Tucows says eNom may be shrinking as Melbourne IT drives 2016 growth

Tucows yesterday reported an 11% increase in revenue for 2016, driven partly by an acquisition, but warned that its more recent acquisition, eNom, may be shrinking.
The company reported revenue for 2016 of $189.8 million, up from $171 million in 2015. Net income was up 41% at $16 million.
For the fourth quarter, revenue was up 9% year-on-year at $48.8 million. Net income was down 9% at $2.8 million.
In a conference call, executives linked some of the growth to the April 2016 acquisition of Melbourne IT’s reseller business, which added 1.6 million domains to Tucows’ DUM.
While Tucows also operates its Ting mobile phone service, the majority of its revenue still comes from domains and related services.
In the fourth quarter, revenue was $30 million for this segment. Of that, $23.1 million came from domains sold via its wholesale network and $3.8 million came from Hover, its retail channel.
CEO Elliot Noss noted that the acquisition of the eNom wholesale registrar business from Rightside last month made Tucows easily the second-largest registrar after GoDaddy, but made eNom sound like a neglected business.
“The eNom business is a flat, potentially even slightly negative-growth business in terms of gross margin dollars,” he told analysts.
eNom’s channel skews more towards European and North American web hosting companies, which are a growth challenge, he said. He added:

We acquired a mature retail business and associated customers which for the past few years has been more about maintaining and servicing eNom’s existing customers as opposed to growth. It has not been actively promoted and as a result has a flat to declining trajectory. It’s something we don’t intend to change in the short-term, but as we look under the hood and get a better sense of the platform as we will with all of the operations, the long-term plan might be different.

The acquisition was “overwhelmingly about generating scale and realizing cost efficiencies”, Noss said.
Tucows paid $83.5 million for eNom, which has about $155 million in annual revenue and is expected to generate about $20 million in EBITDA per year after efficiencies are realized.

Comment Tagged: acquisition, earnings, enom, hover, melbourne it, rightside, tucows

Donuts sticks with Rightside despite Google support

Donuts has renewed its back-end registry services contract with Rightside, Rightside has announced.
That’s despite indications a few months ago that it might have been preparing for a switch to Google’s new Nomulus platform.
Rightside said yesterday that the deal, which has seen Rightside handle the registry for Donuts’ portfolio of almost 200 gTLDs for the last five years, has been extended.
It’s a “multi-year” deal, but the length of the extension has not been revealed.
Donuts had suggested last October that it might be ready to move to Nomulus instead.
The company revealed then that it had been quietly working with Google for 20 months on the software, which uses Google’s cloud services and is priced based on resource usage.
Then-CEO Paul Stahura said Nomulus “provides Donuts with an alternative back-end with significant benefits.”
Now-CEO Bruce Jaffe said yesterday that “Rightside’s registry platform has the right combination of innovative features, ease-of-operation, scalability, and highly responsive customer support”.

Comment Tagged: back-end, donuts, google, nomulus, rightside

GoDaddy Super Bowl ad results “best ever”

GoDaddy said its Super Bowl commercial, which aired yesterday, resulted in its “best ever” Sunday for new customers.
The company said in a press release it had seen its “its best-ever Sunday for attracting new customers in the books”.
That doesn’t necessarily mean it sold more domains than its previous Super Bowl efforts, nor that it made more money.
It seems the web site builder service GoCentral, which is currently offered with a free trial period, accounted for “about half” of these new customers.
GoCentral was the subject of the ad, in which the abstract concept of “The Internet” is embodied as an irritating hipster. It can be viewed here:

1 Comment Tagged: gocentral, godaddy, super bowl

ICANN to host DNS event in Madrid

ICANN is to hold a “DNS Symposium” in Madrid this May.
The event will “explore ICANN’s current initiatives and projects relating to DNS research, operations, threats and countermeasures and technology evolution”, according to ICANN.
It’s a one-day event, focused specifically on DNS, rather than the domain name registration business.
The Symposium immediately follows the GDD Summit, the annual ICANN industry-focused intersessional event designed for registrars, registries and the like.
The Summit runs from May 9 to 11 and the Symposium is on May 13.
Both events will be held at the Hotel NH Collection Madrid Eurobuilding in Madrid and will be webcast.
ICANN is currently looking for corporate sponsors for the Symposium.

Comment Tagged: dns, dns symposium, gdd summit, ICANN

.club financing option sees early traction with $150k sales

.CLUB Domains said it has seen some early successes with its new 0% financing option, selling $150,000 worth of premium .club domains in its first week.
The registry announced that it sold 39 premiums for a total of $149,480, and that 37 of those names were sold using the financing option.
This option allows registrants to spread the cost of their domains over five years — 60 monthly payments — for names priced over $1,000.
The scheme was announced at the NamesCon conference in conjunction with a new brokers program, which gives brokers the ability to pass on 10% discounts to their clients and earn 15% commissions.
Seventeen of the 39 names were sold via brokers.
The results of the the first seven days of these programs compare favorably to other periods. In the fourth quarter of 2016, .CLUB said premium sales were $112,000.
For the whole of 2016, the registry sold $941,000 of reserved premium names, making a total of $4.3 million since .club launched May 2014.

