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Verisign wipes free TLDs from the world stats

Kevin Murphy, April 19, 2022, Domain Registries

The number of domain names registered globally dropped by over 25 million in the first quarter, but only because Verisign has stopped tracking .tk and its free sister ccTLDs in its quarterly estimates.

The latest Domain Name Industry Brief says that 2021 ended with 341.7 million registrations across all TLDs, substantially fewer that the 367.3 million it reported at the end of the third quarter.

But this is only because Verisign has decided to no longer count the six Pacific and African ccTLDs managed by Freenom, notably .tk, which had contributed 24.7 million names to the Q3 tally.

The report says: “the .tk, .cf, .ga, .gq and .ml ccTLDs have been excluded from all applicable calculations, due to an unexplained change in estimates for the .tk zone size and lack of verification from the registry operator for these TLDs.”

It sounds rather like there’s been another weird fluctuation in .tk’s numbers that threw off the overall trend picture again, and Verisign’s basically said “to hell with it” and decided to exclude Freenom from its reports from now on.

This means the normalized numbers for Q4 2021 — ignoring Freenom in all applicable quarters — are 341.7 million, up 3.3 million or 1.0% sequentially and up 1.6 million or 0.5% year over year, the DNIB states.

The Freenom business model is to give domains away for free, mostly, in the first instance. It makes its money by retaining and monetizing domains that either expire or, frequently, which it suspends for abuse.

.tk domains never get deleted, in other words, so counting them alongside TLDs with the industry-standard business model could give a misleading impression of the global demand for domain names.

It’s not so much that counting spam domains is bad — every TLD has a spam problem to a greater or lesser extent — but the lack of deletions can create faulty assumptions.

It’s also never been clear how Verisign and its third-party researcher, ZookNic, acquires its data on Freenom TLDs. Its .tk figure would often remain static for quarters on end, suggesting the data was only sporadically available.

I also tracked .tk’s published numbers independently for many years, and the last figure I have, from March 2019, is 41.3 million. It’s never been clear to me why the Verisign/ZookNic number has always been so much lower.

Verisign has always flagged up any oddities caused by .tk in its DNIB, and every edition has contained a footnote describing Freenom’s unusual practices.

The latest DNIB (pdf) says that .com had 160 million names, up 1.2 million, and .net had 13.4 million, down about 100,000, compared to Q3.

ccTLDs overall had 127.4 million, up about 700,000, a 0.6% sequential increase.

The ccTLD number was down by 5.3 million, or 4.0%, compared to the end of 2020, but that was due to a 9.4 million-name deletion by China’s .cn, which I noted in the second quarter and which Verisign calls a “registry-implemented zone reduction”.

Ignoring China, ccTLD names were up 4.1 million or 3.8%, the DNIB says.

Verisign only breaks out the top 10 ccTLDs separately, so the removal of .tk means that Australia’s .au is now in the top 10 list in tenth place with 3.4 million at the end of Q4. It will likely move up the ranks in the first quarter due to the release of second-level names, which has sped up its growth rate.

France’s .fr, with 3.9 million names, has now entered the overall top 10 TLDs due to .tk’s removal.

New gTLDs grew by 1.2 million names or 5.1% sequentially, but were down by pretty much the same amount annually, ending 2021 with 24.7 million names.

Registrar hit with second porn UDRP breach notice this year

Kevin Murphy, February 21, 2022, Domain Registrars

A Chinese registrar group has been accused by ICANN of shirking its UDRP obligations for the second time this year.

ICANN has put Hong Kong-based DomainName Highway on notice that is in breach of its contract for failing to transfer the domain 1ockheedmartin.com to defense contractor Lockheed Martin.

The domain is a straightforward case of typosquatting, with the initial L replaced with a numeral 1. At time of writing, it still resolves to a page of pornographic thumbnail links, despite being lost in a UDRP case January 4.

Under UDRP rules, registrars have 10 days to transfer a UDRP-losing domain to the trademark owner, unless a lawsuit prevents it.

The circumstances are very similar to a breach notice ICANN issued against ThreadAgent.com over a case of BMW’s brand being cybersquatted with porn last month.

Both ThreadAgent and DomainName Highway appear to be part of the XZ.com, aka Xiamen DianMedia Network Technology Co, which is based in China but has about 20 accredited registrars based in Hong Kong.

DomainName Highway has about 30,000 gTLD domains under management.

