Latest news of the domain name industry

Recent Posts

Lockdown bump sees GoDaddy double customer gains in 2020

Kevin Murphy, February 16, 2021, Domain Registrars

GoDaddy almost doubled its rate of customer acquisition in 2020, compared to 2019, as pandemic-related lockdown measures pushed more small businesses online.

The company last week reported that it added 1.4 million customers last year, a 7% year-on-year growth but almost double the number it added the previous year.

It ended the year with 20.6 million customers, up from 19.3 million 12 months prior.

Recognizing that coronavirus restrictions in various parts of the world were increasing demand for domains, hosting and related services, the market-leading registrar upped its marketing spend to make sure it captured as many customers as possible.

It spent $438.5 million on marketing last year, up from $345.6 million in 2019.

Its full-year revenue from domains grew from $1.35 billion to $1,51 billion. Including its other segments, company revenue was up to $3.31 billion from $2.98 billion, an 11% increase.

Domains revenue for the fourth quarter was $402.2 million, up 14.2% on Q4 2019. Total revenue for the quarter was $873.9 million, up 12.0%.

MMX vows to refocus under new boss after crappy 2020

Kevin Murphy, January 25, 2021, Domain Registries

MMX says it plans to refocus its business on higher-margin products after a 2020 marred by plummeting registrations, product delays and financial irregularities that led to senior management being oustered.

The new gTLD registry also revealed that it laid off 20% of its staff in a “right-sizing” exercise last year. Due to its modest size, this means about four or five people lost their jobs.

The company said today that acting CEO Tony Farrow has been confirmed for the job full-time, and that he will join the board of directors after regulatory checks.

Farrow took over last October, when CEO Toby Hall and CFO Michael Salazar were both ejected after admitting to over-stating MMX’s revenue and profit in 2019.

Now, Farrow says MMX will spend 2021 focusing on “quality” regs — those with a higher chance of renewing or with higher-margin reg fees — and on its AdultBlock services, which block trademarks and typos across its four porn-themed gTLDs.

Overall domains under management declined 19% in 2020, which appears to be almost entirely down to .vip, a cheap gTLD that initially performed strongly with Chinese speculators, losing about half a million names.

AdultBlock, which covers the old ICM Registry portfolio, launched at the end of 2019 with a high price tag and a couple bulk sales, but stalled during 2020. MMX blames this for a 3% decline in overall billings last year.

The company also hinted that it may try to offload some of its crappier gTLDs, saying:

The new executive team is also reviewing the contribution received from each of its TLDs and the growth prospects for each from new sales initiatives to ensure the carrying values associated with each TLD is appropriate going forward.

Farrow said in a news release:

Our FY 2021 plan will focus on AdultBlock sales, extensive release of inventory to the market, quality registrations with the view of future renewal revenue and standardized promotions for our channel partners. It is a straightforward business where focus must remain on the quality of our domain registrations and promotions with our channel partners. We lost some of the momentum after the initial launch of AdultBlock in FY 2019. However, FY 2021 was always the target year for the full rollout of this new product, and I am encouraged by the dialogue with our channel partners to really move AdultBlock in FY 2021.

AdultBlock, which sets trademark-match domains aside as non-resolving reserved names, launched with a price tag of between $349 and $799 per trademark per year.

MMX separately announced today that it is paying ICM Registry’s investors, primarily founder Stuart Lawley, over alleged (and denied) breaches of unspecified warranties made at the time of the acquisition in May 2018.

Farrow was COO of ICM from the 2011 launch of .xxx until the MMX acquisition.

.org made $97 million last year

Kevin Murphy, December 2, 2020, Domain Registries

Public Interest Registry has published its 2019 tax returns, revealing a top line of $97.1 million.

That’s a tad under the $101.1 million it reported for 2018, presumably due to the declining number of .org domains under management.

It lost roughly 200,000 names in 2019, bottoming out at 10.4 million, though it has since recovered in 2020.

The returns also reveal that back-end provider Afilias was paid $18.3 million for its trouble, and ICANN was paid $2.6 million in fees.

