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.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.

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.

CentralNic extends XYZ deal until 2032

Kevin Murphy, September 7, 2017, Domain Registries

CentralNic and XYZ.com have extended their registry services pact for the next fifteen years, according to CentralNic.

Announcing its first-half 2017 financial results today, CentralNic said the back-end contract has been extended until 2032.

It’s an unusually long duration for a registry services contract, which are usually much more likely to run about five years.

It even lasts 10 years beyond the expiration of XYZ.com’s own ICANN contracts (though renewal of these is a near-certainty).

The deal covers all .xyz domains, as well as all of the other TLDs in XYZ.com’s portfolio. That currently includes the likes of .rent, .storage and .college.

CentralNic said it “will receive a fixed fee based on the volume of .xyz registrations and subscriptions managed” under the new deal.

In a statement to the markets, CEO Ben Crawford said the relationship “has been updated to normalise the Company’s revenues and profits going forward.”

I believe the previous contract contained a per-domain component, which exposed CentralNic’s revenue to .xyz’s erratic pricing-influenced growth trajectory.

.xyz’s zone file has shrunk by a whopping four million domains since this time last year, causing it to lose the crown of highest-volume new gTLD, due to it offering free or almost free domains that expired without renewing after a year.

However, CentralNic disclosed that the proportion of its own wholesale transaction volumes that were renewals (rather than adds and transfers, I assume) was 18% in the first half, up from 2% in the same 2016 period.

For the six months ended June 30, the company had overall revenue of £10.6 million ($13.9 million), up 18.5% year over year.

Its net loss after tax was £619,000 ($810,000), down from £1.3 million. At the EBITDA level, profit was £1.4 million ($1.8 million) compared to $900,000 in H1 2016.

While I still stubbornly think of CentralNic as primarily a registry play, in fact the company now gets about three quarters of its revenue today from its retail registrar division, which contributed just shy of £8 million to the total in H1.

Instra, the Australian registrar it acquired at the end of 2015, contributed £5.83 million.

The wholesale division, registry back-end services — contributed £1.82 million to revenue and £450,000 to EBITDA in the half.

That’s despite CentralNic being the back-end for six of the top 20 new gTLDs by volume — .website, .space, .tech, .site, .online, and .xyz

If we tally up the number of domains in only those six TLDs, we get to about 4.2 million, per their zone files.

The company’s third reporting unit, Enterprise, contributed £800,000 ($1 million) in the half, of which £360,000 ($471,000) came from premium domain sales.

.storage to have pricey second sunrise

The .storage gTLD is to get a second sunrise period after being acquired and repurposed by XYZ.com.

The registry will operate a “Trademark Landrush Period” for three weeks from November 7 as the first stage of .storage’s reboot as an open-to-all gTLD.

It’s not technically a “sunrise” period under ICANN rules — that phase was already completed under previous owner Extra Space Storage — nor is it restricted to trademark owners.

Basically anyone with the money will be able to buy a .storage domain during the period, but at a price.

One registrar is reporting that registrants will have to pay a $1,500 application fee on top of the soon-to-be-standard higher $699-per-year registration fee.

That’s considerably more than most new gTLDs charge during their regular sunrise phases.

There’s no need to own a matching trademark, so neither the registry, registrars or Trademark Clearinghouse have any trademark verification costs to bear.

But that also means anyone can pick up any generic, dictionary .storage domain they want without the need for paperwork. XYZ has previously said that all domains will be available at the same price, regardless of their previous “premium” status.

I can see some intellectual property interests being uneasy with how this relaunch is handling trademarks.

Under its former management, .storage was set to be tightly restricted to the physical and data storage industries, reducing the chance of cybersquatting, so some brands may have avoided the sunrise period.

After the relaunch — general availability starts December 5 — there will be no such restrictions. However, the high price of standard registrations is likely to deter all but the richest or dumbest cybersquatters.

XYZ.com acquired .storage for an undisclosed sum in May. There are currently about 800 domains in the .storage zone file.

Junk drop cuts .xyz in half, .top claims volume crown

The .xyz gTLD has seen its zone file halve in size, as millions of free and cheap domains were not renewed.

The former volume leader among new gTLDs started this month with a tad over 5.2 million domains in its zone.

But its July 17 zone contained 2.5 million, much less than half as many, DI analysis shows.

The precipitous decline means that Chinese-run gTLD .top, increasingly notorious as a go-to TLD for spammers, is now literally at the top of the league table, when you measure new gTLDs by zone file volume, with 2.6 million names.

The primary reason for .xyz losing so many names is of course the expiration of most of the domains that were sold for just $0.01 — or given away for free — in the first few days of June 2016, and the aggressive promotional pricing on offer for the remainder of that month.

On May 30, 2016, there were just under 2.8 million names in the .xyz zone. By July 1, 2016, that number had topped 6.2 million, an increase of 3.4 million over a single month.

