No .sex please, we’re infected!

MMX saw poorer-than-expected sales of porn-related defensive registrations in the first half of the year, the only blip in what was otherwise a strong period for the company.

The registry updated the market today to say that its domain name base grew by 31% year over year during the half, ending June with 2.38 million names under management. It only grew by 19% in the same period last year.

Billings for H1 were up 7% at $7.9 million, MMX said.

But because the mix shifted away from one-off brokered sales, which are registered on the earnings report as a lump sum, and towards regular automated registrations, which are recognized over the lifetime of the reg, MMX expects to report revenue 5% down on last year.

While that’s all fair enough, the company said that it didn’t sell as many defensive blocks in .xxx, .sex, .porn and .adult as it had expected, which it blamed on coronavirus:

Management also notes that expected H1 channel sales from the Company’s brand protection activity were held back due to the impact of COVID-19, but anticipates those brand protection initiatives that were delayed in Q2 will resume in H2.

It’s a reference to the AdultBlock and AdultBlock Plus services launched last year, which enable trademark owners to block (and not use) their marks in all four adult TLDs for about $350 to $800 a year.

Drop auctions not a slam-dunk, says Nominet

Nominet has responded to criticism of its plans to introduce registry-level .uk drop auctions by saying it’s not about money-grabbing and is not guaranteed to even happen.

Registry MD Eleanor Bradley today blogged:

In some quarters the commentary suggests the driver for change is financial, or to make life more difficult for some business models. It is not.

…

As commercial gain was not our objective, we have suggested that any additional funds raised by changing the policy would be directed towards public benefit activity or used to provide specific services to registrars. Indeed, how to best spend additional funds that result from any policy change is part of the consultation.

The consultation referred to here was launched earlier this month. It suggests replacing the current drop-catching system, in which Nominet suspects some members “collude” to pool their EPP connections, with one of two new processes.

One would be a straightforward auction of desirable dropping names. The other would be to charge drop-catchers up to £6,000 a year for extra concurrent registry connections.

Bradley wrote that “the assumption in some quarters that an auction approach is our preferred option — a fait accompli –- are wide of the mark”.

As I’m one of the people who reported that auctions were Nominet’s “apparently preferred” option, I’ll note that my take was based on the company’s own consultation document, which scores auctions more highly than the alternative on a five-point scale of its own devising.

And a preferred option is not the same as a fait accompli, of course.

The consultation is open for a couple more weeks. A group of disgruntled members plan to petition the board to retain the status quo at its AGM in September.

After Chapter 11 filing, JCPenney dumps its dot-brand

American retailer JCPenney has told ICANN it no longer wishes to own its dot-brand gTLD, .jcp.

The notice was filed just a month after the company entered Chapter 11 bankruptcy protection and announced the permanent closure of hundreds of stores.

Like many retailers of non-essential goods, the company’s fortunes have been badly affected by the coronavirus pandemic.

I suspect the gTLD would have been scrapped eventually regardless — JCPenney never used it, and even the obligatory nic.jcp site merely redirects to the company’s primary .com.

It’s the 80th dot-brand to be dumped by its registry. the 11th this year.

Nominet members revolt over “deepest pockets wins” auction plans

A group of Nominet members and registrars have launched a petition to prevent Nominet from introducing registry-level auctions for dropping .uk domain names.

The petition, organized by Netistrar, reads: “We the undersigned members request that Nominet maintains equal registrar access to expired domain names on a first come first served basis.”

Nominet recently launched a policy consultation that lays out plans to essentially kill off the existing system of drop-catching expired domains and replace it with either registry auctions or a pay-to-play model asking fees of up to £6,000 a year.

The petition says that “these proposals technically and financially restrict a registrars ability to access expired domains”, noting that other ccTLDs “manage an expiry process without an expensive and centralized auction system.”

So far, 70 registrars and individuals (out of the about 3,000 Nominet members) have signed the petition, but they account for more than 400,000 .uk domains.

The petition will be presented at Nominet’s annual general meeting in September. The current policy consultation ends August 14.

The $135 million battle for .web could be won in weeks

Afilias is to get its day in “court” to decide the fate of the .web gTLD just 10 days from now.

