Is auDA’s new marketing windfall working?

Australian ccTLD .au appears to be growing at a faster rate after registry auDA cut its wholesale prices and devoted millions of dollars to marketing.
While the numbers are by no means conclusive, in the three months after the new business model came into effect .au grew almost twice as much as in the comparable year-ago period.
At the end of June, auDA switch its back-end registry from Neustar to Afilias.
It cut its wholesale price by 10% and said it would invest AUD 8 million ($5.7 million) over four years into a marketing and innovation fund.
The fund offers financial incentives to registrars and resellers that promote .au domains.
Growing .au’s market share is one of the defined objectives of the program, and stats collected by DI show it might be working.
In the three months between June 28 (two days before the transition to Afilias) and September 28, the number of reported .au domains went up from 3,153,432 to 3,163,998, an increase of 10,566 domains.
In the immediately prior three months, registered domains actually declined by 1,150.
In the same period June-September period of 2017, domains were up by 5,734, about half the level of this year.
So is the new regime succeeding in growing numbers more rapidly? Maybe. It’s probably too early to tell for sure.
Any increase in DUM could be offset by declines from domain investors, if a proposed policy change about who is allowed to register domains comes into effect.
The numbers above have two caveats: 1) they’re based on the running total published more or less live on auDA’s web site, so should be considered ball-park as they may have been collected at different times during the day, and 2) it’s possible that Afilias and Neustar report numbers from their back-ends differently, which might mean comparisons of numbers reported before and after the transition are unfair.

Brazil dancing around four million reg milestone

The Brazilian ccTLD, .br, last week topped four million registrations for the first time, then promptly dropped back below the milestone.
The TLD was at 4,000,260 domains on Monday September 24, prompting a press release from Nic.br, dropping back below four mill the next day, then hit 4,002,574 this Monday.
The TLD stands at 3,996,604 today, according to statistics Nic.br publishes on its web site.
It’s taken about six years to grow from three million names. The leap from two million to three million took about two and a half years.
Brazil operates on a three-level structure, with dozens of second-level domain options available to registrants.
The large majority of registered names — 3,645,073 — are in the .com.br space.

MMX waving goodbye to .london? Boss puts focus on renewal profits, China

MMX’s revenue from domain renewals could cover all of its expenses within the next 24 months, if everything goes to plan, according to CEO Toby Hall.
Hall was speaking to DI this evening after the company reported its first-half financial results, which saw revenue up 22% to $6.4 million and a net loss of $14.7 million, which compared to a loss of $526,000 a year earlier.
MMX’s huge loss for the period was largely — to the tune of $11.8 million — attributable to the restructuring of an “onerous” contract with one of its gTLD partners.
Hall refuses point blank to name that partner, but for reasons I discussed last year, I believe it is .london sponsor London & Partners, which is affiliated with the office of the Mayor of London.
When L&P selected MMX to be its registry partner for .london back in 2012, I understand a key reason was MMX’s promise to pay L&P a fixed annual fee and commit to a certain amount of marketing spend.
But two years ago, after it became clear that .london sales were coming in waaaay below previous management’s expectations, MMX renegotiated the deal.
Under the new deal, instead of committing to spend $10.8 million on marketing the TLD itself, MMX agreed to give half that amount to L&P for L&P to do its own marketing.
It appears that L&P has already spunked much of that cash ineffectively, or, as MMX put it:

a significant portion of that marketing budget has been spent by the partner with minimal impact on revenues in the current year and no expectation of any material uplift in future periods