That was .xyz’s peak. The zone has been in gradual decline ever since.

Domains generally take 45 days to drop, so it’s entirely possible XYZ.com will see further losses over the next month or so.

There’s nothing unusual about seeing a so-called “junk drop” a year after a TLD launches or runs a free-domains promotion. It’s been well-understood for over a decade and has been anticipated for .xyz for over a year.

But compounding its problems, the .xyz registry appears to still be banned in China, where a substantial portion of its former customer base is located.

The company disclosed over two months ago that it had a “temporary” problem that had seen its license to sell domains via Chinese registrars suspended.

The ban was related to XYZ falling out with its original “real name verification” provider, ZDNS, which was tasked with verifying the identities of Chinese registrants per local government regulations.

I’ve never been able to confirm with either party the cause of this split, but everyone else involved in the Chinese market I’ve asked has told me it related to a dispute over money.

Regardless, two months later the major Chinese registrars I checked today still appear to not be carrying .xyz names.

XYZ has meanwhile signed up with alternative Chinese RNV provider Tele-info, and just three days ago submitted the necessary paperwork (pdf) with ICANN to have the move approved as a registry service under its contract.

In that request, XYZ said the new RNV service “will allow XYZ to reenter certain domain name markets”, suggesting that it has not yet regained Chinese government approval to operate there.

.xyz sets price for numeric domains at $0.65

XYZ.com has announced that it will charge just $0.65 wholesale for over a billion numeric domain names in .xyz.

The revelation came as part of a confusing launch of what the registry calls its “1.111B Class” domains.

That’s because the pricing affects all 1.111 billion numerical domains of six, seven, eight and nine digits in .xyz.

These will now all register and renew for $0.65 or a recommended $0.99 retail.

That’s the same price that regular alphanumeric .xyz domains are selling at at many registrars, but the pricing for the 1.111B names is said to be fixed forever; it’s not a temporary promotion.

The announcement was themed on a take on the 16-year-old “All Your Base” meme and a white paper (pdf) written in the color scheme and typeface of a 1990s Unix terminal.

There’s a whole lot of fluff involved, but the gist of it appears to be that XYZ thinks these domains have value, when registered in bulk, to do stuff like address “Internet of Things” devices. The white paper states:

With the emergence of the Internet of Things (IoT), the 1.111B Class serves as a platform to easily and uniquely identify different devices, ranging from laptops to smart thermostats. In fact, registrants can even secure tens, hundreds, thousands to millions of domains in sequential order to create a block. These blocks can match device serial numbers or vehicle VIN numbers, then be used as portals for consumers to connect with their products, and for their products to receive updates from manufacturers.

There are of course far cheaper ways to go about this, such as using subdomains of an existing branded domain (which would have the added benefit of semantic value).

XYZ also talks in vague terms about these cheap domains being similar to Bitcoin, with reference to how Chinese domainers trade worthless domains as a kind of virtual currency.

I must confess I don’t get this idea at all. In my mind, owning a domain that has no possibility of an end-user buyer is more of a liability that an asset.

Still, it’s interesting to see a registry attempting to market domains for non-traditional purposes, so I’m curious to see how it plays out.

XYZ acquires .storage, its 10th gTLD

XYZ.com said today that it has acquired the half-launched new gTLD .storage from its original owner.

The terms of the deal were not disclosed, but CEO Daniel Negari said in a blog post that it has been funded using some of the “excess of cash flow” from sales of .xyz domains.

The original .storage registry was Extra Space Storage, which rents out physical storage units in the US.

It started its protracted launch period a little over a year ago but had not planned to go to general availability until July this year.

Having apparently passed through its sunrise period and a special landrush for the storage industry, which ended in January, it has fewer than 800 domains in its zone file.

It looks like XYZ will be essentially relaunching the gTLD from scratch, with a new sunrise period penciled in for November and an early access period and GA slated for December.

Pre-launch pricing is around the $80 mark at the few registrars I checked today, and it looks like that will remain under the new management.

That’s despite XYZ talking today about .storage as a “premium” vertically-focused TLD along the lines of its $3,000 .cars or $750 .theatre.

The company said that it will not hold back reserved names at higher, premium pricing. Even nice-looking domains such as cloud.storage will be available at the base fee, it said.

The new acquisition becomes the 10th that XYZ has a hand in running, if you count the three car-related gTLDs it manages in a joint venture with Uniregistry. The others are .security, .rent, .protection, .theatre, and .college.

.xyz, .club and .vip get the nod to sell in China

Kevin Murphy, December 5, 2016, Domain Registries

The Chinese government has granted licenses to operate in the country to its first tranche of new gTLDs — .vip, .club and .xyz.

The agreements mean that Chinese registrars will be able to give their Chinese customers the ability to actually use their domains for web sites.

