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Millions spent as three more new gTLDs auctioned

Kevin Murphy, September 26, 2017, Domain Registries

Two or three new gTLDs have been sold in a private auction that may well have seen over $20 million spent.

The not-yet-delegated strings .inc, .llc and (I think) .llp hit the block at some point this month.

They are the first new gTLDs to be auctioned since Verisign paid $135 million for .web a little over a year ago.

At this point, nobody wants to talk about which applicant(s) won which of the newly sold strings, but it seems that the proceeds ran into many millions.

MMX, which applied for .inc and .llc, said this morning that it has benefited from a $2.4 million windfall by losing both auctions.

The auctions evidently took place in September, but CEO Toby Hall declined to comment any further, citing non-disclosure agreements.

There were nine remaining applicants for .inc and eight for .llc.

I don’t think it’s possible to work out which sold for how much using just MMX’s disclosure.

But private auctions typically see the winning bid divided equally between the losers.

I believe .llp was probably sold off by auction at the same time.

The reason for this is that .llc, .inc and .llp were contention sets all being held up by one applicant’s dispute with ICANN.

Dot Registry LLC had applied for all three as “community” gTLDs, which meant it had to go through the Community Evaluation Process.

While it failed the CPE on all three counts, the company subsequently filed an Independent Review Process complaint against ICANN, which it won last August.

You may recall that this was the IRP that found disturbing levels of ICANN meddling in the drafting of the CPE panel’s findings.

Ever since then, ICANN has been conducting an internal review, assisted by outside experts, into how the CPE process worked (or didn’t).

Lawyers for Dot Registry and other affected applications (for .music and .gay) have been haranguing ICANN all year to get a move on and resolve the issue.

And yet, just as the end appeared to be in sight, Dot Registry seems to have decided to give up (or, possibly, cash out) and allow the strings to go to auction.

CEO Shaul Jolles declined to comment on the auctions today.

All I can currently tell you is that at least two of the Dot Registry holdout strings have been sold and that MMX did not win either of them.

The applicants for .inc were: Uniregistry, Dot Registry, Afilias, GMO, GTLD Limited, MMX, Nu Dot Co (now a known Verisign front), Donuts and Google.

The applicants for .llc were: MMX, Dot Registry, Nu Dot Co, Donuts, Afilias, Top Level Design, myLLC and Google.

MMX revenue slips despite domain growth

Kevin Murphy, September 26, 2017, Domain Registries

MMX today posted a smaller loss for the first half of the year, despite managing to grow domains under management and hit some important financial milestones.

The new gTLD registry formerly known as Mind + Machines, which announced a few months ago that it’s looking to be acquired, reported an H1 loss of $526,000 compared to a loss of $1.9 million a year earlier.

Revenue and billings were both down due to the lack of any big launches in the period; H1 2016 had benefited from the strong launch of .vip in China.

Revenue, which is recognized over the duration of the domain registrations, was $5.3 million compared to $7.4 million in 2016. Billings, a measure of cash sales, were $5.6 million compared to $8.1 million.

Despite these dips, MMX is happy enough that the “quality” of its revenue is getting better.

The company said that revenue from domain renewals more than doubled to $2.4 million and represented 45% of revenue. A year ago, it was 15%.

As another measure of the health of its business, it also said that its renewal billings was greater than its operating expenditure for the first time, after cost-cutting.

Domains under management went into seven figures for the first time, to 1.1 million. That was up from 821,000 at the start of the year.

It processed 318,000 new registrations in the six months, compared to 452,000 a year earlier (when .vip’s launch provided a boost).

More delay for Amazon as ICANN punts rejected gTLD

Kevin Murphy, September 26, 2017, Domain Policy

Amazon is going to have to wait a bit longer to discover whether its 2012 application for the gTLD .amazon will remain rejected.

ICANN’s board of directors at the weekend discussed whether to revive the application in light of the recent Independent Review Process panel ruling that the bid had been kicked out for no good reason.

Instead of making a firm decision, or punting it to the Government Advisory Committee (as I had predicted), the board instead referred the matter to a subcommittee for further thought.

The newly constituted Board Accountability Mechanisms Committee, which has taken over key functions of the Board Governance Committee, has been asked to:

review and consider the Panel’s recommendation that the Board “promptly re-evaluate Amazon’s applications” and “make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications,” and to provide options for the Board to consider in addressing the Panel’s recommendation.

The notion of a “prompt” resolution appears to be subjective, but Amazon might not have much longer to wait for a firmer decision.

While the BAMC’s charter requires it to have meetings at least quarterly, if it follows the practice of its predecessor they will be far more frequent.

It’s possible Amazon could get an answer by the time of the public meeting in Abu Dhabi at the end of next month.

ICANN’s board did also resolve to immediately pay Amazon the $163,045.51 in fees the IRP panel said was owed.

The .amazon gTLD application, along with its Chinese and Japanese versions, was rejected by ICANN a few years ago purely on the basis of consensus GAC advice, led by the geographic name collisions concerns of Peru and Brazil.

