Latest news of the domain name industry

Recent Posts

XYZ slashes $10 million a year from premium stash

Kevin Murphy, September 11, 2017, Domain Registries

XYZ.com has slashed the asking price of a few thousand “premium” .xyz domain names, in some cases by many thousands of dollars.

Overall, it looks like the company has dropped prices by a total of $10.8 million.

At the top end of its reserved list, several single and double-character domains previously priced a $55,000 per year have been reduced to $13,000 per year.

At the lower end, domains previously priced at around $1,300 are now around $300.

Those are the recommended retail prices. Some registrars are offering them with a substantial mark-up.

The reductions affect 2,700 of the domains on XYZ’s premium list, which runs to about 3,075 names in total.

Whereas the previous hypothetical value of the full list was $15.3 million a year, it’s now at $4.4 million a year.

Of course, they’re not worth anything unless somebody is willing to pay the price, and the domains still seem to have end-user price tags on them.

Premium renewal fees have so far proved unpopular in the domain investing community due to the large carrying cost.

XYZ’s full list can be obtained here.

.CLUB nears profitability, talks renewals and “trial” domains

Kevin Murphy, September 4, 2017, Domain Registries

.CLUB Domains is nearing profitability and poised to become a “growth engine”, despite the view that most of its current domains are not expected to renew, according to its CEO.

Colin Campbell told DI today that the company made $6.7 million in revenue last year, and is “very close” to breaking even.

The company reached one million domains under management milestone in June, but Campbell freely admits that the majority of its current domains are unlikely to renew.

Almost 700,000 of these domains are what .CLUB considers “trial accounts”, he said. These are domains that typically sold for under a dollar — .club has been seen for sale as low as $0.88 — to speculators.

The registry usually sees a 10% to 15% renewal rate on these domains, he said.

Of the remaining 300,000 “solid, regular registrations”, Campbell said he sees first-year renewals in the 68% to 70% range and subsequent years at 80% to 90%.

The company typically only discounts on its first-year registrations, so renewal rates are a much better indicator of performance.

He said .club has around 120,000 web sites (not including parked domains), some of which are showcased on its web site.

With this in mind, renewals are at the forefront of Campbell’s mind. He said a key performance indicator .CLUB uses is “average cost of acquisition per renewed domain”, which the company tracks on a per-registrar basis.

The company invested $3.3 million in marketing in 2016, he said. That does not include rebates to registrars participating in volume programs, but it does take into account acquiring prominent shelf space on key registrars, he said.

“We’re very close to break-even and we’re still going to be able to invest multi-million dollars in ad campaigns and marketing,” he said.

“We’re going to have a company that’s breaking even and is still going to be a growth engine,” he said. “We’re going to be able to sustain a path of growth. I don’t know too many TLDs who could say that. Of course, if you reduce your expenses down to nothing you can make a profit, but can you also be a growth engine?”

“That’s where I feel like a TLD needs to get to, to be a sustainable long-term presence in the market, like a .org or .net or .co,” he said.

Despite the narrowing losses and starkly higher volumes, the $6.7 million in 2016 revenue is a lower than the $7 million in 2015 revenue Campbell told Domain Name Wire about a year ago.

Campbell said today that the reason for the dip is that late 2015 saw many gTLDs (old and new, even including .com) benefit from a bump from the Chinese market. .CLUB’s top line was particularly exposed by some premium sales it made to Chinese investors during that growth spike.

Premium sales have also been performing well in 2017, Campbell said, driven by the financing options and broker program introduced in January.

.CLUB announced first-quarter premium sales totaling $505,000 and $2.5 million in Q2.

No $17 million rebate for struggling new gTLDs

Kevin Murphy, August 31, 2017, Domain Registries

ICANN has turned down a request for about $17 million to be refunded to under-performing new gTLD registries.

The organization cannot spare the cash from its $96 million new gTLD program war chest because it does not yet know how much it will need to spend in future, Global Domains Division president Akram Atallah told registries this week.

The Registries Stakeholder Group made the request for fee relief back in March, arguing that the $25,000 per-TLD fixed annual fee each registry must pay amounts to an unfair “burden” that has “hampered their success and put them at a competitive disadvantage”.

The RySG proposed that this $6,250 per quarter fee should be reduced by $4,687.50 per quarter for a year, a 75% reduction, at a cost to ICANN of $16.87 million.

The money, they said, should be drawn from the $96.1 million in new gTLD application fees that were still unspent at the time.

The new gTLD program charged each applicant $185,000 per application. About third of the fee was to cover unforeseen events, and is often sniggeringly referred to as its legal defense fund.

Because the program was meant to work only on a cost-recovery basis, there are question marks hanging over what ICANN should ultimately do with whatever cash is left over.

(It should be noted that this cash is separate from and does not include the quarter-billion dollars ICANN has squirreled away from its new gTLD last-resort auctions).

