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Dodgy registrars could be banned from .org promotions

The worse a registrar is at tackling abuse, the more likely it is to be excluded from promotions in the .org space, according to a new policy from Public Interest Registry.

The .org registry said today that it is introducing a new “Quality Performance Index” to rate its registrars according to the quality of their registrations.

They’ll be ranked according to three criteria: abuse takedown, renewal rates, and domain usage.

Those that score above a certain threshold will be pre-qualified for promotions. The others will be encouraged to talk to their PIR rep about things they could do to get their scores up.

This kind of mechanism should in theory make it relatively easy to separate registrars into conscientious corporate citizens on the one hand and fly-by-night spam-friendly jerks on the other.

Keeping the bad guys away from the discounts could go a long way to keeping .org a relatively healthy zone.

But I expect there may be concern from the middle-ground of the registrar space, where we have well-meaning but under-resourced registrars that may find their scores wanting.

An additional concern may be that PIR said it intends to change the score threshold depending on the promotion, which appears to give it the ability to exclude registrars more or less at will.

The QPI initiative also extends to PIR’s newer, lesser-used gTLDs.

PIR says it has no plans to raise .org prices

Public Interest Registry claims it has no plans to raise its wholesale fee for .org domains, in the face of outrage from domainers and non-profits.

Under a proposed renegotiated contract with ICANN, price caps that have limited PIR to a 10% price increase every year would be removed.

But in a statement last week, the company said:

Rest assured, we will not raise prices unreasonably. In fact, we currently have no specific plans for any price increases for .ORG. We simply are moving to the standard registry agreement with all of its applicable provisions that already is in place for more than 1,200 other top-level domain extensions.

This does not necessarily translate to a commitment to not raise prices, of course. PIR may have “no specific plans” today, but it may tomorrow.

Over 3,300 people and organizations filed comments with ICANN about the proposed removal of the price caps, almost all of them negative.

Comments came initially from domain investors, but they were soon joined by many non-profit .org registrants and others.

Most claimed that it was unfair to allow unlimited price increases in legacy, pre-2012 gTLDs such as .org, which can be seen more as a public trust.

PIR went on to point out in its letter that it has not raised its prices — believed to be still under $10 a year — for the last three years.

But it might be worth noting that senior management has changed in that period. Brian Cute left the CEO job a year ago and, after an interim caretaker manager, was replaced by Donuts alumnus Jon Nevett in December.

.org’s registration numbers have been dipping. Over the last three years, it’s dropped from a peak of 11.3 million to 10.6 million at the end of 2018.

But it’s also renegotiated its back-end contract with Afilias over that period, meaning it’s now paying millions less on technical running costs than it once was.

PIR also reiterates that, like many of its customers, it is also a non-profit that is not motivated by investors and share prices.

More than half of its profits go to fund the Internet Society, itself a non-profit organization.

“We are different. We are mission based and not every decision is a financial one; we are not just driven by the bottom line,” its statement says.

PIR says that registrants are also protected by the measure in all ICANN gTLD contracts that allows registrants to lock in prices for up to 10 years in the event of a price increase, and by the fact that .org operates in a competitive market.

Reasonable people can and do disagree on whether these are effective protections in a case like .org.

Afilias bought .io for $70 million

Kevin Murphy, November 9, 2018, Domain Registries

Did you know Afilias owns .io? I didn’t, but it paid $70 million for the popular alternative TLD 18 months ago.

A recently published financial statement in Ireland shows that the company spent $70.17 million cash — a 10x revenue multiple — for 100% of Internet Computer Bureau Ltd in April 2017.

ICB runs .io, .ac and .sh, the ccTLDs for the British Indian Ocean Territories (.io), Ascension Island (.ac), and Saint Helena, Ascension and Tristan Da Cunha (.sh).

Afilias has never publicly announced the deal, and I haven’t seen it reported elsewhere, so I thought it was worth blogging up here.

At the time, the deal was characterized to registrars as a back-end contract win.

But it seems that Afilias actually purchased the back-end provider, then migrated (not as smoothly as it usually does) the TLDs over to its own infrastructure.

That would have opened up .io to all the registrars already plugged in to Afilias’ TLDs, potentially greatly increasing its reach.

But it’s probably not just the back-end Afilias has acquired.

Would a registry service provider spend 10 times annual revenue on a ccTLD back-end contractor, unless it had a damn good reason to believe that it would be able to at least recoup its investment, either through a long-term contract or some other mechanism?

It’s quite possible Afilias actually bought the .io ccTLD Manager.

The ccTLD Manager listed by ICANN in the IANA database is “IO Top Level Domain Registry”, but “c/o Sure (Diego Garcia) Limited”. That changed a week or so ago from “IO Top Level Domain Registry, Cable & Wireless”

Sure is the arm of telecommunications firm Cable & Wireless that provides internet access to remote islands in various parts of the world.

