Corporation Service Company has acquired Melbourne IT’s flagship digital brand management service for a ridiculously expensive AUD 152.5 million ($157m).
The shock news takes Melbourne out of the high-margin defensive registration and brand monitoring market, leaving it as a basic domain registrar focused on small businesses.
For CSC, the deal leaves it with a considerably strengthened hand in the DBS space, which is poised to benefit from the massive influx of new gTLDs over the next few years.
It also means that all of the over 100 new gTLD applications Melbourne was supporting as a consultant will now be managed by CSC.
The price of AUD 152.5 million is far more than Melbourne IT could have hoped to ask for, equal to almost its entire market capitalization of AUD 160 million.
Melbourne has had a rocky time on the markets of late, and had previously disclosed that it was looking to sell off some units in order to appease shareholders and rationalize its business.
But DBS was considered a core business, bigger now than Melbourne’s regular domains business, and likely not for sale. CSC’s high-premium offer was too good, it seems, to be responsibly refused.
“While this was not a business that we had specifically earmarked for sale, given the value creation provided by the transaction, this was an opportunity which could not be ignored,” CEO Theo Hnarakis, said in a statement.
The deal follows the sale of MarkMonitor, a key Melbourne competitor, to Thomson Reuters last July. When it comes to brand protection in the domain name space, it’s a big boy’s game nowadays.
Melbourne will remain a domain registrar with over four million names under management.
The DBS business was formed in 2008, largely as a result of Melbourne’s purchase of Verisign’s brand services division for $50 million.
Thomson Reuters has acquired the corporate brand-protection registrar MarkMonitor for an undisclosed sum.
MarkMonitor will be absorbed into its new owner’s Intellectual Property & Science business unit, giving it a ready-made and pretty strong domain name management capability.
San Francisco-based MarkMonitor has almost 700,000 domain names in gTLDs under management and says it has over half of the Fortune 100 as clients and over 400 employees.
Thomson Reuters is one of the world’s leading providers of business information with annual revenue approaching $14 billion.
As an aside, I predicted back in October 2011 that MarkMonitor was about ready to be acquired, based on the consolidation trend in the industry. It took a little longer than I expected.
Neustar and MarkMonitor have come out in opposition to digital archery and new gTLD batching.
In letters to ICANN this week, both companies have asked for delays in the digital archery process to give the community time to come up with better solutions.
Neustar’s new deputy general counsel Becky Burr wrote:
A modest delay would permit both ICANN and the community of affected stakeholders to consider the validity of those assumptions in light of actual applications.
Informed reflection by the community could result in greater efficiencies and fewer disputes down the road.
On the other hand, launching the Digital Archery process prior to publication of the list of applications is going to create winners and losers that will unnecessarily complicate, and perhaps prevent, thoughtful adjustments to the approach.
MarkMonitor’s Elisa Cooper simply wants to know “Why should some TLDs receive the benefit of being delegated before others?” She asked ICANN to reconsider whether batching is necessary.
While it is understandable that not all 1900+ applications cannot be simultaneously processed, why not just wait until all applications have completed the Initial Evaluation before announcing results. Why should some TLDs receive the benefit of being delegated before others?
If batching is even required, allow the Community to see the entire list of applications so that they can provide meaningful feedback. It may become apparent that certain types of strings should be processed together.
Sharing TAS passwords seems to be against the rules, but would be necessary to let a third party into your TAS account.
(I reported earlier in the week that it would also let the third-party view the confidential portions of your application, but that appears not to be the case after all.)
By officially coming out against batching and archery, Neustar and MarkMonitor join Melbourne IT, Group NBT, ARI Registry Service and the Intellectual Property Constituency.
Digital archery nevertheless is already underway, ICANN having launched the system on schedule yesterday.
All the applicants I’ve spoken to about this seem to be planning to wait until after the Big Reveal next Wednesday before taking their shots.
File these rumors under: unconfirmed, but plausible.
Sometimes the gossip is impossible to confirm to the extent that I’m comfortable reporting it as fact, but interesting enough that I think it could use a wider airing.