The Internet Society, which owns PIR and uses it for most of its funding, was paid $67.5 million, up from the $48.7 million given in 2018.

The form also list the salary and bonuses for 20-odd staffers and directors, for the salary voyeurs among you.

NameSilo in profit as sales rise 11%

Kevin Murphy, December 1, 2020, Domain Registrars

Canadian registrar NameSilo today reported a profit for the third quarter, as bookings increased 11% sequentially over the three months to September 30.

One of the fastest-growing registrars, the company said that as of today it has 3.54 million domains under management, up from the 3.45 million it reported at the start of September.

NameSilo said its revenue for the quarter was $8.07 million, up 2.8% on Q3 2019. Its net income was $2,72 million, compared to a net loss of $753,093 a year earlier.

Much of the net income was attributable to income on investments, the firm said.

Bookings, which represents the number of domains sold but not yet recognized as revenue for accounting purposes, was up 11% compared to Q2 at $8.4 million.

CentralNic more than doubles revenue as parking business thrives

Kevin Murphy, November 30, 2020, Domain Registrars

CentralNic today reported revenue growth of 118% for the nine months to September 30, largely on the back of its recently acquired domain monetization business.

The company said it made a net loss after tax of $6.2 million, compared to $6 million, on revenue of $168.5 million.

Still casting itself as the domain industry’s consolidator, most of the growth came due to acquisitions made over the last couple of years, so CentralNic has also published pro forma results to give a better sense of organic growth.

On that basis, revenue was up a still-decent 17%.

The acquisition of Team Internet, which offers the ParkingCrew and Tonic monetization services, for $48 million just over a year ago was the biggest booster of growth.

Pro forma, CentralNic’s monetization segment was up 39% to $72.9 million in revenue, mostly due to a whopping 36% increase in RPMs.

Ninety-two percent of its monetization revenue comes from a single customer.

CentralNic’s indirect segment, which unhelpfully bundles together its registrar reseller channel with its registry service provider operation and .sk registry operator business, was up 51% to $63.5 million and up 8% to $65.2 million pro forma.

The company said the growth was mostly due to the acquisitions of TPP Wholesale and Hexonet Group last year.

The direct segment, which comprises its retail registrars as well as software and consultancy, dipped by 9% to $32.1 million, or 2% to $31.8 million pro forma.

GoDaddy sees 12% growth in domains revenue

Kevin Murphy, November 5, 2020, Domain Registrars

GoDaddy delivered another quarter of impressive growth in the third quarter, showing again the resilience of the domain name market to the coronavirus pandemic.

The company reported total revenue up 11% on the same period last year at $844.4 million, with net income sliding from $76.8 million to $65.1 million.

GoDaddy spent more on marketing during the quarter, saying that as demand for its services increases it needs to make sure it captures as many customers as possible.

Revenue from domains slightly outperformed overall growth, coming in at $387.4 million, up 12.2% year over year.

The domains segment was also a bit more profitable because GoDaddy no longer has to pay Neustar for domains in TLDs managed by what is now GoDaddy Registry.

The business applications segment, which includes email and third-party apps such as shopping carts, was the standout growth segment, coming in at $154.6 million, up 18.7%.

GoDaddy expects to see a similar pattern in Q4, with domains growth coming in at low double figures and business apps growth coming in at high double figures.

Both Q3 growth and Q4 outlook were better than analysts expected, and GoDaddy stock was rewarded accordingly.

The company also announced the departure of COO Andrew Low Ah Kee after 10 years with the company. His position will not be immediately refilled, and he is said to be taking a presidential role at a company outside of the domain industry.

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

Kevin Murphy, November 3, 2020, Domain Registrars

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.

Blood on the boardroom floor after MMX admits revenue screwup

Kevin Murphy, October 30, 2020, Domain Registries

MMX’s top two execs are out, after the new gTLD registry admitted that the company misstated its revenue in 2019 and the first half of 2020.

CEO Toby Hall and CFO Michael Salazar both quit from the board and their executive roles with immediate effect, after a board probe concluded that its 2019 revenue was overstated to the tune of $1.7 million. Its 2019 net income was also overstated by $1.9 million.