Omicron domain sells for $5,000

Kevin Murphy, December 9, 2021, Domain Sales

The domain name omicronvariant.com, hand-registered less than six months ago, has sold for $5,000 via Sedo, raising all kinds of questions about the value and future of Covid-19 variant-related domains.

The domain, at time of writing, resolves to a Sedo parking page containing ads unrelated (for me) to the pandemic or healthcare.

It was registered in early June, just a day or two after the World Health Organization announced that it would start naming coronavirus variants after letters of the Greek alphabet.

At that time, and to this day, the delta variant is the dominant strain worldwide, and yet deltavariant.com is currently listed for sale for $2,000 at GoDaddy/Uniregistry.

It seems somebody out there is willing to bet that omicron will have the transmissibility speed and longevity to outstrip delta, become dominant, and make dropping $5,000 on the matching .com a wise investment.

Assuming non-nefarious use, I personally struggle to see the end-user value.

It appears that any .com combination of a Greek letter and the word “variant” that had not already been registered by June was quickly snapped up by speculators after WHO revealed its naming scheme.

Some domains, such as alphavariant.com and xivariant.com, were already in use by companies with web sites that predate the pandemic.

The company Nu Variant seems to have dodged a bullet — WHO skipped that letter because it’s a confusing homophone of “new” in some English dialects. It also skipped xi, as it’s a common name that happens to be shared by the premier of China, which was bad luck for the xivariant.com domainer.

All the other letters between delta and omicron have been assigned to variants that fizzled out or have failed to garner much media attention.

At this point, it seems quite possible that WHO will run out of Greek letters in a matter of months, but it reportedly has no current plan for its coronavirus nomenclature after that.

Hold on to your stats! ShortDot gets two gTLDs approved in China

Kevin Murphy, September 28, 2021, Domain Registries

ShortDot, which makes a business repurposing unwanted gTLDs for the budget end of the market, said today it has had two more horses in its stable approved for use in China.

The company said that .bond and .cyou have been given the necessary nods by Chinese authorities.

What this could mean, if history is any guide, is a sharp increase in sales for the two extensions, possibly to the extent that they materially affect overall domain industry volume stats for the next few years.

ShortDot seems to think so, saying in a press release: “Given the massive success of .icu in China, it is quite clear that .bond and .cyou will follow suit to become largely successful.”

.icu currently has about 600,000 names under management, more than half of which are registered via Chinese registrars. Its numbers are on their way down.

At its peak 18 months ago it had more than 10 times as many, about 6.6 million, due to its low pricing and popularity among Chinese speculators.

The sudden rise and wholly predictable precipitous fall of .icu has been messing with overall new gTLD industry stats for the last couple of years. No volume analysis is complete without a .icu-related asterisk.

It’s by no means assured that the same will be true of .cyou and .bond of course.

.cyou, which was originally a dot-brand matching the ticker symbol of a Chinese company, had 118,000 names under management at the end of May and 136,000 in its zone file yesterday.

Names in .cyou can be had for $2 at Namecheap and NameSilo, its top two registrars, which together hold over 70% of the market.

.bond, originally an Australian university’s dot-brand, has fewer than 5,000 names at the last count and retails for about $55 retail at the low end.

As judge freezes assets, is this OnlineNic domain portfolio really worth $70,000?

A California court has frozen the assets of beleaguered Chinese/American registrar OnlineNic, at the behest of Facebook, which is suing the company for alleged cybersquatting.

The judge in the case Friday mostly granted Facebook’s request for a temporary restraining order, banning OnlineNic from transferring money or domains out of the country.

It had discovered that the registrar had started transferring domains it has registered in its own name — about 600 of them — out of the country, to China-based Ename.

OnlineNic had told the court it could no longer afford to defend the case, and that it would shut up shop July 26.

Following Facebook’s request for a TRO, the registrar said it was merely moving the names to Ename so it could use its secondary market platform to raise $70,000 of the $75,000 needed to pay the so-called “Special Master”.

This is a court-appointed agent who had conducted a review of OnlineNic’s ticketing system records and found the company had deleted or obfuscated huge chunks of potential evidence.

OnlineNic has now told the court that it’s found a potential buyer, willing to pay $70,000 for the names in question.

This is the portfolio (pdf).