MMX seems to have basically written off the .london deal as a bad call, and now that MMX is no longer in the registry back-end or registrar businesses, it seems unlikely that the .london partnership will be extended when it expires in three years.
Again, Hall would not confirm this bad contract was for .london — I’m making an informed guess — but the alternatives are limited. The only other TLDs MMX runs in partnership currently are .review and .country, and not even 2012 MMX management would have bet the farm on those turkeys.
Another $2.1 million of the company’s H1 net loss is for “bad debt provisions” relating the possibility that certain US-based registrar partners may not pay their dues, but this provision is apparently related to a new accounting standard rather than known deadbeats threatening to withhold payments.
If you throw aside all of this accountancy and look at the “operating EBITDA” line, profit was up 176% to $661,000 compared to H1 2017.
While the loss may have cast a cloud over the first half, Hall is upbeat about MMX’s prospects, and it’s all about the renewals.
“Renewal revenue will be more than all the costs of business within 24 months,” he said. To get there, it needs to cross the $12 million mark.
He told DI tonight that “an increasing percentage of our business is based on renewals… just on renewal revenue alone we’ll be over $10 million this year”.
Renewal revenue was $4.7 million in 2017 and $2.4 million in 2016, he said. In the first half, it was was up 40% to $3.4 million.
MMX’s acquisition of porn domain specialist ICM Registry, which has renewal fees of over $60 per year, will certainly help the company towards its 2018 goal in the second half. ICM only contributed two weeks of revenue — $250,000 — in H1.
Remarkably, and somewhat counter-intuitively, the company is also seeing renewal strength in China.
Its .vip gTLD, which sells almost exclusively in China, saw extremely respectable renewals of 76% in the first half, which runs against the conventional wisdom that China is a volatile market
Hall said that .vip renewals run in the $5 to $10 range, so apparently TLD volume is not being propped up by cheap wholesale renewal fees. The TLD accounts for about 30% of MMX’s renewal revenue, Hall said.
About 60% of .vip’s domains under management are with Chinese registrar Alibaba. The biggest non-Chinese registrar is GoDaddy, with about 3% of the namespace.
More exposure to China, and specifically Alibaba, is expected to come soon due to MMX’s repurposing of the 2012-logic gTLD .luxe, which is being integrated into the Ethereum blockchain.
MMX said last week that some six million (mostly Chinese) users of the imToken Ethereum wallet will in November get the ability to register .luxe domains via imToken and easily integrate them with their Ethereum assets.
The announcement was made at the Alibaba Cloud Computing Conference in China last week, so you can probably guess imToken’s registrar of choice.

Afilias gets Guinness record for .au migration

Afilias has got its recent takeover of .au recognized by Guinness as an official world record.
The company was given the title of “Largest Migration of an Internet Top-Level Domain in a Single Transition” at an event in New York today, according to a company press release.
It relates to its migration of .au from former registry provider Neustar to its own back-end a few months ago.
Australia’s .au ccTLD had about 3.1 million names under management at the time, about 400,000 names more than the previous record — the 2003 .org transition Afilias also handled.
I understand there’s a licensing fee due to Guinness for this kind of (let’s face it) shameless-but-effective PR stunt, but no guarantee the record will actually be printed in future editions of the annual Guinness Book of World Records.
I hope the fresh salt in Neustar’s wounds isn’t stinging too badly this evening.

US scraps fucking stupid “seven dirty words” ban

Neustar and the US government have agreed to dump their longstanding ban on profanity in .us domains.
A contract change quietly published in July has now made it possible to register .us domains containing the strings “fuck”, “cunt”, “shit”, “piss”, “cocksucker”, “motherfucker” and “tits”.
These are the so-called “seven dirty words” popularized by a George Carlin comedy routine and incorporated into US censorship law via the Supreme Court decision Federal Communications Commission v Pacifica Foundation in 1978.
Neustar banned the strings from .us when it originally won the registry contract from the National Telecommunications and Information Administration in 2002, and kept it upon renewal.
Until recently, it was conducting post-registration reviews of new .us domains and suspending names that used the strings in sweary contexts.
However, a July contract amendment (pdf) has released Neustar from this duty, allowing registrants to register whatever the fuck they want.
According to the Electronic Frontier Foundation, the change came about after itself and the Cyberlaw Clinic at Harvard Law School complained to the government about the suspension of the domain fucknazis.us, which registrant Jeremy Rubin had been using to raise money to fight the extreme right in the US.
That domain was registered in late 2017, but Neustar appears to have been discussing whether to repeal the idiotic ban in various policy groups for at least three years.
When Network Solutions was the sole registrar for .com, .org and .net it too banned the seven dirty words but this practice fizzled out after ICANN introduced competition into the registrar space almost two decades ago.