Comment Tagged: .club, .club domains, brokers, financing, new gTLDs, premium

ICANN’s divorce from the US cost $32 million

The IANA transition cost ICANN a total of $32 million, according to documentation released today.
The hefty bill was racked up from the announcment of the transition in March 2014 until the end of 2016, according to this presentation (pdf).
A whopping $15 million of the total went on lawyers.

Another $8.3 million went on other third-party services, including lobbying, PR and translation.
More than half of the overall expenses — $17.8 million — was incurred in ICANN’s fiscal 2016, which ended last June.

3 Comments Tagged: iana, ICANN, transition

Complaints about registrars dip in 2016

There were slightly fewer complaints about domain name registrars in 2016, compared to 2015, according to newly published ICANN data, but complaints still run into the tens of thousands.
There were 43,156 complaints about registrars to ICANN Compliance in 2016, compared to 45,926 in 2015, according to the data (pdf). That’s a dip of about 6%.
The overall volume of complaints, and the dip, can be attributed to Whois.
About three quarters of the complaints directed at registrars in 2016 were for Whois inaccuracy — 32,292 complaints in total, down from 34,740 in 2015.
The number of complaints about gTLD registries was pretty much flat at 2,230, despite hundreds of new gTLDs being delegated during the year.
The vast majority of those gTLDs were dot-brands, however, with nowhere near the same kind of potential for abuse as generally available gTLDs.
The biggest cause for complaint against registries, representing about half the total, was the Zone File Access program. I’ve filed a few of these myself, against dot-brands that decide the ZFA policy doesn’t apply to them.
Formal, published breach notices were also down on the year, with 25 breaches, four suspensions and four terminations, compared to 32 breaches, six suspensions and eight terminations in 2015.
That’s the second consecutive year the number of breach notices was down.

Comment Tagged: compliance, ICANN, whois

Thick Whois policy for .com is now live

The domain name industry is kicking off one of its most fundamental shifts in its plumbing this week.
Over the next two years, Verisign and every registrar that sells .com domains will have to rejigger their systems to convert .com from a “thin” to “thick” Whois.
This means that by February 1, 2019, Verisign will for the first time control the master database of all Whois records for .com domains, rather than it being spread piecemeal across all registrars.
The switch comes as a result of a years-in-the-making ICANN policy that officially came into force yesterday. It also applies to .com stablemates .net and .jobs.
The first big change will come August 1 this year, the deadline by which Verisign has to give all of its registrars the ability to submit thick Whois records both live (for new regs) and in bulk (for existing ones).
May 1, 2018 is the deadline for all registrars to start submitting thick Whois for new regs to Verisign, but they can start doing so as early as August this year if they want to.
Registrars have until February 1, 2019 to supply Verisign with thick Whois for all their existing registrations.
There’s a process for registrars who believe they would be violating local privacy laws by transferring this data to US-based Verisign to request an exemption, which may prevent the transition going perfectly uniformly.
Some say that the implementation of this policy may allow Verisign to ask for the ability to ask a for an increase in .com registry fees — currently frozen at the command of the US government — due to its inevitably increased costs.
Personally, I think the added costs will likely be chickenfeed compared to the cash-printing machine that is .com, so I think it’s far from a slam-dunk that such fee increases would be approved.

4 Comments Tagged: .com, .jobs, .net, ICANN, thick, verisign, whois

ICANN feeds troll, refuses to censor “rip-off” web site

ICANN’s board has rejected a formal demand that it “take down” the web site RipoffReport.com in what is possibly the strangest Request for Reconsideration case it has considered to date.
The almost 20-year-old site hosts reports from consumers about what they consider to be “rip-offs”. It’s seen its fair share of controversy and legal action over the years.
Somebody called Fraser Lee filed the RfR in December after (allegedly) trying and failing to get the site’s registrar, DNC Holdings (aka Directnic), to yank the domain and then trying and failing to get ICANN Compliance to yank DNC’s accreditation.
The request (pdf) is a rambling, often incoherent missive, alleging that RipoffReport contains “legally proven illegal defamatory, copyright infringing, hateful, suicidal and human rights depriving content” and demanding ICANN “take down the site RIPOFFREPORT.COM AS EXPECTED BY THEIR POLICIES OR RISK BEING SUED AS AN ENDORSER OF CYBER TERRORISM.”
ICANN’s Board Governance Committee has naturally enough rejected (pdf) the request, largely on the grounds that it does not have the authority to police internet content and that it could find no evidence that DNC had breached its contract:

the Requester ultimately seeks to have ICANN assume greater responsibility of policing purportedly illegal activity on the Internet, and attempts to place the burden on ICANN to regulate content on the Internet. That is not ICANN’s role. If content is to be regulated, that review and enforcement falls to institutions charged with interpreting and enforcing laws and regulations around the world, such as law enforcement

In a bizarre twist, the BGC further decided that “Fraser Lee” may not even be the person who filed the original complaints with DNC and ICANN Compliance.
“Fraser Lee, has never initiated a complaint with the ICANN Contractual Compliance department,” the BGC wrote.
A lengthy (and, one imagines, maddening) email thread between DNC’s lawyer and somebody called “Smith”, evidently provided by DNC to ICANN (pdf), appears show that at least two different identities are in play here.
It’s an odd one for sure, but it does have the virtue of getting ICANN’s board on the record again stating that it does not police content.