I’m no domain broker — I’m not even a domain investor — but even I have to wonder who would pay $70,000, or about $120 per name, for this junk. By sight alone, hardly any of them seem to be worth the base reg fee.

I’m guessing they’re dropped domains with traffic and/or the opportunity of selling them back to a forgetful original registrant.

Facebook’s war on privacy claims first registrar scalp

China’s oldest accredited registrar says it will shut up shop permanently next week after being sued into the ground by Facebook, apparently the first victim of the social media giant’s war against Whois privacy.

Facebook sued OnlineNIC in 2019 alleging widespread cybersquatting of its brands. The complaint cited 20 domains containing the Facebook or Instagram trademarks and asserted that the registrar, and not a customer, was the true registrant.

The complaint named ID Shield, apparently OnlineNIC’s Hong Kong-based Whois privacy service, as a defendant and was amended in March this year to add as a defendant 35.cn, another registrar that Facebook says is an alter ego of OnlineNic.

The amended complaint listed an addition 15 squatted domains, for 35 in total.

This week, OnlineNIC director Carrie Yu (aka Carrie Arden aka Yu Hongxia), told the court:

Defendants do not have the financial resources to continue to defend the instant litigation, and accordingly no longer intend to mount a defense. Defendants do not intend to file any oppositions to any pending filing… Subject to any requirements of ICANN, Defendants intend to cease business operations on July 26, 2021.

But Facebook reckons the registrar is about to do a runner to avoid paying almost $75,000 in court fees already incurred and avoid the jurisdiction of the California court where the case is being heard.

Facebook had asked for $3.5 million in penalties in a proposed judgment and OnlineNIC had not opposed.

While it presents itself as American, it appears that OnlineNIC is little more than a shell in the US.

Its official headquarters are little more than a lock-up garage surrounded by builders’ merchants in a grim, windowless facility just off the interstate near Oakland, California.

Its true base appears to be a business park in Xiamen, China, where 35.cn/35.com operates. The company has boasted in the past of being China’s first and oldest ICANN-accredited registrar, getting its foot in the door when the floodgates opened in 1999.

Facebook is now asking the court for a temporary restraining order freezing the defendants’ financial and domain assets, and for a domain broker to be appointed to liquidate its domain portfolio.

If you’re a legit OnlineNIC customer, you might be about to find yourself in a world of hurt.

OnlineNIC had just over 624,000 gTLD domains under management at the last count. 35.cn had another 200,000.

The lawsuit is one of three Facebook is currently fighting against registrars, one prong of its strategy to pressure the ICANN community to open up Whois records rendered private by EU law and consequent ICANN policy.

OnlineNIC is the low-hanging fruit of the trio and the first to be sued. It already faced cybersquatting cases filed by Verizon, Yahoo and Microsoft in 2009. The Verizon case came with a $33 million judgment.

Facebook has also sued the rather less shady registrars Namecheap and Web.com (now Newfold Digital) on similar grounds.

Domain regs dip for second quarter in a row and it’s all China’s fault

There were 363.5 million domain name registrations across all top-level domains at the end of March, down by 2.8 million names compared to the end of 2020, Verisign’s latest Domain Name Industry Brief shows.

But the losses can be attributed mostly to China, which saw plummeting .cn regs in the ccTLD world and big declines across gTLDs popular with Chinese speculators.

In .cn, regs were down a whopping four million at 20.7 million in the quarter. China has historically been subject to steep fluctuations due to local government regulations.

Overall, ccTLD registrations were down 2.4 million at 156.5 million, but that seems to be all down to China.

All the other ccTLDs in the DNIB top 10 were either flat or up slightly on Q4. The frequent wild-card .tk did not have an impact on this quarter’s numbers, staying flat.

Verisign does not break down new gTLD registrations, but zone file and transaction report data shows that the likes of .icu and .wang, which typically sell first-year regs very cheaply, were hit by material junk drops in Q1.

ShortDot’s .icu zone file shrank by 2.5 million names between January 1 and March 30. It’s still in decline in Q2, but the trajectory isn’t nearly as steep. It had 814,000 zone file names at the end of Q1.

Zodiac’s .wang was at 525,000 at the end of 2020 but had dropped to 86,000 by March 30.

.top also lost around half a million names in the first quarter.

The vast majority of regs in .icu, .top and .wang come through Chinese registrars, which often sell for under a dollar for the first year.

