become like a crazy aunt kept in the basement, one that you refuse to adequately clothe or feed, but who steadfastly spins straw into gold used to subsidize a stable of largely substandard new GTLDs such as .democrat, .dance, .army, .navy, and .airforce. Most of these new GTLDs are irrelevant and will never be sold in material volumes. NAME is holding back the growth potential of your registrar by pushing garbage extensions to a user base that quietly knows better.
NAME is Rightside’s Nasdaq ticker symbol.
Cannell revealed he owned a 7% share of Rightside last month — paying reportedly just shy of $11 million for 1,389,953 shares.
He wants Rightside to sell off “or even abandon” some of its weaker gTLDs, which “should not consume all the resources of our Company at the expense of the assets that are currently profitable”, while keeping “gems” such as .news.
His letter doesn’t pull any punches.
Cannell is perhaps best known for his widely publicized tussle with Jim Cramer, TV show host and co-founder of financial news site TheStreet.
Rightside registrar eNom is to offer domains in several Rightside gTLDs for $0.99 over the coming days.
Today, .rocks domains can be obtained for the special price. They’re usually $12.99 a year.
The price does not apply to renewals. Customers have to use the promo code “pocketchange”.
Rightside stablemates .forsale, .reviews, .ninja and .social will get the $0.99 treatment for one day each over the coming week.
As we’ve learned over the last several months, super-cheap domains boost TLDs’ numbers as some of the internet’s less than ethical characters bulk-register thousands of throwaway domains at once.
So far, gTLDs such as .xyz, .country and .kim have been affected by these spikes, which I currently believe are related to typosquatting campaigns in legacy gTLDs.
I would not be at all surprised if Rightside becomes the latest registry to see its volume swell for similar reasons.
Google has accidentally revealed registrant contact information for 282,867 domain names that were supposed to be protected by a privacy service.
The bug reportedly affected 94% of the 305,925 domains registered via Google Apps, an eNom reseller.
The glitch was discovered by Cisco and reported to Google February 19. It has since been fixed and customers were notified yesterday.
Google acknowledged in an email to customers that the problem was caused by a “software defect in the Google Apps domain renewal system”.
It seems that anyone who acquired a domain with privacy through Google Apps since mid-2013 and has since renewed the registration will have had their identities unmasked in Whois upon renewal.
Names, addresses, emails and phone numbers were revealed.
Due to services such as DomainTools, which cache Whois records, there’s no putting the genie back in the bottle. The information is out there for good now.
It’s a pretty major embarrassment for Google, which recently launched its own registrar.