Reseller loss hits Tucows’ DUM but not revenue

Tucows reported revenue growth in its domains business in the second quarter, despite its domains under management going down due to a major reseller.

The company said last night that domains revenue was up 8% annually to $67.6 million at the end of June, with adjusted EBITDA for the segment going up 12% to $12.5 million.

But Tucows had 24.02 million domains under management at the end of the quarter, down from 24.3 million three months earlier. David Woroch, CEO of the domains business said in prepared remarks:

As anticipated, total domains under management and transaction volumes declined modestly—down 2% and 3%, respectively—reflecting the continued impact of one reseller that has moved a portion of its portfolio in-house.

Despite this, revenue for the wholesale/reseller domains channel rose 8% on last year to $57.3 million. Retail domains revenue was up 10% year over year to $10.3 million.

Including all of the company’s non-domains businesses, Tucows Q2 revenue was up 10.1% to $98.5 million and adjusted EBITDA was up 37% to $12.6 million, both compared to the year-ago quarter.

GoDaddy counts cost of losing .co deal

GoDaddy has revealed how hard losing its .co registry back-end deal will hit revenue, but insisted that it has no plans to exit the registry business.

The company said in its second-quarter earning release that it anticipates “an approximate 50 basis point headwind to bookings and revenue” when the deal expires in the fourth quarter.

So that’s 0.5%, or about $6 million given GoDaddy’s quarterly revenue came in at $1.2 billion in the second quarter. CFO Mark McCaffrey said the loss will be “immaterial in and of itself” and will not prevent the company hitting its financial targets.

The loss of the .co deal (possibly coupled with the separate recent loss of the .in deal) inspired one analyst to ask executives whether the company has plans to exit the registry business, but McCaffrey said there was “no change in our philosophy”:

This was a one-off situation where we went out to rebid and the profitability metrics that were needed to continue in this relationship just weren’t there for us. So I would say it’s more on the strategy of our profitable growth and making sure we stay disciplined to our framework versus a change in philosophy

Dejargonizing this, it appears GoDaddy is saying “the other guys could do it cheaper”. In the case of .co, the other guys were Team Internet, which will receive 8% of .co’s gross revenue, versus the 19% GoDaddy was getting. (Update: Team Internet says in the comments that GoDaddy bid this time at 9%.)

For the second quarter, GoDaddy reported overall revenue up 8% at $1.2 billion and net income of $199.9 million, up 37% compared to the same quarter last year.

The “Core Platform” reporting segment, which includes domain name sales, saw revenue up 5% year over year to $753.7 million. Vanilla domain sales and aftermarket sales were both up 7%.

Namecheap loses attempt to bring back .org price caps

ICANN seems to have won a big victory in its ongoing tussle with Namecheap over price caps for .org and .info domains.

A California court ruled late last week that it cannot force ICANN into pricing talks with the registries for the two gTLDs, denying a motion that Namecheap filed back in April.

The dispute dates back to 2019, when ICANN removed price caps from Public Interest Registry’s .org registry contract, which had limited PIR to 10% annual increases.

Namecheap used ICANN’s own Independent Review Process accountability mechanism to challenge this decision and won, kinda, in 2022.

The IRP panel found ICANN had breached its bylaws and issued “recommendations” such as commissioning an economic report into price caps, deciding if price caps should return, and if so then talking to the registries about bringing them back.

When there’d been little action by early 2024, Namecheap sued to get the backing of the court for the IRP decision. It was successful, with the court ruling this February that the IRP findings were valid.

In the meantime, ICANN had obtained its economist’s report and passed a resolution stating that it should not bring price caps back to the two registry contracts.

But Namecheap had a final crack at getting the court to force ICANN into price cap. In a motion this April, it asked the court to instruct ICANN to “approach the registry operators for .ORG and .INFO to agree to some form of price control”.

The court didn’t buy its arguments, however, last week denying Namecheap’s requests on the grounds that ICANN had in fact considered the IRP panel’s recommendations:

Namecheap provides evidence that ICANN in fact did consider the Panel’s recommendations, and thus Plaintiff admits that ICANN did not reject any of the Panel’s findings, so as correctly stated by ICANN, “there is nothing for this Court to enforce.”

In the six years since the price caps were lifted, non-profit PIR has not raised .org prices, while for-profit Identity Digital has raised .info prices every year, from $10.84 in 2019 to $19 today.

Registrar shamed for alleged crypto abuse neglect

ICANN has given a warning to Malaysian registrar WebNic, claiming that it has turned a blind eye to abuse reports in breach of new Registrar Accreditation Agreement rules.

ICANN Compliance says the company, a subsidiary of Kuala Lumpur-based Qinetics, failed to take action to resolve abuse reports made against several domains it manages.

Online reports and databases suggest the names in question were used in phishing attacks attempting to steal cryptocurrency wallet credentials.

Compliance said it “has observed a concerning pattern regarding DNS Abuse mitigation”, saying WebNic continually drags its feet on responding to abuse reports, often only taking action after ICANN gets involved.

The breach notice adds:

The Registrar frequently issued repeated requests for evidence to abuse reporters – even when the original reports appeared actionable – and failed to fully consider information or clarifications provided by the abuse reporter, ICANN or otherwise reasonably accessible to the Registrar. In other cases, the Registrar requested evidence from the abuse reporters that did not appear to be relevant to the reported activity, causing additional delays.

WebNic is not a young, fly-by-night registrar. It’s been around a quarter century and has over 800,000 domains under management just in the gTLDs. Its parent also offers registry back-end services.

The company has until August 19 to make Compliance happy or risk termination proceedings.

Registrars agree to higher ICANN fees

Domain registrars have agreed to pay more in ICANN fees, after a supermajority vote.