The DNIB reports that .com performed well as usual, up from 151.8 million reported in the Q4 report to 154.6 million, but Verisign bedfellow .net was once again flat at 13.4 million.

MMX’s year marked by terrible renewals

MMX saw its revenue dip in 2020, and it reported shocking renewal rates at two of its highest-volume gTLDs, according to the company’s annual financial results, published this morning.

The portfolio registry, which is in the process of selling off essentially its entire operating business to GoDaddy, reported revenue of $16.8 million for the year, down from $17.2 million in 2019.

Profit was up very slighty, to $2.9 million from $2.8 million.

The 2019 results included a few one-off gains, including $588,000 from losing a new gTLD auction, which accounted for most of the 2020 revenue decline.

But the company also reported a 19% decline in domains under management, from 2.46 million to 1.99 million, based on some terrible renewal rates in its .vip and .work gTLDs.

The DUM decline can be attributed mostly to .vip, a popular TLD among Chinese speculators, which started 2020 with around 1.4 million domains but finished the year with just over a million.

.work actually ended the year up on where it started, with around 709,000 names under management.

But MMX today disclosed that the renewal rates for .vip and .work were 36% and 18% respectively. In a business where 70%+ is considered healthy, these are some poor numbers indeed.

However, the company discontinued first-year promotions on these TLDs in 2020, focusing instead on selling domains likely to lead to recurring renewal revenue, which lead to 14% (.vip) and 19% (.work) increases in revenue.

Fewer domains. More money.

MMX said that it is seeing these trends continuing into 2021. Public transaction reports show both these TLDs losing 40-50,0000 names in January. The company expects revenue to fall 4% in the first quarter compared to Q1 2020.

One bright spot appears to be “The Great Relese”, the company’s move last month to mark down hundreds of thousands of premium-priced domains. That’s brought in $170,000 since its April 23 launch.

One basket where the company is placing a lot of its eggs is AdultBlock, the trademark protection service it inherited when it acquired ICM Registry a few years back. It enables customers to block their brands in .xxx, .porn, .adult and .sex without actually having to register the names.

The 10-year period ICM allowed brands to block when it launched in 2011 is coming to an end, so MMX is banking on renewals (which retail at $349 to $799 per year before multi-year discounts) to boost revenue.

“While it is early in the AdultBlock Sunrise B renewal period, we are encouraged by Registrar interest and some early sales of this product,” CEO Tony Farrow said in a statement.

This reliance on AdultBlock for short-term organic growth was one of the reasons MMX is selling up to GoDaddy.

The market-leading registrar and fast-emerging registry consolidator agreed to pay $120 million for MMX’s portfolio, which will leave MMX as a shell company only long enough to distribute the cash to investors before fading away quietly.

That deal has an August deadline to close and is dependent on approvals from business partners, ICANN and the Chinese government.

China could block GoDaddy’s $120 million MMX swoop

GoDaddy’s proposed $120 million acquisition of essentially all the meaningful assets of portfolio gTLD player MMX will be subject to Chinese government approval, it emerged this morning.

Following GoDaddy’s bare-bones press release announcing the deal last night, this morning MMX added a whole bunch of flesh, including a list of closing conditions, in its statement to shareholders.

GoDaddy is proposing to buy essentially MMX’s entire operating business — the 28 gTLD registry agreements with ICANN, including the four porn-related strings belonging to subsidiary ICM Registry.

Not only do MMX shareholders have to approve the deal — and holders of 64% of the shares have already promised they will — but ICANN approval will be required for the registry contracts to be reassigned.

This may prove a hurdle or delay if third parties raise competition concerns, but ICANN’s pretty opaque approval process generally doesn’t frown too much on industry consolidation.

Another known unknown is China.

MMX told shareholders that it needs: “Approval of Chinese authorities for the change of control of MMX China (including change of control in respect of relevant licenses held by MMX China permitting it to distribute TLDs in China).”

The reason for this is quite straightforward: in volume terms, quite a lot of MMX’s business has been in China in recent years. Popular sellers such as .vip, with over 800,000 names today, have been driven primarily by Chinese investors.

A local presence (in this case MMX China) and approval from the Ministry of Industry and Information Technology is required to legally sell a TLD to Chinese registrants via Chinese registrars.

I’ve no particular reason to believe MIIT will withhold its approval for MMX China to move into GoDaddy’s ownership, but a failure to get the nod from China appears to be a deal-breaker.

