Recent Posts
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- Epik gets acquired again! The plot thickens…
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- Epik to reveal its owners soon
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- First bits of new gTLD Applicant Guidebook expected next week
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- .blackfriday is still a bit rubbish
- Internet Naming Co acquires five more gTLDs
- Domain universe grows despite .com drag
Cloudflare selling all domains at cost: “All we’re doing is pinging an API”
Content delivery network provider Cloudflare has promised to sell domains in all TLDs at the wholesale cost, with no markup, forever.
The company made the commitment yesterday as it announced its intention to get into the registrar business.
Founder Matthew Price used the announcement to launch a blistering attack on the current registrar market, which he said is charging “crazy” prices and endlessly upselling their customers with unwanted, worthless products. He blogged:
why should registrars charge any markup over what the TLDs charge? That seemed as nutty to us as certificate authorities charging to run a bit of math. When we see a broken market on the Internet we like to do something about it.
…
we promise to never charge you anything more than the wholesale price each TLD charges. That’s true the first year and it’s true every subsequent year. If you register your domain with Cloudflare Registrar you’ll always pay the wholesale price with no markup.
For instance, Verisign, which administers the .com TLD, currently charges $7.85 per year to register a .com domain. ICANN imposes a $0.18 per year fee on top of that for every domain registered. Today, if you transfer your .com domain to Cloudflare, that’s what we’ll charge you per year: $8.03/year. No markup. All we’re doing is pinging an API, there’s no incremental cost to us, so why should you have to pay more than wholesale?
There are catches, of course.
For starters, the service is not available yet.
Price wrote that Cloudflare will roll it out gradually — for inbound transfers only — to its “most loyal” customers over an unspecified period. Even customers on its cheapest plans will get access to the queue, he wrote.
Eventually, he said, it will be available “more broadly”.
It will be interesting to see if the no-markup pricing could become available to non-customers too, and whether it sticks to its business model when its support lines start ringing and it becomes apparent the business is actually big ole cash vampire.
Cloudflare has been ICANN-accredited for several years, but it’s only been offering registrations to high-value enterprise customers so far.
My records show that it has not much more than 800 domains under management, all in .com, .net, .org and .info.
The announcement was made, perhaps not coincidentally, a couple days after CRM software provider Zoho made headlines when its 40 million customers were taken offline because its former registrar suspended zoho.com over a trivial level of abuse. In response to the screw-up, Zoho transferred the domain to Cloudflare.
Besides support costs, being a registrar comes with unavoidable liabilities. When their first customer that loses a domain sue them, they might want to take a fresh look at P&L for this service.
What about CC processing fees, CC fraud costs and customer service cost? If they don’t account for all that it means they won’t last very long or they’ll be subsidizing it with profits from other parts of their business. If it’s the latter then they’ll have to engage in the upselling too because otherwise there is no point in running this registrar business of their’s.
People that will register domain name with them or transfer domain names to them should check, once the registration or transfer is completed, if they are (still) listed as the registrant.
It will be a loss leader, but the story of “We’re just pinging” could make them one of the largest registrars in the world in a very short time period if executed properly.
Finally! What a good idea. They’ll make money on expired auctions and hosting.
Great early find, thanks for sharing.
I wonder how they will manage to take care of the basic support (trouble with transferring a domain name, parking, whois updating, etc…), and obviously there are already some strings attached (you can transfer only domains using Cloudflare, there’s a waiting line, etc…).
Even with that, it’s a great idea, let’s see how well they execute.
Hopefully domain registrars will eventually lower domain name registration and renewal fees.
Domainers and end-users are overpaying for domain names. Paying more at some registrars than others.
At some registrars you have to buy a discount plan just to get domain prices the same as other domain registrars.
That is price gouging!
I hope they are successful because innovation is important for our industry; and anything which makes names more affordable and accessible is good for the free-internet. That said, I agree with the first two commentators. Eventually there needs to be a profit center or strategic angle otherwise why bother. Creating a full-service (fully featured) domain registrar is like building an airline. It requires passion, vision, and has a lot of moving parts that are expensive to maintain. Something, somewhere in that apparatus, has to make the money.
Of course this has nothing to do with innovation. And we all know that for CF it doesn’t matter whether you are on the “good” side or not. So this is (potentially) a black day for internet security.
This seems rather underhanded considering the close partnerships Cloudflare has with a number of registrars/hosts – which has helped CloudFlare achieve their growth.
While some registrars certainly do have very “healthy” margins others sell for pennies and barely scrape by, over simplifying the costs and processes of operating a domain registrar doesn’t help anyone in the industry and just encourages the race to the bottom and requirement to exploit user data in order to turn a profit.
margins others sell for pennies and barely scrape by, over simplifying the costs and processes of operating a domain registrar doesn’t help anyone in the industry and just encourages the race to the bottom and requirement to exploit user data in order to turn a profit.