However, the IRP panel found that the GAC advice appeared to based on not a great deal more than whim, and that the ICANN board should have at least checked whether there was a sound rationale to reject the bids before doing so.

.xyz back on sale in China

Kevin Murphy, September 25, 2017, Domain Registries

Chinese registrars have started to carry .xyz domains again, about five months after a Chinese government ban.

West.cn and Net.cn are two of the China-based companies that appear to be selling .xyz names at the yuan equivalent of a US dollar, based on a spot check this morning.

West.cn flagged the “restoration” of service on its blog today, saying it was “overjoyed” to resume sales.

XYZ.com revealed back in May that its new gTLD domains were “temporarily” no longer available via Chinese registrars, after the government there suspended its license.

The reason for the suspension has always been a little vague, but the registry told DNW back in May that it related to Real Names Verification.

RNV is the government-mandated identity check that must take place before anyone in China can register and use a domain name.

XYZ had been outsourcing the function to ZDNS, but that relationship fell apart for some reason (rumor has it there was a money dispute) and XYZ decided to switch to Tele-info.

In the interim, Chinese registrars, apparently under order of their government, dutifully stopped carrying .xyz domains.

XYZ also went through ICANN’s Registry Services Evaluation Process to get its move to Tele-info approved at the Registry Agreement level.

The downtime prevented XYZ from masking the precipitous decline in its number of domains under management, which has fallen by over three million since May.

XYZ and the Chinese government have yet to issue statements about the newly reinstated license.

UPDATE 10/10/2017 — XYZ.com got in touch last week to say that .xyz was never “banned” in China.

A spokesperson said in an email: “We had RNV in place with ZDNS and opted to switch. To be compliant with ICANN, we suspended registrations in China.”

He declined to clarify whether the suspension was voluntary or ICANN-mandated.

He also declined to confirm or deny that Chinese registrars been told to suspend .xyz registrations by the government, as local sources have previously told DI and Domain Name Wire.

Other gTLDs owned by other registries have previously obtained Chinese licenses without ICANN first approving their RNV providers.

Okay, pedants, only 36% of new gTLDs are shrinking

Kevin Murphy, September 19, 2017, Domain Registries

Thirty-six percent of non-brand new gTLDs are shrinking, DI analysis shows.

According to numbers culled from zone files, 156 of the 435 commercial gTLDs we looked at had fewer domains yesterday than they did a year earlier.

On the bright side, that means the majority of them are still growing, but…

You: Wait, Kev, didn’t you write this exact same story yesterday, but said that 40% of new gTLDs were shrinking? Why are you now saying it’s 36%?

Me: People in the comments and on social media complained that I’d used domains under management (DUM) from May’s registry transaction reports — the most recent available — to collate the data yesterday, rather than more recent but less accurate zone files.

You: Why did they complain?

Me: I think because the May numbers show .xyz gaining on an annual basis, and yet everyone and his grandmother knows that .xyz’s numbers dropped off a cliff in July.

Your Grandmother: It’s true, they did. They lost millions…

You: Shut up, Gran. So, Kev, presumably if you do the same survey again, using the same TLDs, but use zone file data from this week instead, you’ll discover that the number of shrinking TLDs is far greater than 40%?

Me: Why would you presume that?

You: Because I also hate new gTLDs in general, not just .xyz specifically.

Me: Actually, the number of shrinking new gTLDs turns out to be smaller.

You: How come?

Me: Because only 36% of the gTLDs I surveyed had fewer numbers in their September 18, 2017 zone file than they did in their September 18, 2016 zone file.

You: So you actually over-reported the shrinkage in your first post? How come? I thought you were a shameless stooge of the new gTLD industry.

Me: I get that a lot.

You: Is .xyz at least on the list of biggest losers now?

Me: It is. Right at the top.

You: Good. I really fucking hate .xyz. What else changed? Stands to reason that some losers first time around are now gainers.

Me: Correct. Famous Four Media’s .party, for example, was a top 10 loser in the report comparing May 2016 DUM to May 2017 DUM, losing over 100,000 names, but it’s a top 10 gainer in the September-September zone file report, adding 85,000.

You: Explain.

Me: Well, .party’s reg numbers fell off a cliff in July 2016, and were still pretty depressed a year ago, but have since regained ground, presumably due to them costing less than a pack of gum.

You: Got it. Any others?

Me: It’s a similar story for .webcam, .work, .bar, .audio, .rest and a few others. They all shrunk May-May but gained September-September.

You: So, in summary, the new gTLD industry isn’t as unhealthy as you made out on Monday?

Me: Maybe. To be honest I don’t think the disparity between 36% and 40% makes a whole lot of difference. It’s still quite a lot of TLDs growing in the wrong direction. At one time, that kind of thing was virtually unheard of.

You: True dat.

Me: Anyway, can I get back to my blog post now?

You: Sure. Just don’t expect me to read to the end.