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West.cn to prop up .xyz renewals with $1.5 million subsidy

Leading Chinese registrar West.cn has said it will subsidize .xyz renewals to the tune of $1.5 million.

According to a West.cn press release, CEO He Xiaojiang made the announcement alongside XYZ.com counterpart Daniel Negari at meeting in Beijing on Friday.

The registrar’s .xyz customers “are going to get high rebate back from West.cn so that they can get very low renewal fees”, according to a translation of the original Chinese.

The subsidized renewal price, which starts in June, will be RMB 18 ($2.73), according to the company.

That’s about a $7 discount on West.cn’s usual renewal price of RMB 64.

First-year .xyz prices at the registrar are currently RMB 8 ($1.22).

West.cn is believed to have well over a million .xyz domains on its books. With over a third market share, it’s XYZ.com’s biggest registrar.

The press release points out that West.cn is not getting a special rate from XYZ (which would be against ICANN rules).

Negari declined to elaborate on the specifics of the subsidy.

But in what is no doubt a related move, he told DomainInvesting.com yesterday that XYZ has “reserved several million dollars to be spent with registrars and on advertising platforms for our 2 year anniversary”.

This ad spend will be made over the month of June, he said, to coincide with the June 2, 2014 general availability launch of .xyz.

Fifty registrars are participating, he said, calling it the “biggest sale” the industry has seen.

Whether through heavily discounted renewals or bargain first-year regs, it seems the company is set on making sure its DUM volume does not dip as its anniversary approaches.

It’s not unusual for registries to do special offers to coincide with launch birthdays.

.xyz currently has about 2.8 million registered domains, but about 1.8 million of those were registered after June 2015 and are not in need of renewal before the promotion period expires (though registrants can of course renew whenever they like).

CentralNic doing okay out of new gTLDs

Local former rival Minds + Machines may be struggling to turn a profit, but CentralNic seems to be doing quite well out of this new gTLD malarkey.

But not as well as you might expect. Large growth at its clients does not appear to have translated to a whole lot more revenue for CentralNic itself.

The company yesterday reported 2015 profit before tax of £1.45 million ($2.13 million), compared to £520,000 in 2014, on revenue up 71% at £10.39 million ($15.28 million).

While it may be best known nowadays as a back-end registry provider, its revenue is now fairly evenly split over its three reporting segments.

CentralNic runs the back-end registry for volume gTLDs including .xyz and Radix’s .site, .online, .website, and .space.

The company calls this “wholesale domain sales”, and it brought in £3.12 million last year, compared to £2.82 million in 2014.

You might think that the volume success of .xyz, which added about a million names in 2015, might have translated into a bigger boost, but it didn’t.

Its registrar business, which it got into through the acquisitions of Internet.bs and Instra, brought in £3.4 million, compared to £1.55 million in 2014.

Its third segment, “Enterprise including Premium Domain Name Sales” saw revenue of £3.85 million, compared to $1.69 million.

The enterprise business, which also included two software licenses and revenue from dot-brand clients, is easily the most profitable segment, with a 67% EBITDA margin. For wholesale, it’s 44%.

The £3.8 million of enterprise revenue included £3.22 million premium name sales, of which over £3 million came from a single buyer.

It’s not clear whether this was a single domain deal or a package of premiums, but it represents the most volatile element of CentralNic’s revenue.

Update (May 30) — This article originally misidentified “Company A” and “Company B” in CentralNic’s accounts as registry clients. In fact, according to CEO Ben Crawford, they’re registrar channel partners.

XYZ settles Verisign’s back-end switcheroo lawsuit

XYZ.com has settled a lawsuit filed against it against Verisign stemming from XYZ’s acquisition of .theatre, .security and .protection.

Verisign sued the new gTLD registry operator for “interfering” with its back-end contracts with the previous owners last August, as part of its campaign to compete against new gTLDs in the courtroom.

XYZ had acquired the .security and .protection ICANN contracts from security Symantec, and .theatre from a company called KBE Holdings.

As part of the transitions, all three applications were modified with ICANN to name CentralNic as the back-end registry services provider, replacing Verisign.

Verisign sued on the basis of tortious interference and business conspiracy. It was thrown out of court in November then amended and re-filed.

But the case appears to have now been settled.

Negari issued a grovelling not-quite-apology statement on his blog:

I am pleased to report that the recent case filed by Verisign against CentralNic, Ltd., XYZ and myself has been settled. After looking at the claims in dispute, we regret that as a result of our acquisition of the .theatre, .security and .protection extensions and our arrangement for CentralNic to serve as the backend service provider for these extensions, that Verisign was prevented from the opportunity to pursue monetization of those relationships. As ICANN’s new gTLD program continues to evolve, we would caution others who find themselves in similar situations to be mindful of the existing contracts extension owners may have with third parties.

Registries changing their minds about their back-end provider is not unheard of.

In this case, large portions of Verisign’s final amended complaint were redacted, suggesting some peculiarities to this particular switch.

If there was a monetary component to the settlement, it was not disclosed. The original Verisign complaint had demanded damages of over $2 million.

Rightside rejects Negari’s $5m new gTLD offer

Rightside has turned down Daniel Negari’s $5 million offer to acquire four of its new gTLDs, according to Negari.

The XYZ.com CEO told DI via email tonight:

I was looking forward to operating .Army, .Dance, .Dentist, and .Vet under the XYZ umbrella. I’m disappointed that Rightside didn’t entertain my offer, especially since I believe $5MM was more than fair. I believe these and other new TLDs are worth more to me than any other registry operator due to my growing enterprise. However, it’s understandable for Rightside to want to monetize on these assets.

Rightside has told him it had reviewed the offer and was not interested, he said.

The offer was made in a March 30 open letter to the company and Securities and Exchange Commission filing and expired last night, April 7.

There was some speculation about whether it was a genuine offer, just an attempt to boost Rightside’s share price, or both.

Negari and his COO, Mike Ambrose, own about 5% of Rightside between them, following an $8.5 million investment.

Rightside’s ability to grow revenue from its new gTLD portfolio has become the focus of attention due to the intervention of activist investor J Carlo Cannell of Cannell Capital, who reckons the company is paying too much attention to rubbish TLDs at the expense of its profitable registrar businesses.

Negari thinks he would be able to grow .army, .dance, .dentist, and .vet.

The largest of those gTLDs is .vet, with about 5,200 names in its zone file. It grew by 794 names in the last 90 days.

The other three are below 3,000 names, and are either shrinking or adding fewer than 10 names per day.

XYZ.com’s second-tier portfolio strings, such as .college, .rent and .theatre, are faring a little better, at least in terms of growth. But they are a little younger, and none are over 10,000 names.

.xyz passed two million names, growing like crazy

Kevin Murphy, February 9, 2016, Domain Registries

The .xyz gTLD at the weekend became the first new gTLD to pass the two million domains mark, as it experiences ridiculously fast growth.

Its zone file has grown by 274,315 domains in the last seven days, hitting 2,092,346 yesterday.

It added 130,000 names on Saturday alone.

That’s the kind of growth more usually associated with .com, and pre-2012 new TLD launch periods.

It’s reasonable to assume that the majority of these names are being registered for investment purposes. It seems Chinese registrars processed much of the spike.

But XYZ.com isn’t the only registry that saw a big spike over the weekend.

.CLUB Domains’ .club added almost 44,000 names to its zone between Saturday and Monday. Its usual daily add rate is around the 1,000 mark.