Now that the vast majority of the 2012 round’s 1,930 applications have been fully processed, it must have seemed like a good time for the RySG to ask for some cashback, but ICANN has declined.

Atallah said in a August 29 letter (pdf) to the group that ICANN has had to spent lots of its program reserve on unanticipated projects such as name collisions, universal acceptance, the EBERO program and the Trademark Clearinghouse. He wrote:

We do not yet know how much of the New gTLD Program remaining funds will be required to address future unanticipated expenses, and by when. As such, at this time, ICANN is not in a position to commit to the dispensation of any potential remaining funds from the New gTLD Program applications fees.

It seems for now the hundreds of new gTLDs with far fewer than 10,000 registrations in their zones are going to keep having to fork over $25,000 a year for the privilege.

GoDaddy’s reason for dumping Uniregistry doesn’t make a lot of sense

Kevin Murphy, August 24, 2017, Domain Registrars

GoDaddy, as you may have read, has again decided to dump Uniregistry’s portfolio of TLDs, following wholesale price increases.

But its explanation for the move — trying to provide its customers with a “great product experience” — doesn’t seem to tally with the way it has gone about implementing the change.

The company confirmed this week that it will no longer offer new registrations in Uniregistry’s stable of new gTLDs, but will continue to support existing customers.

The registrar’s EVP of domains, Mike McLaughlin, reportedly explained the move like this:

GoDaddy strives to provide its customers with great product experiences wherever possible. After careful consideration, we decided to stop offering new Uniregistry domain names for sale because their pricing changes caused frustration and uncertainty with our customers.

But the way GoDaddy has gone about this looks like it is set to provide anything other than a great product experience.

For starters, existing registrants of Uniregistry names will find their registrations migrated over to the wholesale registrar Hexonet, for which GoDaddy will act as reseller.

They’ll still be able to manage their names via their GoDaddy control panels, but technically GoDaddy will no longer be the registrar.

This could well add friction to the customer support process, as well as meaning Hexonet will now show up in Whois as the sponsoring registrar.

Accompanying this move is the unexplained removal of Whois privacy services for all affected domains. Registrants will get a refund for their privacy service and will have the opportunity to switch registrars to one that will support privacy.

For those that remain, suddenly their personally identifiable information will become publicly available. This could lead to an increase in complaints and support calls as registrants realize what has happened.

In terms of price, existing registrants will presumably still be affected by Uniregistry’s increases to the same extent as they were previously. Again, their customer experience has not changed.

Overall, the explanation doesn’t make a heck of a lot of sense to me. I put the above points to GoDaddy and VP of domains Rich Merdinger responded, via a company spokesperson:

After we made the decision to stop supporting Uniregistry domain names, we worked to provide the best possible experience we could to our customers. We wanted them to have a transparent experience. They will log in to the same GoDaddy account and service the domain names the same way they always have. Because of the transfer of the name to a different registrar, privacy had to be removed. While this impacts a small subset of these customers, we have done everything to make this transition as smooth as possible.

It’s true that GoDaddy isn’t a big seller of Uniregistry names. It’s one of Uniregistry’s smaller channel partners and the number of Uniregistry names it’s sold — measured in the thousands — is a drop in the ocean of the over 55 million gTLD names it currently has under management.

The two companies are also competitors, it probably should be noted.

But while Uniregistry’s registrar seems to be have been well-received by customers, and its domain volume has grown rapidly in the last three years, it still only had about 1.5 million domains under management at the last count; hardly an existential threat to the Scottsdale behemoth.

It should also be noted that GoDaddy is not the only registrar to distance itself from Uniregistry.

NameCheap also recently discontinued support for the TLDs that are experiencing the biggest price increases. Tucows announced a similar move in May.

GoDaddy had already said it would drop Uniregistry once before, but changed its mind, before changing it back again.

Google shifts 400,000 .site domains

Kevin Murphy, August 22, 2017, Domain Registries

Google has given away what is believed to be roughly 400,000 subdomains in Radix’s .site gTLD as part of a small business web site service.

Since its launch a couple of months ago, the Google My Business web site builder offering has been offering small businesses a free one-page site with a free third-level domain under business.site.

Google My Business also offers users the ability to upgrade to a paid-for second-level domain via its Google Domains in-house registrar.

Google the search engine indexes 403,000 business.site pages currently. Because each subdomain is limited to a single page, it is possible that the number of subdomains is not too far behind that number, Radix believes.

This means that business.site is likely almost as large as the .site gTLD itself, which currently has about 450,000 names in its zone file.

Given the rapid growth rate, it seems likely the subdomain will overtake the TLD in a matter of weeks.

According to Radix, business.site was purchased off of its registry reserved premium list. The sale price has not been disclosed.

It’s good publicity for the TLD, and merely the latest endorsement by Google of the new gTLD concept.

As well as being the registry for many new gTLDs, Google parent Alphabet uses a .xyz domain and its registrar uses a .google domain.