I don’t know what “IO Top Level Domain Registry” is.

Afilias tells me confidentiality arrangements are in place.

.io has proven popular as a TLD for technology startup companies that couldn’t get the .com they wanted.

Across its small portfolio, ICB was a $6.9 million business last year, but .io, with a reported 270,000 domains, must account for the large majority of that.

Due to the timing of the deal, ICB contributed $5.3 million to Afilias’ top line and was the main reason its revenue grew last year, its 2017 accounts reveal.

In 2017, Afilias saw revenue grow from $106.7 million to $113.6 million. Profit before tax was down slightly, from $38.6 million to $36 million

Again, that was due largely to ICB, which contributed $1.4 million of red ink to the bottom line.

Afilias is a private company, by the way, which is why these numbers all refer to 2017. It’s the final full year of it being based in Ireland, before its move to the US for tax reasons.

The disclosure also reveals that Afilias took a 45% stake in Dot Global, manager of the .global gTLD registry, in December 2017.

Dot Global had revenue of $1.9 million and a $320,000 loss last year, the report states.

doMEn, the Montenegro ccTLD (.me) operator in which Afilias has a 36.85% share, made a profit of $2.59 million on revenue of $7.39 million, it says. Both of those numbers were down slightly on 2016.

Afilias also says in the filing that it expects revenue to be down in 2018, due to the renegotiation of back-end contracts. I gather the contract with Public Interest Registry, which reportedly could cost about $10 million a year, is the main problem.

Given the accounts were signed off in May this year, it seems that this decline is expected despite the lucrative .au ccTLD contract, which Afilias signed at the end of 2017.

PIR chief: registries should stop stressing about volume

Kevin Murphy, September 11, 2018, Domain Registries

Public Interest Registry has announced some sweeping changes to how it markets .org and its other TLDs, with interim CEO Jay Daley telling DI that there’s too much focus on volumes in the industry today.

PIR is scrapping is volume discount programs after the current batch of incentives expires at the end of the year.

These are the programs that offer rebates to registrars if they hit certain performance targets, all based around newly created domains.

“They particularly favor large registrars, and we don’t think that’s appropriate going forward,” Daley told DI yesterday.

He said that when PIR removed some developed markets from its geographically-targeted discount programs, it saw creates go down but revenue improve.

He suggested that some registries have too much focus on volumes as a benchmark of success, failing to take account of important factors such as renews and abuse rates.

Part of the problem is that success is often measured (by folk including yours truly) by domains under management, rather than TLD health or revenue-per-domain.

“How many people are simply trying to get their numbers up without worrying about the underlying revenue, or taking a very low underlying revenue in order to get their numbers up?” Daley said.

“We’re not in any way somebody who is trying to get our numbers up at all costs, certainly not,” he said.

Another marketing program getting a makeover is pay-per-placement, where PIR would pay for prominent positions in the TLD drop-down menu of registrars storefronts.

These relationships have been based purely on new creates, Daley said, with appropriate “clawback” provisions when registrations turn out to be predominantly abusive.

In future, PIR intends to take a “longer-term, hygiene oriented view” of how its marketing money is used, making better use of data, he said.

“We need to be looking more at the quality of the registrations we get, the level of technical abuse generated by those registrations, looking at the renewal rates that come from those registrations,” he said.

PIR has a new four-strong channel services team that will be leading these changes.

“We are a public interest organization and need to take a public interest view on everything we do,” Daley said. “We need to be looking at our promotions for more than just commercial reasons, we need to be looking at public interest reasons as well.”

Daley, who ran New Zealand’s .nz registry from 2009 until this January, said that the big changes he is overseeing do not reflect an attempt to put his stamp on PIR and take over the CEO office on a permanent basis.

He does not want to run a registry and does not want to relocate to PIR’s headquarters in Virginia, he said.

“I’ve been a registry CEO for nine years,” he said. “I’ve done this and it’s time for me to look at other things.”

He also sits on PIR’s board of directors.

Neustar swaps out CEO, PIR looking for new CEO

There are to be changes at the top at two of the industry’s stalwarts.

Neustar has announced that eight-year CEO Lisa Hook has stepped aside to be replaced by Charles Gottdiener, who comes from the world of private equity.

He was most recently COO and MD at Providence Equity Partners.

Hook, who became CEO in 2010, will remain on the Neustar board of directors.

Neustar, which manages .biz, .co and many dot-brand gTLDs, is now owned by private equity group Golden Gate Capital, with a minority ownership by Singapore-based investor GIC, following a $2.9 billion deal last year.

Meanwhile, Public Interest Registry has started advertising for a new CEO of its own, following the mysterious resignation of Brian Cute in May. PIR runs .org and related gTLDs.

PIR said its new boss will need “excellent organizational, strategic planning, financial management and diplomatic skills”.

If it sounds like you, you have a few days to get your application in.