ICANN said today that registrars representing over two thirds of fees voted in favor of the increases, part of a package which Org reckons will add $4.6 million to its annual budget at first.

The package of increases also comes with an increase of the per-transaction fee, typically added by registrars at the checkout and sometimes called the “ICANN tax”, from $0.18 per domain to $0.20.

But the vote related to the variable fees, which will now go up from $3.42 million to $3.8 million per year. That sum is split equally between registrar accreditations, with a deep two-thirds discount for registrars with under 350,000 domains.

The fixed annual $4,000 per-accreditation fee is not changing.

The increases were proposed last October, along with registry fee increases, to plug budget shortfalls caused by macroeconomic factors such as inflation, lumpy registration patterns, and the post-Covid slump in registered names.

These are the first price increases ICANN has implemented in well over a decade.

Big .gdn registrar at risk

A registrar that exclusively sells .gdn domain names seems to have gone AWOL, and ICANN Compliance is on its case.

Dubai-based Intracom Middle East has been slapped with a breach notice alleging failures to operate a compliant RDAP server, publish the names of its officers, pay its ICANN fees, and escrow its registrant data.

Some of these breaches seem to be due to the fact that the company’s web site is missing in action, today returning NXDOMAIN errors, and has quite possibly been repeatedly hacked.

Archived versions of its site from last year show it was at various times a Polish risotto recipes splog, an Indian burger joint, and a manga cosplay porn site.

It’s Intracom’s second brush with Compliance. Three years ago the case was escalated to a three-month accreditation suspension for pretty much the same infractions.

Unlike most recent Compliance actions, which have been against registrars with essentially no domains under management, this times some domains are actually at risk — over 10,000 of them in fact.

Intracom specializes/d in selling .gdn domains for under a buck apiece. Apart from a few dozen registrations in a few other gTLDs, all of its 10,000 domains were in .gdn. It was once .gdn’s biggest registrar, though that’s no longer the case.

The company has been given to the end of the month to comply or risk termination.

Gname adds another 200 registrars

Singaporean drop-catching registrar Gname has added another 200 shell registrars to its collection, bringing its total to over 500.

The 200 companies are named Gname 301 Inc through Gname 500 Inc. More accreditations means more connections to gTLD registries and a better chance to catch expired domains when they are deleted.

Gname last boosted its portfolio of shells in December 2023, when it doubled its number from 150 to 300.

The latest accreditations will have cost $700,000 in up-front application fees and will add an extra $800,000 to Gname’s costs due to ICANN’s $4,000 flat annual accreditation fee.

This of course has a positive effect on ICANN’s finances. Its fiscal 2025 budget predicted 40 new registrars, and even its high estimate was only for an increase of 57.

It had only accredited 24 new registrars in this fiscal year before Gname’s move.

An extra $1.2 million it wasn’t expecting is almost enough to cover its community volunteers’ hotels bill for a whole year.

Gname’s main accreditation had almost five million domains under management, making it the ninth-largest accreditation of the now over 3,000 on ICANN’s books.

Web.com getting dumped

Registrar group Newfold Digital is killing off the Web.com brand after 18 years as part of its strategy to consolidate its diverse array of brands.

Customers will soon by migrated to the larger and older Network Solutions registrar, but the company said that they should not notice much difference.

“We’re committed to making the transition to Network Solutions seamless and convenient. That means no downtime or interruptions to your existing services. Simply put, you won’t have to do anything,” Web.com said.

Pricing, features, and user credentials will not change, it said.

Web.com had about 818,000 gTLD domains under management at the end of 2024, down from its peak of over 2 million during the early days of the Covid-19 pandemic, but was growing every month last year.

Network Solutions, which was the gTLD monopoly registrar until ICANN came along to introduce competition a quarter century ago, had gTLD DUM of over 5 million at the last count.

Web.com was actually the acquiring party in the original merger, paying over $561 million in cash and stock for NetSol back in 2011.

There’s no word on when or if other ancient Nefold brands, such as Register.com, will be similarly retired.

The retirement raises the intriguing possibility of the web.com domain hitting the market at some point in the (far) future.

Sales and profits dip at Team Internet

Having been one of the industry’s notable growth stories over the last decade, Team Internet saw its revenue and profit go down in 2024, according to its latest earnings report.

The company is also predicting a miserable 2025 as it tries to work around Google’s decision to turn off advertising on parked domains by default for its customers, a key source of Team Internet’s revenue.

Revenue was down 4.1% to $802.8 million, the company said, and adjusted EBITDA was down 4.7% to $91.9 million.

The domains part of its business seemed to fare better than its search unit, recording revenue up 7.4% at $202.7 million. But this division also includes some non-domains software businesses, so we can’t really break its performance out any more granularly.

Team Internet said the current analyst consensus for adjusted EBITDA this year is between $60 million and $62 million, a huge drop on 2024, with double-digit growth returning next year.

CEO Michael Riedl said in a statement: “The Search segment’s difficult reset in 2025 in response to recent market developments is the acceleration of a long-anticipated pivot, not, the board believes, a permanent setback.”

He also seemed to confirm that the company will rely on AI-generated content to populate its domains, enabling it to use Google’s contextual advertising.

Four deadbeat registrars get terminated

ICANN has terminated the contracts of four registrars that haven’t paid their accreditation fees in years.

US-based Zoo Hosting, UK-based Nerd Origins, and China-based Mixun and Mixun Network Technology have all been canned, following public breach notices in January.

Judging by the termination notices, the registrars all stopped paying their quarterly fees between 2022 and early 2024. None of them had implemented recent ICANN policies such as RDAP adoption, the notices added.

It’s not a huge problem, as none of the four companies had ever sold a single gTLD domain name, so there are no customers to be affected.