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Bad.monster? Two more gTLDs have been acquired

Kevin Murphy, November 14, 2018, Domain Registries

Two more new gTLDs have changed hands, DI has learned.

XYZ.com has picked up former dot-brand .monster from recruitment web site Monster.com, while newbie registry Intercap Holdings has acquired .dealer from Dealer.com.

Both ICANN contracts were reassigned last month.

Neither acquiring company has announced their purchases or published their launch plans yet.

That said, XYZ has already registered a few intriguing domains: bad.monster, good.monster, my.monster and go.monster.

It appears that go.monster — slogan: “It’s Alive!” — will be the registry’s launch site. It’s the only one I could get to resolve.

It’s the second example I can think of of a dot-brand gTLD being acquired by a registry that intends to run it as a generic.

In 2016, Top Level Spectrum acquired .observer from the newspaper of the same name.

Most dot-brands that don’t want their TLDs any more choose to retire them. That number is up to 45 now.

.dealer wasn’t technically a dot-brand — it had no Spec 13 in its contract — but its 2012 application certainly made it look like a dot-brand, with most of the domains reserved for Dealer.com and its affiliates. It looked defensive.

Shayam Rostam, chief registry officer of ICH, told me the plan for .dealer is to primarily target car dealers (also its former owner’s market) but that it will be unrestricted and open to all comers.

Intercap wants to get its January launch of .inc out of the way before turning its attention to .dealer, so we’re probably looking at mid-late 2019 for a launch, Rostam said.

It also needs to do some housekeeping such as moving the TLD to Uniregistry’s back-end.

What do y’all think about these TLDs? Could .monster be the next .guru? Could .dealer find a home in the burgeoning legal cannabis market? Comment below!

First non-brand gTLD to go dark

Kevin Murphy, November 14, 2018, Domain Registries

The number of new gTLDs to voluntarily terminate their ICANN contracts has hit 45, with the first non-brand calling it quits.

It’s a geo-gTLD, .doha, which was meant to represent the Qatari capital of Doha.

There were no registered domains. Despite being delegated in March 2015, it never launched.

The registry was the country’s Communications Regulatory Authority, which also runs local ccTLD .qa.

No reason was given for the request — registries are allowed to terminate their contracts for any reason, with notice.

The registry’s web site hasn’t been updated in some time, so perhaps resources are an issue.

Given Doha is a protected geographic term, it’s unlikely to return in future unless the government changes its mind in future application rounds.

Dot-brand gTLDs to go the same way since I last reported the number include .blanco, .spiegel, .bond, .epost, .active and .zippo.

Two controversial new gTLDs launching in January

Kevin Murphy, November 13, 2018, Domain Registries

Five years after the first batch of new gTLDs hit the market, registries continue to drip-feed them into the internet.

At least two more are due to launch on January 16 — .dev and .inc.

.dev is the latest of Google’s portfolio to be released, aimed at the software developer market.

It proved controversial briefly when it first was added to the DNS in 2014, causing headaches for some developers who were already using .dev domains on their private networks.

Four years is plenty of time for all of these collisions to have been cleaned up, however, so I can’t imagine many problems emerging when people start buying these names.

.dev starts a one-month sunrise January 16, sells at early access prices from February 19 to 28 before going to regular-price general availability.

Google has already launched one of its own products, web.dev, a testing tool for web developers, on a .dev domain.

Launching with a pretty much identical phased launch plan is .inc, from new market entrant Intercap Holdings, a Caymans-based subsidiary of a Toronto firm founded by .tv founder Jason Chapnik and managed by .xyz alumnus Shayan Rostam.

Intercap bought the .inc contract from Edmon Chong’s GTLD Limited earlier this year for an undisclosed sum. GTLD Ltd is believed to have paid in excess of $15 million for the TLD at auction.

.inc has proved controversial in the past, attracting criticism from states attorneys general in the US, which backed another bidder.