The registry is due to face off with ICANN before an Independent Review Process panel in a series of virtual hearings beginning August 3.

The IRP complaint was filed late 2018 as the endgame of Afilias’ attempt to have the results of the July 2016 .web auction overturned.

You’ll recall that Verisign secretly bankrolled the winning bidder, a new gTLD investment vehicle called Nu Dot Co, to the tune of $135 million, causing rival bidders to cry foul.

If that win was vacated, Afilias could take control of .web with its second-place bid.

Afilias claims that ICANN broke its own rules by refusing to thoroughly analyze whether NDC had a secret sugar daddy, something DI first reported on two weeks before the auction.

It has put forward the entirely plausible argument that Verisign splashed out what amounts to about a month’s .com revenue on .web in order to bury it and fortify its .com mindshare monopoly against what could be its most formidable competitor.

In the IRP case to date, ICANN has been acting as transparently as you’d expect when its legal team is involved.

It first redacted all the juiciest details from the Verisign-NDC “Domain Acquisition Agreement” and the presumably damaging testimony of one of its own directors, and more recently has been fighting Afilias’ demands for document discovery.

In March, the IRP panel ruled against ICANN’s protests on almost every count, ordering the org to hand over a mountain of documentation detailing its communications with Verisign and NDC and its internal deliberations around the time of the auction.

But the ace up ICANN’s sleeve may be an allegation made by Verisign that Afilias itself is the one that broke the auction’s rules.

Verisign has produced evidence that an Afilias exec contacted his NDC counterpart five days before the auction, breaking a “blackout period” rule so serious that violators could lose their applications.

While Afilias denies the allegation, the IRP panel ruled in March that Afilias must hand over copies of all communications between itself and rival bidders over the auction period.

We’re not likely to see any of this stuff until the panel issues its final declaration, of course.

In the past, IRP panels have taken as long as six or seven months after the final hearing to deliver their verdicts, but the most-recently decided case, Amazon v ICANN, was decided in just eight or nine weeks.

.com renewals lowest in years, but Verisign sees lockdown bump anyway

.com and .net saw decent growth in the lockdown-dominated second quarter, despite Verisign reporting the lowest renewal rate since 2017.

The company last night reported that it sold more new domains in Q2 than it did in the same period last year — 11.1 million versus 10.3 million a year ago.

It added a net 1.41 million names across both TLDs in the quarter, compared to growth of 1.34 in Q2 2019.

CEO Jim Bidzos did not directly credit coronavirus for the bump, but he told analysts that the growth was driven primarily by small businesses in North America getting online. The US went into lockdown in the last week of March.

Verisign has now upped its guidance for the year. It now expects growth in domains of between 2.75% and 4%. That’s higher than the guidance it was giving out at the start of the year, pre-coronavirus.

The company had lowered this guidance to between 2% and 3.75% in April due to coronavirus uncertainties, which with hindsight clearly seems overly cautious.

On the flipside, Verisign’s estimated renewal rate for the quarter was down to only 72.8%, down from 74.2% a year ago, the worst it’s been since Q1 2017, when renewals were suffering through the tail-end of a massive Chinese junk drop.

But Bidzos said that the low rate was “primarily related to the lower overall first-time renewal rate”, suggesting that it might be more due to registrar promotions or heightened speculation a year ago than any coronavirus-related drag factor.

For Q2, Verisign reported revenue up 2.6% year over year at $314 million, with net income up from $148 million to $152 million.

The company also announced yesterday that it is freezing its prices across all of its TLDs until March 31, 2021.

You’ll recall that it gets the right to increase prices 7% starting on October 26 this year, under its new deal with ICANN and the US government, and Verisign confirmed yesterday that there will definitely be a price increase next year.

Because there’s a six-month notice period requirement in the contract, news of the timing of this increase could come as soon as September this year.

Google’s .new now generally available

After many months of pre-launch registration periods, Google has taken its .new gTLD to general availability today.

Names in .new are not cheap, have strict usage restrictions, and are not available at most of the larger registrars.

You may recall that Google is doing something quite innovative with the gTLD — each .new domain must resolve to a page in which the visitor can immediately (or after logging in) create something new, such as a blog, image, spreadsheet, presentation, webcast and so on.