In the first half of 2020, it understated revenue by about $80,000 and net income by about $200,000.

The screwups relate to not only the mystery $1.1 million contract MMX warned about earlier this month, but also two more contracts last year worth a total of $790,000.

The company received the cash from these unnamed partners and reported it as revenue immediately, when it should have recognized it only when the partners made sales to end users, MMX said.

Its revenue for 2019 should have been correctly reported as $17.2 million, and its net income should have been $2.8 million.

For the first half of 2020, revenue should have been $8.4 million and net income should have been $1.4 million.

The company said that Tony Farrow, an ICM Registry import who until recently worked as MMX’s COO, will return to the company as interim CEO.

Bryan Disher, an independent MMX director, will be interim CFO. Guy Elliott, currently non-executive chair, will become executive chair.

Lockdown bump was worth $600,000 to ICANN, but end of Club Med saves 10x as much

Kevin Murphy, October 19, 2020, Domain Policy

The coronavirus pandemic lockdowns and the resulting bump in domain name sales caused ICANN’s revenue to come out $600,000 ahead of expectations, up 4%, the org disclosed last week.

But ICANN saved almost 10 times as much by shifting two of its fiscal year 2020 public meetings to an online-only format, due to travel and gathering restrictions.

The organization’s FY20 revenue was $141 million, up by $5 million on FY19, against a rounded projection of $140 million. ICANN’s financial years end June 30.

ICANN said it is “uncertain if these market trends will continue”.

Back in April, the organization lowered its revenue forecast for FY21 by 8%, or $11 million.

Expenses were down $11.1 million at $126 million, 8% lower that expectations and $4 million lower than the 2019 number.

That was mostly due to a $6.2 million saving from having two public meetings online-only.

ICANN typically spends $2 million per meeting funding over 500 travelers, both ICANN staff and community members, but that was down to almost nothing for the first two meetings of this year.

Pre-pandemic, ICANN expected these meetings, slated for Cancun and Kuala Lumpur, to cost $4.2 million and $3.4 million respectively, but the switch to Zoom brought them in at $1.4 million and $0.4 million.

ICANN would have occurred some pre-meeting travel expenses for the Cancun gathering, which was cancelled at the last minute, as well as cancellation fees on flights and hotels.

The org has previously stated that the switch away from face-to-face meetings could save as much as $8 million this calendar year.

The rest of the savings ICANN chalked down to lower-than-expected personnel costs, with hiring slowing during the pandemic.

Incidentally, if you’re wondering about the headline above, it’s a reference to a notorious 2009 WSJ article, and outrage about ICANN’s then $12 million travel budget.

Eleven years later, the FY20 travel budget was $15.7 million.

CentralNic parking boosts revenue even as its registrars suffer

Kevin Murphy, September 2, 2020, Domain Registrars

CentralNic reported what it called “outstanding” first-half financial results yesterday, with growth from its new parking business more than offsetting a decline in its registrar business.

The company reported H1 revenue of $111.1 million, up 124% year over year. Adjusted EBITDA was up 64% to $15.1 million.

But these remarkable numbers were driven primarily by acquisitions — CentralNic made four in the second half of last year. Its estimated organic growth was more modest.

On an apples-to-apples basis, revenue was up 18% and adjusted EBITDA was up 16%.

The company has reorganized how it reports its various segments into “direct”, “indirect” and “monetization”. Two of those segments grew while one shrank.

The direct segment, which basically means CentralNic’s collection of retail registrars, saw revenue down 11% at $21.6 million, but a lot of that was due to rejiggering the reporting segments. Apples-to-apples, revenue was down 1% at $20.9 million.

Indirect, which bundles together its wholesale registrars, registry and registry back-end services, saw revenue up 62% at $41.2 million. Apples-to-apples, the growth was 9%.

But the standout performer was the new monetization segment — domain parking, which became a big deal after CentralNic acquired German outfit Team Internet last year — which saw revenue up 38% at $48.5 million.

The one worryingly dark spot in this segment is the fact that one customer is responsible for over 92% of revenue.