Beginning of the end for DomainTools? Court orders it to scrub Whois records

DomainTools has been temporarily banned from collecting and publishing the Whois records of all .nz domains.
A Washington court yesterday handed down a preliminary injunction against the company, after New Zealand’s Domain Name Commission sued it in July for scraping and republishing its Whois in violation of its terms of service.
Notably — especially if you’re involved in the ongoing Whois reform debate — Judge Robert Lasnik’s scathing order (pdf) rubbished DomainTools’ claims that its historical Whois service provides a public interest benefit that outweighs the privacy interests of .nz registrants.
The ruling by its own admission also potentially opens the floodgates for other registries and registrars to obtain injunctions against DomainTools for the own customers.
DomainTools has been “enjoined from accessing the .nz register while DomainTools’ limited license remains revoked and/or publishing any .nz register data DomainTools had stored or compiled in its own databases”.
DNC, the policy body that oversees .nz registry InternetNZ, had alleged that DomainTools had created a “secondary or shadow register” by bulk-downloading Whois records.
Since mid-2016, each .nz Whois record has contained a notice that such behavior is prohibited, and Lasnik agreed that DomainTools must surely have been aware of this.
Lasnik further agreed with DNC that DomainTools’ service is “sabotaging” its efforts to bring more privacy protection to .nz customers; since November last year it has offered individuals the ability to opt out of having their private data published, an offer 23,000 people have taken up.
That was enough for the judge to conclude that DNC’s case had met the “irreparable harm” test required for an injunction.
He was less impressed with DomainTools’ argument that implementing the injunction would take many months and cost it up to $3.5 million.
“Defendant can presumably filter the .nz data using relatively simple database tools,” he wrote, ordering DNC to post a “nominal” $1,000 bond to cover DT’s potential losses.
Lasnik also said the public interest would be better served by permitting registrant privacy than by serving the interests of DomainTools’ cybsecurity and law enforcement customers:

defendant argues that the products it creates from its meticulously collected register data are critical cybersecurity resources and that the public interest would be harmed if the reports provided to government, financial, and law enforcement entities were incomplete because the .nz data were excised. The .nz register is comparatively small, however (approximately 710,000 domains compared with over 135,000,000 .com domains), and the defendant and its customers can access the registration information directly through plaintiff’s website if it appears that a bad actor is using an .nz domain. On the other hand, the .nz registrants’ privacy and security interests are compromised as long as defendant is publishing non-current or historical .nz information out of its database. The Court finds that the public has an interest in the issuance of an injunction.

While arguably limited to historical Whois records, it’s a rare example of judicial commentary on the privacy rights of registrants and may well play into the ongoing debate about Whois in the post-GDPR world.
Even if it turns out not to have wider policy implications, the legal implications for DomainTools are potentially devastating.
While .nz has only about 710,000 domains under management, and is but one of over 1,500 TLDs, DomainTools, DNC and Judge Lasnik all seem to agree that the floodgates for further litigation may have now opened. Lasnik wrote:

defendant argues that a preliminary injunction in this case could start an avalanche of litigation as other registers attempt to protect the privacy of their registrants. If defendant built a business by downloading, storing, and using data from other registers in violation of the terms that governed its access to that data, defendant may be correct — other registers may be encouraged to pursue a breach of contract claim if plaintiff is successful here. It would be ironic, however, if a plaintiff who has shown a likelihood of success and irreparable injury were deprived of preliminary relief simply because defendant may have acted wrongfully toward others as well

DNC said in a statement: “Managers of other countries domain name systems across the world will want to pay attention to the judgment. This may raise confidence to fight their own cases should DomainTools be breaching their terms of use.”
The case has yet to go to court, but the fact that DNC won the injunction indicates that the judge believes it has a likelihood of winning.

PIR chief: registries should stop stressing about volume

Public Interest Registry has announced some sweeping changes to how it markets .org and its other TLDs, with interim CEO Jay Daley telling DI that there’s too much focus on volumes in the industry today.
PIR is scrapping is volume discount programs after the current batch of incentives expires at the end of the year.
These are the programs that offer rebates to registrars if they hit certain performance targets, all based around newly created domains.
“They particularly favor large registrars, and we don’t think that’s appropriate going forward,” Daley told DI yesterday.
He said that when PIR removed some developed markets from its geographically-targeted discount programs, it saw creates go down but revenue improve.
He suggested that some registries have too much focus on volumes as a benchmark of success, failing to take account of important factors such as renews and abuse rates.
Part of the problem is that success is often measured (by folk including yours truly) by domains under management, rather than TLD health or revenue-per-domain.
“How many people are simply trying to get their numbers up without worrying about the underlying revenue, or taking a very low underlying revenue in order to get their numbers up?” Daley said.
“We’re not in any way somebody who is trying to get our numbers up at all costs, certainly not,” he said.
Another marketing program getting a makeover is pay-per-placement, where PIR would pay for prominent positions in the TLD drop-down menu of registrars storefronts.
These relationships have been based purely on new creates, Daley said, with appropriate “clawback” provisions when registrations turn out to be predominantly abusive.
In future, PIR intends to take a “longer-term, hygiene oriented view” of how its marketing money is used, making better use of data, he said.
“We need to be looking more at the quality of the registrations we get, the level of technical abuse generated by those registrations, looking at the renewal rates that come from those registrations,” he said.
PIR has a new four-strong channel services team that will be leading these changes.
“We are a public interest organization and need to take a public interest view on everything we do,” Daley said. “We need to be looking at our promotions for more than just commercial reasons, we need to be looking at public interest reasons as well.”
Daley, who ran New Zealand’s .nz registry from 2009 until this January, said that the big changes he is overseeing do not reflect an attempt to put his stamp on PIR and take over the CEO office on a permanent basis.
He does not want to run a registry and does not want to relocate to PIR’s headquarters in Virginia, he said.
“I’ve been a registry CEO for nine years,” he said. “I’ve done this and it’s time for me to look at other things.”
He also sits on PIR’s board of directors.

