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Donuts sticks with Rightside despite Google support

Kevin Murphy, February 8, 2017, Domain Registries

Donuts has renewed its back-end registry services contract with Rightside, Rightside has announced.

That’s despite indications a few months ago that it might have been preparing for a switch to Google’s new Nomulus platform.

Rightside said yesterday that the deal, which has seen Rightside handle the registry for Donuts’ portfolio of almost 200 gTLDs for the last five years, has been extended.

It’s a “multi-year” deal, but the length of the extension has not been revealed.

Donuts had suggested last October that it might be ready to move to Nomulus instead.

The company revealed then that it had been quietly working with Google for 20 months on the software, which uses Google’s cloud services and is priced based on resource usage.

Then-CEO Paul Stahura said Nomulus “provides Donuts with an alternative back-end with significant benefits.”

Now-CEO Bruce Jaffe said yesterday that “Rightside’s registry platform has the right combination of innovative features, ease-of-operation, scalability, and highly responsive customer support”.

Now MMX kills off premium renewals

Kevin Murphy, January 23, 2017, Domain Registries

Are we witnessing the beginning of the end for the premium renewal business model?

MMX, aka Minds + Machines today became the latest new gTLD registry to announce it is getting rid of premium renewal fees for all of its premium domain names.

The price changes are retroactive to January 6 and affect all MMX gTLDs, such as .beer, .fishing and .horse.

“We started the process of rebooting our strategy in July last year, when we alerted our many registrar partners that 100% of our premium names sold after January 6th 2017 would have standard, GA [general availability] renewal prices,” CEO Toby Hall said in a statement.

MMX also said today that it is “revisting” its existing pricing tiers.

The reduced pricing will make the domains more attractive to domainers and end users alike, but I suspect the former will be more likely to exploit the new deal at first.

It’s the second new gTLD registry, after Rightside, to announce such a move this month.

Rightside said it was abolishing premium renewals on its expensive Platinum-level domains, though they will remain on more modestly priced premiums.

Rightside sells eNom to Tucows for $83.5m

Kevin Murphy, January 23, 2017, Domain Registrars

Tucows is to become “the second largest registrar in the world” by acquiring eNom from Rightside, paying $83.5 million.

The deal will give Tucows another 14.5 million domains under management and 28,000 resellers, giving it a total of 29 million DUM and 40,000 resellers.

That DUM number, which appears to include ccTLDs, makes Tucows the undisputed volume leader in the reseller world and the second-largest registrar overall.

GoDaddy, the DUM leader, had about 55 million domains just in gTLDs at the last count.

Tucows CEO Elliot Noss told analysts that the deal, along with the April 2016 acquisition of Melbourne IT’s reseller business, were “individual opportunistic transactions”.

He said that Tucows will take its time integrating the two companies, but expects to realize cost savings (presumably read: job losses as duplicate administrative positions are eliminated) over 24 months.

The reseller APIs will not change, and Tucows will not migrate names over to its own existing ICANN accreditations. This could help with reseller retention.

For Rightside, the company said the spin-off will allow it to focus on vertical integration between its gTLD registry business and its consumer-facing registrar, Name.com.

Rightside had come in for a certain amount of high-profile investor criticism for its dogged focus on new gTLDs at the expense of its eNom and Name.com businesses.

Activist investor J Carlo Cannell, supported by fellow investor and Uniregistry CEO Frank Schilling, a year ago accused Rightside of putting too much emphasis on “garbage” new gTLDs instead of its more profitable registrar businesses.

Since then, Rightside has rebuffed separate offers for some or all of its gTLDs by rivals Donuts and XYZ.com.

Last June, it also announced plans to modernize eNom, which Cannell and others had accused of looking stale compared to its competitors.

RightSide cuts super-premium fees in half, drops premium renewals

Kevin Murphy, January 11, 2017, Domain Registries

New gTLD registry RightSide has slashed the minimum price of its so-called “Platinum” tier premium domains and dropped renewal fees for these domains down to an affordable level.

The price changes come as part of two new marketing initiatives designed to start shifting more of its 14,000-strong portfolio of super-premiums through brokers and registrar partners.

The minimum first-year price of a Platinum-tier name has been reduced immediately from $50,000 to $25,000.

In addition, these domains will no longer renew every year at the same price. Instead, RightSide has reduced renewals to a more affordable $30.

“We weren’t selling them,” RightSide senior VP of sales and premiums Matt Overman told DI. “There is not a market for $50,000-a-year domain purchases.”

Now, “we feel comfortable enough with amount money we’re going to make up-front”, Overman said.

However, premium renewals are not being abandoned entirely; non-Platinum premium names will still have their original higher annual renewal fees, he said.

RightSide has sold some Platinum names in the five and six-figure range, but the number is quite small compared to overall size of the portfolio.

But Overman said that “none of them sold with a $50,000 renewal”. The highest renewal fee negotiated to date was $5,000, he said.

Before yesterday’s announcements, RightSide’s Platinum names were available on third-party registrars with buy-it-now fees that automatically applied the premium renewal fees.

However, it seems that the vast majority if not all of these sales came via the company’s in-house registrars such as Name.com and eNom, where there was a more flexible “make an offer” button.

Under a new Platinum Edge product, RightSide hopes to bring this functionality to its registrar partners.

It has made all 14,000 affected names registry-reserved as a result, Overman said. They were previously available in the general pool of unclaimed names and available to registrars via EPP.