Over 500 domains have been claimed during sunrise and limited registration periods so far, and dozens are live and functioning according to spec already.

I’ve seen prices ranging from about $450 at Gandi to $550 at 101domain. Google Domains prices names at about $540.

Due to the high registry pricing and restrictions, many registrars do not seem to be carrying the TLD. But GA started just a few minutes ago at time of posting so it’s possible more might come online shortly.

$11 billion dot-brand blames coronavirus as it self-euthanizes

Another new gTLD you’ve never heard of and don’t care about has asked ICANN to terminate its registry contract, but it has a rather peculiar reason for doing so.

The registry is Shriram Capital, the financial services arm of a very rich Indian conglomerate, and the gTLD is .shriram.

In its termination notice, Shriram said: “Due to unprecedented Covid-19 effect on the business, we have no other option but to terminate the registry agreement with effect from 3lst March 2020.”

Weird because the letter was sent in May, and weird because Shriram Group reportedly had revenue of $11 billion in 2017. The carrying cost of a dot-brand isn’t that much.

Registries don’t actually need an excuse to terminate their contracts, so the spin from Shriram is a bit of a mystery.

Shriram had actually been using .shriram, with a handful of domains either redirecting to .com sites or actually hosting sites of their own.

It’s the 79th dot-brand to self-terminate. ICANN expects to lose 62 in the fiscal year that started three weeks ago.

Brazil to launch domains for detectives, librarians and geologists

Bucking the worldwide trend for major ccTLDs to simplify their namespaces, Brazil is poised to launch another dozen new third-level domain options.

NIC.br said last week that it will launch five open spaces and seven more dedicated to specific professions.

The open zones include .app.br and .dev.br, aping two fairly successful Google-owned gTLDs, as well as log.br (for “logistics”), .seg.br (for “security”) and .tec.br (for “technology”).

The profession-specific ones are .bib.br for librarians, .des.br for designers, .det.br for detectives, .enf.br for nurses, .coz.br for chefs, .geo.br for geologists and .rep.br for sales reps.

.br is already probably the most taxonomical of all the ccTLDs, with an eye-watering 130 3LD options, including over 40 profession-specific spaces, available.

Prices for .br domains are BRL 40 ($7.45) a year. The 12 new options become available July 20.

Nominet wants to kill off the .uk drop-catching market

Nominet has revealed a sweeping set of policy proposals that would totally revamp how expired domains are deleted and could essentially kill off drop-catching in the .uk domains market.

The company is thinking about auctioning off expired domains at the registry level, or charging drop-catchers up to £6,000 ($7,500) a year to carry on more or less as normal.

Currently, expired .uk domains are deleted at an undisclosed time each day, leading drop-catch registrars to spam the registry back-end with availability checks on the best names.

Upon finding a desired domain has dropped, they then attempt to register it immediately by spamming EPP create commands.

About 0.7% of the domains deleted each year, about 12,000 of the 1.76 million names dropped in 2018, are re-registered within a second of release, Nominet says.

The system as it stands bothers the registry due to the technical load it creates and the fact that it means the most desirable names are snapped up by small number of domainers for resale.

It also does not like the fact the current system encourages collusion between Nominet members and the creation of dummy memberships by drop-catchers.

So it’s proposing two main options for rejiggering the economics.

The first and apparently preferred solution would be for Nominet to auction off the names, rather than deleting them. It would look a lot like auctions often seen in newly launching TLDs.

The second option is to charge drop-catchers extra fees for a greater number of simultaneous EPP connections.

Currently, each registrar gets six. Under the proposal, called “Economically controlled access to expiring domains”, they’d be able to buy additional batches of six for £600 a pop, up to a maximum of 10 batches or £6,000.

Regardless of which option is chosen, Nominet also wants to make drop times more predictable, by publishing a daily drop-list available to all.

Nominet knows there’s a pretty good chance it’s going to be accused of profiteering, and says in the paper:

If either of the options proposed are implemented, we envisage that any profits derived from the auction or economically controlled access models will be directed towards public benefit activity and/or ringfenced to provide specific services to registrars e.g. a training fund. However, we are also seeking ideas on how any profits would be best spent to benefit the .UK namespace in this consultation.

The consultation can be found here. Interested parties have until August 14 to submit comments.