.CLUB sees spam double after China promotion

.CLUB Domains has seen the amount of spam in .club double a month after seeing a huge registration spike prompted by a deep discount deal.
The registry saw its domains under management go up by about 200,000 names over a few days in early August, largely as a result of a promotion at Chinese registrar AliBaba.
AliBaba sold .club domains for CNY 3 ($0.44) during the promotion, helping it overtake GoDaddy as the top .club registrar.
At that time, spam tracker SpamHaus was reporting that 17.9% of the .club domains it was seeing in the wild were being used in spam.
Today, that number is 35.4%, almost double the August 7 level. SpamHaus does not publish the actual number of spammy domains for .club; that honor is only bestowed upon the top 10 “bad” TLDs.
Correlation does not equal causation, of course. There could be factors other than the AliBaba promotion that contributed to the increase, but I believe there’s probably a link here.
.CLUB chief marketing officer Jeff Sass told DI:

When registrars have domains “on sale”, there is always the chance that low-cost domains will be attractive to abusers. We monitor abuse proactively, and respond promptly to complaints, as well as monitor our registrar partners collectively and individually.

It’s almost certainly unfair of me to single out fluctuations in .club here, rather than take a comparative look at multiple TLDs. There are certainly many worse TLDs per SpamHaus’ statistics — .men leads among the gTLDs, with 87.2% spam.
But, given the industry truism that cheaper domains leads to more abuse, I think such a large increase correlating with such a successful promotion is a useful data point.

Donuts gets bought by former ICANN CEO’s firm

Donuts is to be bought by a private equity firm that has a former ICANN CEO as a partner.
The company, which holds the largest portfolio of new gTLDs, has agreed to be acquired by Boston-based private equity firm Abry Partners for an undisclosed sum.
Not much info about the deal has been released, but one senses an ICANN alum’s hand at the wheel.
Former ICANN chief Fadi Chehade is a partner at Abry, having been initially employed as senior advisor on digital strategy back in 2016 after he left ICANN.
Abry, on its web site, says it focuses its investments on profitable companies, adding:

Depending on the type of fund, we target investments from $20 million to $200 million.
Since Abry’s inception, we’ve developed deep industry expertise in Broadband, Business Services, Communications, Cybersecurity, Healthcare IT, Information Services, Insurance Services, Internet-of-Things, Logistics, Media, and Software as a Service.

Since its formation in 1989, Abry has “completed more than $77 billion of transactions, representing investments in more than 650 properties.”
Donuts was founded by domain veterans Paul Stahura, Jon Nevett, Richard Tindal and Daniel Schindler in order to take advantage of ICANN’s new gTLD program..
It was initially funded by $100 million from Austin Ventures, Adams Street Partners, Emergence Capital Partners, TL Ventures, Generation Partners and Stahurricane.
It currently runs over 200 TLDs, the most populous of which I believe is .ltd, with over 400,000 names.
Donuts is the latest of a series of domain companies to exit via the private equity route, notably following Neustar and Web.com.
Chehade was ICANN’s CEO between 2012 and 2015. While he was not involved in the industry during the new gTLD’s program’s inception, he did oversee its early years.

Afilias finally admits it’s American

Afilias has changed its corporate structure and is now officially based in the United States.
A new holding company, Afilias Inc, has been created in Delaware. It now owns Afilias Plc, the Ireland-based company that has been until now the parent of the Afilias family.
Being “based” in Ireland and doing business primarily in the US was always partly a tax thing, and the company admitted in a press release yesterday that “recent favorable US tax changes” are one of the reasons it’s relocating to the States.
Trump’s tax changes last year reportedly saw corporation tax reduced from 35% to 21%, a steep cut but still a heck of a lot higher than Ireland’s aggressively business-friendly regime.
Other reasons for shift, CEO Hal Lubsen said in a press release, are: “More of the company’s shares are now owned by Americans, and our executive group is increasingly becoming American.”
The company also noted that its biggest partners — Public Interest Registry and GoDaddy — are American.
Afilias’s global HQ is now its office in Horsham, Pennsylvania. It also has offices in Canada, Australia, India and China.
The company told registrars that it does not expect the restructuring to have any impact on its operations.