Each affected name now has a minimum “access fee” of $25,000 (going up to $200,000 depending on name) that registrars must pay to release it.

They’re able to either negotiate a sale with a markup they can keep, or sell at “cost” (that is, the access fee) and claim a 10% commission, Overman said.

A separate Platinum Brokerage service has also been introduced, aimed at getting more professional domain brokers involved in the sales channel.

Brokers will be able to “reserve” up to five RightSide Platinum names for a broker-exclusivity period of 60 days, during which they’re expected to try to negotiate deals with potential buyers.

While no other brokers will be able to sell those names during those 60 days, registrars will still be able to sell those reserved names.

Overman said that if a registrar sells a name during the period it is under exclusivity with a participating broker, that broker will still get a commission from RightSide regardless of whether they were involved in the sale.

“We won’t give that name to any other broker, but if it sells through a registrar they still get their 10%,” he said. The registrar also gets its 10%.

This of course is open to gaming — brokers could reserve names and just twiddle their thumbs for 60 days, hoping to get a commission for no work — but the broker program is expected to be fairly tightly managed and those exploiting the system could be kicked out.

RightSide will be making the case for the two Platinum-branded offerings at the upcoming NamesCon conference in Las Vegas, where it also expects to name its first brokerage partners.

Google could shake up the registry market with new open-source Nomulus platform

Kevin Murphy, October 19, 2016, Domain Registries

Google has muscled in to the registry service provider market with the launch of Nomulus, an open-source TLD back-end platform.

The new offering appears to be tightly integrated with Google’s various cloud services, challenging long-held registry pricing conventions.

There are already indications that at least one of the gTLD market’s biggest players could be considering a move to the service.

Donuts revealed yesterday it has been helping Google with Nomulus since early 2015, suggesting a shift away from long-time back-end partner Rightside could be on the cards.

Nomulus, which is currently in use at Google Registry’s handful of early-stage gTLDs, takes care of most of the core registry functions required by ICANN, Google said.

It’s a shared registration system based on the EPP standard, able to handle all the elements of the domain registration lifecycle.

Donuts contributed code enabling features it uses in its own 200-ish gTLDs, such as pricing tiers, the Early Access Period and Domain Protected Marks List.

Nomulus handles Whois and likely successor protocol RDAP (Registration Data Access Protocol).

For DNS resolution, it comes with a plug-in to make TLDs work on the Google Cloud DNS service. Users will also be able to write code to use alternative DNS providers.

There’s also software to handle daily data escrow to a third-party provider, another ICANN-mandated essential.

But Nomulus lacks critical features such as billing and fully ICANN-compliant reporting, according to documentation.

So will anyone actually use this? And if so, who?

It’s too early to say for sure, but Donuts certainly seems keen. In a blog post, CEO Paul Stahura wrote:

As the world’s largest operator of new TLDs, Donuts must continually explore compelling technologies and ensure our back-end operations are cost-efficient and flexible… Google has a phenomenal record of stability, an almost peerless engineering team, endless computing resources and global scale. These are additional potential benefits for us and others who may contribute to or utilize the system. We have been happy to evaluate and contribute to this open source project over the past 20 months because this platform provides Donuts with an alternative back-end with significant benefits.

In a roundabout way, Donuts is essentially saying that Nomulus could work out cheaper than its current back-end, Rightside.

The biggest change heralded by Nomulus is certainly pricing.

For as long as there has been a competitive market for back-end domain registry services, pricing has been on a per-domain basis.

While pricing and model vary by provider and customer, registry operators typically pay their RSPs a flat fee and a buck or two for each domain they have under management.

Pricing for dot-brands, where DUM typically comes in at under 100 today, is believed to be weighted much more towards the flat-fee service charge element.

But that’s not how Nomulus is to be paid for.

While the software is open source and free, it’s designed to run on Google’s cloud hosting services, where users are billed on the fly according to their usage of resources such as storage and bandwidth consumed.

For example, the Google Cloud Datastore, the company’s database service that Nomulus uses to store registration and Whois records, charges are $0.18 per gigabyte of storage per month.

For a small TLD, such as a dot-brand, one imagines that storage costs could be reduced substantially.

However, Nomulus is not exactly a fire-and-forget solution.

There is no Google registry service with customer support reps and such, at least not yet. Nomulus users are responsible for building and maintaining their registry like they would any other hosted application.

So the potentially lower service costs would have to be balanced against potentially higher staffing costs.

My hunch based on the limited available information is that for a dot-brand or a small niche TLD operating on a skeleton crew that may lack technical expertise, moving to Nomulus could be a false economy.

With this in mind, Google may have just created a whole new market for middleman RSPs — TLD management companies that can offer small TLDs a single point of contact for technical expertise and support but don’t need to build out and own their own expensive infrastructure.

The barrier to entry to the RSP market may have just dropped like a rock, in other words.

And Nomulus may work out more attractive to larger TLD operators such as Donuts, with existing teams of geeks, that can take advantage of Google’s economies of scale.

Don’t expect any huge changes overnight though. Migrating between back-ends is not an easy or cheap feat.

As well as ICANN costs, and data migration and software costs, there’s also the non-trivial matter of shepherding a horde of registrars over to the new platform.

How much impact Nomulus will have on the market remains to be seen, but it has certainly given the industry something to think about.