It may prove controversial in future, too. I have a hunch it’s going to attract more than its fair share of cybersquatters and will probably do quite well out of defensive registration fees.

Will ICANN take a bigger slice of the .com pie, or will .domainers get URS?

Kevin Murphy, November 5, 2018, Domain Registries

Will ICANN try to get its paws on some of Verisign’s .com windfall? Or might domainers get a second slap in the face by seeing URS imposed in .com?

With Verisign set to receive hundreds of millions of extra dollars due to the imminent lifting of .com price caps, it’s been suggested that ICANN may also financially benefit from the arrangement.

In a couple of blog posts Friday, filthy domain scalper Andrew Allemann said that ICANN will likely demand higher fees from Verisign in the new .com registry agreement.

Will it though? I guess it’s not impossible, but I wouldn’t say it’s a certainty by any means.

Verisign currently pays ICANN $0.25 per transaction, the same as almost all other gTLDs. Technically, there’s no reason this could not be renegotiated.

Putting aside some of the legacy gTLD contracts, I can only think of two significant cases of ICANN imposing higher fees on a registry.

The first was .xxx, which was signed in 2011. That called for ICM Registry, now part of MMX, to pay $2 per transaction, eight times the norm.

The rationale for this was that ICANN thought (or at least said it thought) that .xxx was going to be a legal and compliance minefield. It said it envisaged higher costs for overseeing the then-controversial TLD.

There was a school of thought that ICANN was just interested in opportunistically boosting its own coffers, given that ICM was due to charge over $60 per domain per year — at the time a ludicrously high amount.

But risk largely failed to materialize, and the two parties last year renegotiated the fees down to $0.25.

The second instance was .sucks, another controversial TLD. In that case, ICANN charged registry Vox Populi a $100,000 upfront fee and per-transaction fees of $1 per domain for the first 900,000 transactions, four times more than the norm.

While some saw this as a repeat of the .xxx legal arse-covering tactic, ICANN said it was actually in place to recoup a bunch of money that Vox Pop owner Momentous still owed when it let a bunch of its drop-catch registrars go out of business a couple years earlier.

While the .sucks example clearly doesn’t apply to Verisign, one could make the case that the .xxx example might.

It’s possible, I guess, that ICANN could make the case that Verisign’s newly regained ability to raise prices opens it up to litigation risk — something I reckon is certainly true — and that it needs to increase its fees to cover that risk.

It might be tempting. ICANN has a bit of a budget crunch at the moment, and a bottomless cash pit like Verisign would be an easy source of funds. A transaction fee increase of four cents would have been enough to cover the $5 million budget shortfall it had to deal with earlier this year.

On the other hand, it could be argued that ICANN demanding more money from Verisign would unlevel the playing field, inviting endless litigation from Verisign itself.

ICANN’s track record with legacy gTLDs has been to reduce, rather than increase, their transaction fees.

Pre-2012 gTLDs such as .mobi, .jobs, .cat and .travel have all seen their fees reduced to the $0.25 baseline in recent years, sometimes from as high as $2.

In each of these cases, the registries concerned had to adopt many provisions of the standard 2012 new gTLD registry agreement including, controversially, the Uniform Rapid Suspension service.

Domainers hate the URS, which gives trademark owners greater powers to take away their domains, and the Internet Commerce Association (under the previous stewardship of general counsel Phil Corwin, since hired by Verisign) unsuccessfully fought against URS being added to .mobi et al over the last several years, on the basis that eventually it could worm its way into .com.

I’m not suggesting for a moment that ICANN might reduce Verisign’s fees, but what if URS is the price the registry has to pay for its massive .com windfall?

It’s not as if Verisign has any love for domainers, despite the substantial contribution they make to its top line.

Since the NTIA deal was announced, it’s already calling them “scalpers” and driving them crazy.

ICA lost the .com price freeze fight last week, could it also be about to lose the URS fight?

Trump gives Verisign almost $1 billion in free money

Kevin Murphy, November 5, 2018, Domain Registries

The Trump administration may have just handed Verisign close to $1 billion in free money.

