Portfolio gTLD registries Famous Four Media and Minds + Machines have both announced that they’re formally entering the Chinese market.
Both companies are establishing “wholly foreign-owned enterprises” (WFOEs), a form of company that does not require local investment, on the mainland.
The moves are aimed at getting the registries’ respective gTLDs accredited by the Chinese government, something that is required before local registrants are allowed to use them.
In a press release, FFM senior legal counsel Oliver Smith said:
It was clear to us soon after launching our first domain registry that domain registrations from China comprised a strong proportion of the total. It was a natural progression of our strategy to build a physical presence in China. The accreditation process is complicated but well-structured and, thanks to the help of advice from the Chinese government, should be completed relatively quickly.
In some of Famous Four’s gTLDs, Chinese registrars are the overwhelming majority of the sales channel.
In .win, the registry’s biggest-seller, China was responsible for about 85% of registrations at the last count, for example.
Meanwhile, M+M is taking a slightly different route into the country.
It said today that while it also shortly plans to open a WFOE, it has also partnered with ZDNS, a local provider of proxy services for registries.
ZDNS was the company XYZ.com partnered with for its controversial launch into China. According to M+M, it’s also working with .CLUB Domains and some Chinese gTLD registries.
M+M is also using the specialist consultancy Allegravita for its marketing there.
Its local entity will be called Beijing Ming Zhi Mo Si Technology Company Limited (which may or may not translate to something like “Wise Mediation”).
M+M’s first Chinese launches will be .beer, .fashion, .fit, .law, .wedding, .work and .yoga, with .vip and .购物 (“.shopping”) coming later in the year.
Minds + Machines has added .boston to its stable of geo-gTLDs, buying the contract from the publisher of the Boston Globe newspaper.
The company said today that it has acquired 99% of Boston TLD Management, a new company into which the Globe plans to sign over its .boston ICANN contract.
The deal is contingent on ICANN approving the contract reassignment.
The ink is still moist on the .boston Registry Agreement, which was signed December 10.
The gTLD is officially in pre-delegation testing right now.
But the acquisition also means M+M will take over back-end duties for .boston. Originally, the Globe had intended to use OpenRegistry.
The gTLD was officially a “geographic” string under ICANN rules, and needed support from the local government in Boston.
.boston would become M+M’s fifth geographic gTLD — sixth if you include .london.
The company said it plans to launch the TLD later this year.
Uniregistry has become the latest registry to adopt the Early Access Period model for some new gTLD launches.
.cars, .car and .auto will all use the EAP, in place of the more typical landrush period, when they launch in January.
Technically, while Uniregistry is running the back-end, the three gTLDS are all being offered by Cars Registry, a partnership between Uniregistry and .xyz registry XYZ.com.
Uniregistry CEO Frank Schilling said it was felt that EAP was needed due to the “stupendous cost” of acquiring the strings.
EAP is a period lasting usually about a week in which the price of registering any domain descends daily from a very high fee on day one — usually above $10,000 at the storefront — to maybe a hundred bucks when the period closes.
The model was pioneered by portfolio registries Donuts and Rightside, but has since been adopted by the likes of Minds + Machines, Radix and XYZ.com.
It’s rapidly becoming the de facto industry standard for new gTLD launches, replacing the auction-based approach to landrush most registries have used in the past.
The driving factor for the industry switch is surely revenue.
Donuts told us late last month that it had sold 48,381 EAP domains across all of its launches to date, where registry prices are believed to start at around the $10,000 mark.
M+M said yesterday that it sold $1.18 million after it chose to use EAP with its recently launched .law gTLD, where registration restrictions suggest many of the sales will have been to legit end users.
Registrars also get a bigger slice of the pie. In an auction model they might wind up with just the regular registration fee, but with EAP they can mark up day one domains by thousands of dollars.
Cars Registry says its EAP is targeted at “OEMs, dealerships, vendors”, but it will almost certainly get a healthy chunk of domainer interest too.
Minds + Machines has outlined its plan to refocus its business on sales and marketing, which has already resulted in a couple dozen job losses, as the latest stage of its profit runway.
The new gTLD company also outlined plans to return about half of its cash reserves — mostly obtained by losing new gTLD auctions — to its shareholders.
For the first half of the year, the London-listed company reported an EBITDA loss of $1.2 million, compared to income of $5.7 million a year earlier, on revenue that was up to $3.6 million from $113,000 in the comparable 2014 period.
The company said it is “committed to achieving its stated goal of crossing over into profitability in 2016” and blamed high operating costs for the loss, but said it has been restructuring to help it return to profit.
M+M said its headcount has been reduced from 58 to 44, but that it has added ten jobs in sales and marketing, which seems to indicate at least 24 people recently lost their jobs.
The bottom line was also affected by the fact that most of the company’s cashflow to date has been generated by auction losses, and there were more of those last year than this.
The company hit three of its six “key performance indicator” targets — domains under management market share, premium sales growth and standard sales growth — but fell short of the other three.
Average revenue per name for premiums was $184 versus a $200-$225 target, and average revenue per standard name was down from $28 to $10, largely due to a deep discount promotion for .work domains. Higher prices for soon-to-launch .law could increase the average, M+M said.
The company also announced that it will spent £15 million ($23.1 million) of its cash reserves on a share buyback.
That’s almost half of the $48.3 million is has in the bank. This time last year, M+M’s share price peaked at 12p; it’s currently at 8.55p.
The price saw a spike in May, shortly before then-chairman Fred Krueger was asked to resign by the board. Krueger has since sold off the majority of his substantial shareholding, despite explicitly saying that he would not.
Disputing the recent Blue Coat report into “shady” new gTLDs, domain security firm Architelos says that the shadiest namespace is just under 10% shady.
That’s a far cry from Blue Coat’s claim earlier this week that nine new gTLDs are 95% to 100% abusive.
Architelos shared with DI a few data points from its NameSentry service today.
NameSentry uses a metric the company calls NQI, for Namespace Quality Index, to rank TLDs by their abuse levels. NQI is basically a normalized count of abusive domains per million registered names.
According to Architelos CEO Alexa Raad, the new gTLD with the highest NQI at the end of June was .work.
Today’s NameSentry data shows that .work has a tad under 6,900 abusive domains — almost all domains found in spam, garnished with just one suspected malware site — which works out to just under 10% of the total number of domains in its zone file.
That number is pretty high — one in 10 is not a figure you want haunting your registry — but it’s a far cry from the 98.2% that Blue Coat published earlier this week.
Looking at the numbers for .science, which has over 324,000 names in its zone and 15,671 dodgy domains in NameSentry, you get a shadiness factor of 4.8%. Again, that’s a light year away from the 99.35% number published by Blue Coat.
Raad also shared data showing that hundreds of .work and .science domains are delisted from abuse feeds every day, suggesting that the registries are engaged in long games of whack-a-mole with spammers.
Blue Coat based its numbers on a sampling of 75 million attempted domain visits by its customers — whether or not they were valid domains.
Architelos, on the other hand, takes raw data feeds from numerous sources (such as SpamHaus and SURBL) and validates that the domains do actually appear in the TLD’s zone. There’s no requirement for the domain to have been visited by a customer.
In my view, that makes the NameSentry numbers a more realistic measurement of how dirty some of these new gTLDs are.