2 Comments Tagged: directnic, dnc holdings, ICANN, reconsideration, rfr, ripoffreport

ICANN loses another IRP — .sport gTLD fight reopens as panel finds “apparent bias”

The future of the .sport gTLD was cast into turmoil this week after an independent panel ruled that there was “apparent bias” in the decision that awarded the string to a group linked to the Olympics.
The new Independent Review Panel ruling found that ICANN broke its own bylaws by refusing to allow Famous Four Media to appeal a 2013 decision that essentially awarded .sport to rival bidder SportAccord.
FFM claims the expert panelist tasked with deciding SportAccord’s Community Objection had undisclosed conflicts of interest that made him much more likely to rule in favor of SportAccord, which is backed by the International Olympic Committee, than FFM, which is a purely commercial operator.
And the IRP panel did not disagree, ruling this week that ICANN should have taken FFM’s claims into account before rejecting its requests for an appeal in 2014.
The ruling means that ICANN may be forced to throw out the Community Objection decision from 2013 and order it to be re-tried with a new expert, potentially allowing FFM back into the .sport contest.
As usual with IRP cases, the ruling is a complex and very dry read, involving multiple layers of objections, appeals, panels and experts.
FFM and SportAccord were the only two applicants for .sport in the 2012 application round.
SportAccord, which has the backing of dozens of sporting organizations in addition to the IOC, claims to represent pretty much all organized sport and wants to run .sport with restrictions on who can register.
FFM, conversely, wants to keep it open to everyone with a passing interest in sport.
In an attempt to kick FFM out of the contest without a potentially expensive auction, SportAccord filed, and then won, a Community Objection in 2013.
To win, it had to prove that the interests of the sport community would be harmed if FFM got to run it. The objection expert panelist, Guido Tawil, came down on SportAccord’s side.
FFM naturally enough disagreed with his conclusion, and vowed to fight to overturn it.
The registry later discovered that Tawil had undisclosed ties to the IOC, which it said should have disqualified him from acting as an independent expert.
First, Tawil attended a conference of the International Bar Association in Rio de Janeiro in 2011 called “Olympic‐Size Investments: Business Opportunities and Legal Framework”, where he co‐chaired a panel entitled “The quest for optimising the dispute resolution process in major sport‐hosting events”.
Second, the law firm he works for, Argentina-based M & M Bomchil, counts DirecTV among its key clients and at the time of the Community Objection DirecTV was negotiating with the IOC for Latin America broadcasting rights for the Sochi 2014 and Rio 2016 Olympics, rights it subsequently obtained.
Third, a partner in Tawil’s law firm is president of Torneos y Competencias, a sports broadcaster with ties to DirecTV.
FFM has claimed: “Guido Tawil’s own legal practice and business is built around a company for whom IOC broadcasting rights are a core aspect of its business.”
While FFM filed two Requests for Reconsideration with ICANN in late 2013 and early 2014, raising the possibility of conflicts of interest and demanding ICANN have Tawil’s ruling thrown out, both were rejected by ICANN’s Board Governance Committee.
It also took its claims to the ICANN Ombudsman, who drafted (but did not finalize) a finding that agreed with FFM that the Community Objection should be retried with a new expert.
The subsequent IRP filing challenged the two RfR decisions and, two years later, the IRP panel has now ruled:

the IRP Panel is of the view that in order to have upheld the integrity of the system, in accordance with its Core Values, the ICANN Board was required properly to consider whether allegations of apparent bias in fact gave rise to a basis for reconsideration of an Expert Determination. It failed to do so and, consequently, is in breach of its governing documents.

The panel also said that ICANN should have taken the Ombudsman’s draft report into account.
It declared:

that the action of the ICANN Board in failing substantively to consider the evidence of apparent bias of the Expert arising after the Expert Determination had been rendered was inconsistent with the Articles, Bylaws and/or the Applicant Guidebook.

The panel has ordered ICANN to pay FFM’s share of the $152,673 IRP costs.
ICANN’s board will now have to consider the IRP decision, and it seems very possible that a new Community Objection review might be ordered.
On the face of it, it looks like a big win for FFM.
That does not mean that SportAccord will not prevail in its objection for a second time, even with a different presiding expert, however.
One fact in its favor is that it now has three years’ worth of evidence of how Famous Four conducts its business — selling domains at super-cheap prices, some say at the expense of the cleanliness of its namespaces — with which to attempt to show the likelihood of harm.
What seems certain is that the .sport gTLD is not going to see the light of day any time soon.
Read the ruling as a PDF here.

Comment Tagged: .sport, Famous Four Media, ICANN, ioc, irp, new gTLDs, olympics, reconsideration, sportaccord