It also means the companies will be obliged to censor domains the government does not like, but only those domains registered via Chinese registrars.

The Ministry of Industry and Information Technology announced the licenses, given to the Chinese subsidiaries of Minds + Machines, .CLUB Domains and XYZ.com respectively, today.

M+M CEO Toby Hall told DI that it’s “a great moment of support for Chinese registrars”, giving them a “very clear signal about which TLDs they can focus on”.

XYZ.com said in a blog post that some of its Chinese registrars (its biggest channel) are planning on offering discounts to celebrate the approval.

It’s always been possible for Chinese people to register new gTLD domains via Chinese registrars — it’s estimated that 42% of the 27 million new gTLD domains in existence today are Chinese-owned.

However, Chinese citizens need a government license if they want to launch a web site, and the government only issues licenses for domains in approved TLDs.

In addition to .cn and China-based gTLDs, which were the first to be given the nod, Verisign was approved earlier this year for .com.

Hall said that while .vip has been popular with Chinese domainers, the MIIT license means it can start to tap the small business market there too.

Obtaining the license means that the three registries, which are all based in the US or Europe, will have to comply with Chinese regulations when it comes to Chinese customers.

That basically means the Chinese government gets to censor pretty much anything it doesn’t like, up to and including sites that “spread rumors”.

Hall said that there’s no chance of this censorship bleeding out to affect non-Chinese customers.

M+M, along with XYZ and .CLUB, are using Chinese registry gateway ZDNS to act as a proxy between their own back-ends (Nominet for .vip, Neustar for .club and CentralNic for .xyz) and Chinese registrars.

“All of our Chinese web sites go through ZDNS, so only web sites going through ZDNS would be affected,” Hall said, referring to the censorship rules.

Hall added that he was “not aware” of there being a blocklist of politically sensitive strings that Chinese customers are not allowed to register.

NameCheap stops selling .xyz domains

Kevin Murphy, October 11, 2016, Domain Registrars

NameCheap may have sold over a million .xyz domains, but apparently it will sell no more than that.

The registrar confirmed to DI this evening that it is no longer taking .xyz registrations. It declined to explain why.

It has also stopped selling .college and .rent domains — two other gTLDs owned by XYZ.com. Other new gTLDs are not affected.

It’s reportedly not accepting inbound transfers either, though existing domains can be renewed.

The switch-off happened at the end of last month, a NameCheap representative said.

That’s just one month after the registrar celebrated its one millionth .xyz registration, which XYZ.com commemorated with a blog post bigging up NameCheap’s user-customers.

The move is peculiar indeed. NameCheap is the third highest-volume .xyz registrar, behind West.cn and Uniregistry, responsible for about 15% of .xyz’s domains under management.

It’s also NameCheap’s biggest direct-selling gTLD by a considerable margin.

NameCheap is well-known as primarily an eNom reseller — it accounts for 28% of eNom’s domains under management and 18% of its revenue, largely from .com sales.

But with new gTLDs it has started selling domains on its own IANA ticker, meaning a direct connection to the registry and more gross profit for itself.

According to June’s registry reports, the million .xyz names accounted for roughly two thirds of NameCheap’s total DUM (not counting names sold via eNom).

The closet rival in its portfolio is .online, which provided the registrar with about 81,000 DUM.

The registrar added about 350,000 .xyz domains in June, a month in which it briefly offered them at $0.02 each.

At that time, the company reported technical issues that led to a 12-24 hour backlog of registrations to process, though its blog post announcing the problem appears to have since been deleted.

NameCheap has declined to comment on the reason for the surprise move, and XYZ did not immediately respond to a request for comment.

The fact that all of XYZ.com’s TLDs have been cut off suggests some kind of dispute between the two companies, but the fact that renewals can still be processed would suggest that NameCheap has not lost its .xyz accreditation.

More info if I get it…

XYZ hires .top guy as first China employee

Kevin Murphy, October 11, 2016, Domain Registries

XYZ.com has hired its first Beijing-based employee, as part of its ongoing plan to formally enter the Chinese market.

The company said yesterday that it has appointed Mason Zhang, until recently chief marketing office at .top gTLD registry Jiangsu Bangning Science & Technology Co, as its new director of business development for China.

It’s part of XYZ’s seemingly interminable entry to the Chinese market, which is over a year old.

While the majority of .xyz’s registrations have been into China, the registry (along with pretty much every other Western registry) still does not have the necessary government permissions so that its customers can start using their names.

It kicked off a process to get ICANN approval for its Chinese gateway, operated by ZDNS, a year ago, and set up the mandatory Wholly Owned Foreign Enterprise in January.

The company said in a blog post that it expects to get its Chinese accreditation “very soon”.

Zhang’s former employer, .top, is second only to .xyz in terms of new gTLD registration volume, also due to Chinese sales. It has about 3.7 million names in its zone file, compared to .xyz’s 6.1 million.