Here are three examples of Stuff We’ve Heard Recently. Take it all with a great big pinch of salt.
Go Daddy to become a registry
The world’s largest registrar is poised to make an entrance into the registry market, it is whispered.
The rumors don’t go as far as to whether the company plans to apply for some new gTLDs itself, or whether it plans to become a back-end registry services provider, or something else.
But if ICANN’s new relaxed stance on vertical separation means its competitors plan to join the registry space, it seems likely that Go Daddy will want a piece of the action too.
It is already a joint-venture partner in .me registry Domen, though I believe Afilias is responsible for the technical heavy lifting at the back end.
It’s too early to speculate too much, but I’ve written before that Go Daddy is possibly the only registrar likely to catch the attention of competition watchdogs if it decides to vertically integrate.
The official word from Go Daddy when I asked for confirmation a few weeks ago was: “We have no comment and we have no formal announcement pending.”
.pro to be liberalized
Multiple sources say that the restricted .pro gTLD, which has been around but seriously under-used since 2004, is set to begin to undergo a significant liberalization soon.
I’m expecting to see operator RegistryPro, which is now owned by HostWay, file a Registry Services Evaluation Process request with ICANN in the next few weeks.
Details are sketchy, but I would not be surprised if the company says it wants to do away with its restrictive registration policy entirely.
Currently, registrants have to provide evidence of professional credentials if they want to register a .pro name, although there’s a huge loophole that allows registrations via credentialed proxies.
RegistryPro hired itself a new CEO, Karim Jiwani, in May, and it’s been broadly predicted that he plans to shake up .pro to make it more of a commercial success.
Its parent may have already put in some of the groundwork for a .jobs-style directory service – HostWay, via a shell company, registered over 40,000 US zip codes in .pro in August 2010.
MarkMonitor gets acquired
This is more speculation than rumor.
There’s a wave of M&A activity in the domain name industry, as companies prepare for introduction of new gTLDs, and one of the potential growth areas is brand management.
With hundreds of new gTLDs likely to launch over a relatively short space of time, companies such as MarkMonitor could find their services in more demand than ever.
Whenever I ask anyone which registrars they think are likely to be hit by the consolidation bug, MarkMonitor is always on the shortlist.
The private company is backed by venture capitalists which will no doubt be looking to execute an exit strategy sooner or later, but the list of potential buyers is quite small.
Consider it a hunch, for now.
Minds + Machines is promoting its gTLD registry services to brand owners at the International Trademark Association meeting in Washington DC, revealing prices as low as $25,000 a year.
Its .brand package covers preparing and filing the application with ICANN and then running the technical back-end.
The company also appears to have introduced a price ceiling of $100,000 a year for .brand clients, according to a press release.
M+M is even offering to throw in a private, ICANN-accredited registrar. I believe the company may be the first registry to publicize this kind of bundled service.
The company is targeting brand owners that may not be convinced by the attractiveness of a .brand, and may have no clue what to do with one, but which nevertheless do not want to be left behind in the event that the second round of new gTLD applications is delayed for many years.
M+M CEO Antony Van Couvering is quoted as saying:
There are a lot of innovative ways for brands to use new gTLDs, but most brands want to first secure their gTLD for a reasonable price, and maybe use it internally, before deciding on the next step.
M+M, which hired former ICANN chair Peter Dengate Thrush as chairman in June, has been among the most aggressive marketers of new gTLDs (which are, after all, it’s entire raison d’etre).
Its enthusiasm has already caused a couple of raised eyebrows.
A teaser announcement from M+M earlier this week, which mentioned how its “registry platform is connected with all major registrars, including MarkMonitor” caused MarkMonitor to issue a clarification stating that it has “no business relationship” with the company.
While MarkMonitor is plugged into CoCCA, the registry platform that handles dozens of ccTLDs, it is not plugged into Espresso, which is M+M’s in-house version of the open-source CoCCA software, the company said in a blog post.
(UPDATE: M+M’s Antony Van Couvering notes in the comments below that MarkMonitor accepts .fm registrations, and that the .fm registry uses Espresso)