MMX’s statement to the markets this morning also provided some clarity on what exactly it is that GoDaddy is proposing to buy.

The gTLDs to be acquired are: .vip,.nrw, .casa, .vodka, .xxx, .fit, .miami, .fishing, .porn, .beer, .surf, .boston, .adult, .yoga, .garden, .abogado, .work, .fashion, .horse, .rodeo, .sex, .wedding, .luxe, .dds, .law, .bayern, .cooking, and .country.

It seems that when Tony Farrow took over as MMX CEO last year, after his predecessor left due to an accounting snafu, he had the portfolio audited and came to the conclusion that it could expect only pretty crappy growth over the coming years.

It had banked on selling expensive defensive trademark blocks in its four porn-themed gTLDs to big brands to make up the shortfall, but then GoDaddy approached in December brandishing its rather large checkbook.

MMX reckons the deal values the company at a 92% premium over its closing share price Tuesday, and 87% and 78% premiums over its 20-day and 90-day average selling price.

.bayern, .nrw and the four porn gTLDs belong to subsidiaries that GoDaddy will acquire outright, but GoDaddy is not proposing to buy MMX itself.

Rather, MMX will likely stay alive and publicly traded long enough to redistribute its cash windfall to investors and sell or wind down about a dozen non-operating subsidiaries.

It has a transition services agreement to manage certain business functions of the registry until January next year, which sounds a bit like what fellow GoDaddy acquisition .CLUB Domains explained to me last night.

After that, London’s Alternative Investment Market rules will treat MMX as a “cash shell”, and it will either have to acquire an operating business from somewhere or make itself the subject of a reverse takeover by a company looking for a quick way to the public markets.

Domain industry shrank in Q4, but as usual there’s a big BUT

The worldwide domain name count shrank in the fourth quarter, according to newly released Verisign data, but as usual the numbers were hugely impacted by big swings in just a few TLDs.

The latest Domain Name Industry Brief (pdf), which is mainly compiled from zone file counts, shows that 2020 ended with 366.3 million names, down by 4.4 million or 1.2% compared to the end of the third quarter.

It’s the free and almost-free TLDs that swung the math.

Remarkably, industry wild-card .tk actually shrank during the quarter. This is highly unusual, as the registry’s business model is based on giving out names for free, never deleting domains, and monetizing the traffic to expired or suspended names.

It saw domains down by 2.8 million names over the quarter, from 27.5 million to 24.7 million.

Another big dipper was .icu, which sells cheap (usually under $1) and appeals to speculators largely in China.

While it slipped out of the top 10 TLDs, meaning the DNIB no longer breaks out its numbers, DI’s own zone file counts show its zone decline from 5.3 million to 3.4 million during Q4, a 1.9 million decline.

Notably spammy new gTLD .top, which also costs next to nothing and is popular in China, also had a role to play. Its zone count was down by about 900,000 between September 30 and December 31.

Those three TLDs alone account for a loss of 5.6 million names, far more than the 4.4 million industry-wide quarterly drop calculated by Verisign.

The impact of .icu’s continued spiral downwards is likely to be felt in Q1 2021 also. It’s lost another 2.4 million zone file names since the start of the year.

Verisign said the the universe of ccTLD domains contracted by 1.7 million of 1% during the quarter, ending the year with 158.9 million names.

The .tk shrinkage of course more than accounts for this dip. Without it, ccTLDs would be up by 1.1 million names or 1.1%. The major, top-10 ccTLDs mostly showed six-figure growth, the DNIB reflects.

New gTLDs were down 4.2 million names or 13.8% sequentially, ending the quarter with 26 million.

In addition to the aforementioned .top and .icu, this figure appears to have been affected by six-figure losses in some of the highest-volume, lowest-priced new gTLDs, including .club, .site .work and .vip.

In the main legacy gTLDs, Verisign’s own .com grew by 1.5 million names, from 151.8 million to 150.3 million, during the quarter. Its .net was again flat at 13.4 million. Public Interest Registry’s .org gained a (rounded) 100,000 names, ending the year at 10.3 million.

The annual numbers across the industry for 2020 have better optics. The DNIB shows that domain volume was up by 4.0 million or 1.1% year over year.

That breaks down into a 6.3 million increase in .com, a 1.3 million increase across the ccTLDs, and a 3.3 million decrease in new gTLDs, not all of which can be explained away by factoring out .icu and .top.