That’s according to the back of the envelope I’m looking at right now, following the announcement that the National Telecommunications and Information Administration is reinstating Verisign’s right to increase .com registry fees.

As you may have read elsewhere already (I was off sick last week, sorry about that) a new amendment to the Verisign-NTIA Cooperative Agreement restores Verisign’s ability to raise prices by 7% per year in four of the six years of the deal.

The removal of the Obama-era price freeze still needs to be incorporated into Verisign’s ICANN contract, but it’s hard to imagine ICANN, which is generally loathe to get into pricing regulation, declining to take its lead from NTIA.

Verisign would also have to choose to exercise its option to increase prices in each of the four years. I think the probability of this happening is 1 in 1.

Layering this and a bunch of other assumptions into a spreadsheet, I’m coming up with a figure of roughly an extra $920 million that Verisign will get to add to its top line over the next six years.

Again, this isn’t an in-depth study. Just back-of-the-envelope stuff. I’ll talk you through my thinking.

Not counting its occasional promotions, Verisign currently makes $7.85 for every year that a .com domain is added or renewed, and for every inter-registrar transfer.

In 2017, .com saw 40.89 million add-years, 84.64 million renew-years and 3.79 million transfers, according to official registry reports.

This all adds up to 129,334,643 revenue events for Verisign, or just a tad over $1 billion at $7.85 a pop.

Over the four-year period of the price increases transaction fees will go up to $8.40, then $8.99, then $9.62, then $10.29. I’m rounding up to the nearest penny here, it’s possible Verisign may round down.

If we assume zero transaction growth, that’s already an extra $762.2 million into Verisign’s coffers over the period of the contract.

But the number of transactions inevitably grows each year — more new domains are added, and some percentage of them renew.

Between 2016 and 2017, transaction growth was 3.16%.

If we assume the same growth each year for the next six years, the difference between Verisign’s total revenue at $7.85 and at the new pricing comes to $920 million.

Verisign doesn’t have to do anything for this extra cash, it just gets it.

Indeed, the new NTIA deal is actually less restrictive on the company. It allows Verisign to acquire or start up an ICANN-accredited gTLD registrar, something it is currently banned from doing, just as long as that registrar does not sell .com domains.

Verisign’s .net contract also currently bans the company from owning more than 15% of a registrar, so presumably that agreement would also need to be amended in order for Verisign to get into the registrar business.

I say again that my math here is speculative; I’m a blogger, not a financial analyst. There may be some incorrect assumptions — I’ve not accounted for promotions at all, for example, and the 3.16% growth assumption might not be fair — and there are of course many variables that could move the needle.

But the financial markets know a sweetheart deal when they see one, and Verisign’s share price went up 17.2% following the news, reportedly reaching heights not seen since since the dwindling days of the dot-com bubble 18 years ago.

The reason given for the lifting of the price freeze was, for want of a better word, bullshit. From the NTIA’s amendment:

In recognition that ccTLDs, new gTLDs, and the use of social media have created a more dynamic DNS marketplace, the parties agree that the yearly price for the registration and renewal of domain names in the .com registry may be changed

Huh?

This seems to imply that Verisign has somehow been disproportionately harmed by the rise of social media, the appearance of new gTLDs and some unspecified change in the ccTLD marketplace.

While it’s almost certainly true that .net has taken a whack due to competition from new gTLDs, and that the domain marketplace overall may have been diminished by many small businesses spurning domains by choosing to set up shop on, say, Facebook, .com is still a growing money-printing machine with some of the fattest margins seen anywhere in the business world and about a 40% global market share.

If the Trump administration’s goal here is to make some kind of ideological statement about free markets, then why not just lift the price caps altogether? Give Verisign the right to price .com however it pleases?

Or maybe Trump just wants to flip the bird to Obama once more by reversing yet another of his policies?

Who knows? It doesn’t make a lot of sense to me.