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Second new gTLD round “possible” but not “probable” in 2016

Kevin Murphy, September 26, 2014, Domain Policy

If there are any companies clamoring to get on the new gTLD bandwagon, they’ve got some waiting to do.

Based on a sketchy timetable published by ICANN this week, it seems unlikely that a second application round will open before 2017, and even that might be optimistic.

While ICANN said that “based on current estimates, a subsequent application round is not expected to launch until 2016 at the earliest”, that date seems unlikely even to senior ICANN staffers.

“The possibility exists,” ICANN vice president Cyrus Namazi told DI, “but the probability, from my perspective, is not that high when you think about all the pieces that have to come together.”

Here’s an ICANN graphic illustrating these pieces:

As you can see, the two biggest time-eaters on the road-map, pushing it into 2017, are a GNSO Policy Development Process (green) and the Affirmation of Commitments Review (yellow).

The timetable envisages the PDP, which will focus on what changes need to be made to the program, lasting two and a half years, starting in the first quarter 2015 and running until mid-2017.

That could be a realistic time-frame, but the GNSO has been known to work quicker.

An ICANN study in 2012 found that 263 days is the absolute minimum amount of time a PDP has to last from start to finish, but 620 days — one year and nine months — is the average.

So the GNSO could, conceivably, wrap up in late 2016 rather than mid-2017. It will depend on how cooperative everybody is feeling and how tricky it is to find consensus on the issues.

The AoC review, which will focus on “competition, consumer trust and consumer choice” is a bit harder to gauge.

The 2009 Affirmation of Commitments is ICANN’s deal with the US government that gives it some of its authority over the DNS. On the review, it states:

If and when new gTLDs (whether in ASCII or other language character sets) have been in operation for one year, ICANN will organize a review that will examine the extent to which the introduction or expansion of gTLDs has promoted competition, consumer trust and consumer choice, as well as effectiveness of (a) the application and evaluation process, and (b) safeguards put in place to mitigate issues involved in the introduction or expansion.

The AoC does not specify how long the review must last, just when it must begin, though it does say the ICANN board must react to it within six months.

That six-month window is a maximum, however, not a minimum. The board could easily take action on the review’s findings in a month or less.

ICANN’s timeline anticipates the review itself taking a year, starting in Q3 2015 and broken down like this:

Based on the timelines of previous Review Team processes, a rough estimate for this process is that the convening of the team occurs across 3-5 months, a draft report is issued within 6-9 months, and a final report is issued within 3-6 months from the draft.

Working from these estimates, it seems that the review could in fact take anywhere from 12 to 20 months. That would mean a final report would be delivered between September 2016 and July 2017.

If the review and board consideration of its report take the longest amount of time permitted or envisaged, the AoC process might not complete until early 2018, a little over three years from now.

Clearly there are a lot of variables to consider here.

Namazi is probably on safe ground by urging caution over the hypothetical launch of a second round in 2016.

Given than new gTLD evaluations were always seen as a “rolling” process, one of the things that the GNSO surely needs to look into is a mechanism to reduce the delay between rounds.

Afilias loses Chinese .info as seven more new gTLD auctions conclude

Kevin Murphy, September 24, 2014, Domain Registries

Today news has reached us via various channels that seven new gTLD contention sets have been settled, all is seems via private auction.

Notably, Afilias has lost the opportunity to run the Chinese-script version of its 14-year-old .info TLD to Beijing Tele-info Network Technology Co, the only other applicant.

The Beijing company’s application says the string .信息 means: “knowledge or message in the form suitable for communications, storage, or processing, which is closely related to notions of form, meaning, pattern, perception, representation, and entropy.”

Afilias said it means “info”.

Separately, in a press release today, Minds + Machines said that it has won the auctions for two gTLDs — .law and .vip — and lost the auctions for several more.

In .law it beat NU DOT CO, Donuts, Radix, Merchant Law Group and Famous Four Media. In .vip it beat Google, VIP Registry, Donuts, I-Registry and Vipspace Enterprises.

From the auctions M+M said it lost we can infer that .design and .realestate contention sets are also now settled, but we haven’t seen any withdrawals yet so we don’t know the winners.

M+M said it netted $6.2 million cash by winning .law and .vip and losing .design, .flowers, .group, .realestate and .video.

From today’s new withdrawals we can see that Uniregistry won .auto against Fegistry, Donuts and Dot Auto, while Donuts won .memorial against Afilias and dotCOOL.

UPDATE: Thanks to Jim in the comments for the reminder that the “Chinese .info” auction happened back in June. The TLD fetched $600,000 at an ICANN last-resort auction.

M+M turns profit on the back of gTLD auctions

Kevin Murphy, September 24, 2014, Domain Services

Minds + Machines posted an operating profit of almost £3 million ($4.9 million) for the first half of the year, almost entirely driven by the proceeds of losing new gTLD auctions.

The registry record a profit to June 30 of £2.9 million on revenue of $68,000.

The “profit on gTLD auctions” line item that permitted that seemingly impossible profit number was £7.1 million ($11.6 million), based on M+M losing eight out of 12 private auctions.

The company had £22 million ($36 million) in cash and other current assets on its balance sheet at the end of the period.

None of M+M’s big TLDs had launched in the first half, hence the low revenue. Since the half ended, .london has proven successful and several more new gTLDs wholly or partially owned by M+M have also launched.

In his statement to the market, chair Fred Krueger said:

A key variable in our financial position is the dynamic of private auctions, which we have embraced, and which has worked tremendously to our advantage. We believe that our current still contested strings represent significant assets which we have the potential to monetize either to further our existing new TLDs or to purchase additional new TLDs at auction.

He also reiterated CEO Antony Van Couvering’s call for a new metric to track gTLD registry health that is based on revenue-per-domain rather than simple volumes.

His outlook for new gTLDs was arguably less cautious than his counterpart at CentralNic, which reported its half-year numbers yesterday and talked of demand “falling short of industry expectations”.

Krueger said:

Name registration data available to-date indicates a strong opening for a variety of new products/domains, and also shows that we are still very early in the adoption curve for new TLDs. We expect that the growth of almost all new TLDs will likely follow an “S curve”, as it historically has for newly launched TLDs, rather than a straight line.

He also reconfirmed that M+M plans to aggressively pursue its new integrated registrar business as a means to drive growth in its gTLDs, rather than simply relying on the channel.

.ooo sales targets are batshit crazy

Kevin Murphy, September 23, 2014, Domain Registries

New gTLD registry and e-commerce network Infibeam, which is taking its .ooo TLD to sunrise today, has been bandying around some truly wacky registration predictions in the Indian press today.

The company’s founder told one local paper, the The Hindu’s BusinessLine, that .ooo will have volumes that dwarf .xyz and a literally impossible number of sunrise registrations.

I’m not going to link to the article itself because the BusinessLine website, probably via an embedded ad, tried to download malware onto my machine. The headline is “Infibeam to offer ‘.ooo’ for ‘.com-savvy’ netizens” if you want to Google it.

Here’s an extract, however, which quotes Infibeam founder Vishal Mehta:

The company is targeting 35,000-40,000 trademark registered companies along with several SMEs.

“The new GTLD is the first of a kind initiative by any e-commerce company. Over the next 6-12 months we expect to get about 1-2 million domain registrations under .ooo,” Mehta told BusinessLine.

This is nuts for at least two reasons.

First, Infibeam seems to be expecting 35,000 to 40,000 sunrise registrations.

That’s impossible.

The .ooo sunrise period starts today, when there’s just shy of 33,000 trademarks listed in the Trademark Clearinghouse.

A TMCH listing is of course required to buy a name at sunrise, so even if every mark in the TMCH converted to a .ooo name — which they won’t — the TLD still couldn’t hit the bottom end of its projection.

In reality, .ooo will be lucky to hit 500 sunrise registrations, just like every other gTLD this year.

Second, the only way Infibeam is going to get one to two million registered domains in six to 12 months is if the company not only gives them away for free, but actually forces them upon registrants without their consent.

The registry with the most number of registrations to date is .xyz, which has about 517,000 domains in its zone file today. It’s managed that feat in three and a half months largely by giving the names away for free to its registrars’ customers whether they want them or not.

Conceivably, Infibeam could do the same with .ooo, but that wouldn’t be especially helpful to its application commitment to make the gTLD “synonymous with trust and consumer choice”.

Indeed, its application talks exclusively about offering .ooo names to existing Infibeam customers.

Could the company leverage its BuildaBazaar e-commerce network to create quickly a substantial base of registrations?

It web site talks of a “billion dreams” and a “billion stores” and its .ooo gTLD application states: “Our goal is nothing less than providing a billion stores for a billion people.”

According to the application, Infibeam will try to persuade its BuildaBazaar customers to upgrade to a premium package that includes a .ooo domain name for their stores.

All Infibeam would need to do would be to convert 0.1% of its billion-strong BuildaBazaar customer base to .ooo domain names and it could hit one million registrations almost overnight.

That would assume that BuildaBazaar has a billion stores, of course. It doesn’t. It has 20,000 stores.

So where are the “1-2 million domain registrations” over the “next 6-12 months” going to come from?

Beats me.

I hope for Mehta’s sake that he was misquoted because otherwise I suspect he’s going to be very disappointed very quickly.

Multiple live gTLDs will be auctioned in October

Kevin Murphy, September 23, 2014, Domain Registries

Exactly 11 months after the first new gTLDs were delegated to the DNS root, DI has learned that a batch of live gTLDs are heading to auction for the first time.

There’s now officially an aftermarket for top-level domains.

“Multiple” delegated 2012-round new gTLDs will be auctioned off next month, with the exact date yet to be finalized, according to a reliable source.

The venue will be Applicant Auction, which has been helping applicants resolve gTLD contention sets via private auction for the last year.

The auction is understood to be invitation-only and the identities of the gTLDs up for grabs, and their associated registries, are a closely-guarded secret.

What conclusions we can come to will rather depend on which gTLDs are being sold.

If they’re gTLDs that are already in general availability, and perhaps have suffered worse-than-expected sales, it probably wouldn’t look very good for the new gTLD program.

But if they’re pre-launch strings belonging to portfolio applicants that have always looked like obvious investment vehicles, the optics might not be as damaging.

We’ll have to wait and see. If the auctions are successful, at some point over the next couple of months we can expect to see one or more new gTLDs change hands.

It won’t be the first time a gTLD has been bought — successful applicants from earlier rounds have been acquired by larger competitors — but it will be the first time a delegated new gTLD has been auctioned off when it’s still basically an unproven asset rather than a full-blown business.

It could be the first example of “domaining” with TLDs.

In this round, NCC Group bought .trust — an uncontested application with no ICANN contract — from Deutshe Post in February, while Rightside has acquired some TLDs from Donuts under a pre-existing deal.