New gTLDs slip again in Q1

The number of domains registered in new gTLDs slipped again in the first quarter, but it was not as bad as it could have been.
Verisign’s latest Domain Name Industry Brief, out today, reports that new gTLD domains dropped by 800,000 sequentially to end March at a round 23.0 million.
It could have been worse.
New gTLD regs in Q1 were actually up compared to the same period last year, by 2.8 million.
That’s despite the fact that GRS Domains, the old Famous Four portfolio, has lost about three million domains since last August.
Verisign’s own .com was up sequentially by two million domains and at 141 million, up by 7.1 million compared to Q1 2018. But .net’s decline continued. It was down from 14 million in December to 13.8 million in March.
Here’s a chart (click to enlarge) that may help visualize the respective growth of new gTLDs and .com over the last three years. The Y axes are in the millions of domains.

New gTLDs have shrunk sequentially in six of the last 12 quarters, while .com has grown in all but two.
The ccTLD world, despite the woes reported by many European registries, was the strongest growth segment. It was up by 2.5 million sequentially and 10 million compared to a year ago to finish the period with 156.8 million.
But once you factor out .tk, the free TLD that does not delete expired or abusive names, ccTLDs were up by 1.4 million sequentially and 7.8 million on last year.

GRS has lost three million domains since Famous Four died

The old Famous Four Media gTLD portfolio has shrunk by roughly 60% since old management were kicked out.
At the same time, the new registry is selling less than one percent of the domains it used to add each month.
The 16 TLDs, now managed by GRS Domains, have a total of approximately 2 million domains in their zone files today, compared to about 5 million at the end of August 2018.
Last August was when GRS, which seems to have taken over the portfolio about a year ago, announced that it was introducing “much more transparent and sensible pricing strategy” of $9.98 per domain per year across the board.
Its 16 TLDs include the likes of .loan, .win and .bid. Many had been offered in the sub-$1 range, largely via former affiliate AlpNames, attracting huge volumes of registrations but low renewals and a lot of spammers.
I compared the zone file counts at the end of August 2018 to yesterday’s numbers, rounding to the nearest thousand, and came up with this:
[table id=55 /]
Don’t think for a second that the correction is over. The story of the old FFM portfolio’s decline will roll for many more months. Each TLD is still seeing monthly deletes in the thousands.
The number of new regs across the portfolio every month has dropped off a cliff — a big cliff with jagged rocks and sharks circling at the bottom — since the August price changes.
Whereas in January 2018 the 16 gTLDs saw a combined total of over 400,000 adds, by January 2019 this had dropped to fewer than 1,700, a 99.59% decline.
[table id=56 /]
In each case, the drop-off in adds started in August last year. Each TLD went almost immediately from thousands of new regs per month, to under 100.
I compared Januaries because January 2019 is the date of the most-recent registry transaction data. January 2018 was not an atypically strong month for sales for any of the TLDs; for many, it was on the slow side.
Famous Four was replaced by GRS about a year ago after investors in Domain Venture Partners, the ultimate owner of the portfolio, fell out with FFM management.
The registrar AlpNames, which was responsible for a huge share of FFM’s sales and was managed by the same people, has also since gone out of business.

I was wrong, Famous Four bosses WERE kicked out

Famous Four Media’s portfolio of gTLDs is under new management after an investor rebellion, contrary to what I speculated earlier this week.
FFM’s former stable, which includes the likes of .men and .science, is now being managed by a company calling itself GRS Domains, but this new company has absolutely nothing to do with FFM’s former management.
That’s according to Robert Maroney, founder of Connecticut-based Engineers Gate Investments, which is a shareholder of ultimate portfolio owner Domain Venture Partners.
Maroney got in touch with DI yesterday to explain some of what has recently happened to the ownership and management of the 16 high-volume new gTLDs.
Back in June I speculated based on the quite limited available information that FFM might be bankrupt.
On Tuesday, after GRS Domains announced a relaunch and a rejection of its previous volume-heavy, spam-friendly business plan, I speculated based on slightly more information that management had repurchased the TLD assets after investors forced it into administration.
I was wrong on both counts, according to Maroney. What actually happened is more akin to an investor takeover.
Maroney said he “engineered” the ouster of FFM and its two shareholders/managers, Iain Roache and Geir Rasmussen, after Roache attempted to close down DVP.
DVP is basically a collection of private and institutional investors (brought in by Roache and others) from around the world which, based on the available evidence, have little or no connection to the domain name industry.
It’s a matter of public record that each gTLD contract is owned by a distinct Gibraltar-based shell company — dot Bid Limited owns the ICANN rights to run .bid for example — and that Domain Venture Partners owns these companies.
I’ve previously reported that Famous Four was also owned by DVP, but Maroney said that this was never the case. It was owned 80-20 by Roache and Rasmussen and contracted by DVP to manage the 16 gTLDs.
The affiliated registrar AlpNames, which has been responsible for a very large portion of registrations in the portfolio, had the same ownership structure as FFM and was never directly connected to DVP, Maroney said.
Following a court battle, GRS Domains has replaced FFM as the registry manager.
GRS is owned by PricewaterhouseCoopers, and is currently being managed by court-appointed administrator Edgar Lavarello, a Gibraltar-based accountant at PwC.
Maroney did not want to get into the detailed specifics about what caused the investor revolt, but did say that shareholders were unhappy with how FFM was managing the portfolio.
Its low-price, high-volume strategy had caused its TLDs to become the destinations of choice for spammers and other abusive registrants.
But the court case was brought after Roache attempted to break up DVP, restructure ownership of the 16 individual registries, and “escape the regulation of Gibraltar”, Maroney said.
“Roache wanted to shut down DVP in a way we considered to be unlawful,” he said.
He said DVP shareholders felt Roache’s moves were “inappropriate and unlawful”, which is what caused him to “engineer”, via fellow investor Christina Mattin, DVP being placed into administration.
I have seen no independent evidence that Roache acted or attempted to act unlawfully. The court document I’ve seen appointing Lavarello as administrator contains no finding of wrongdoing by anyone.
The upshot of all this is that the group of TLDs formerly known as Famous Four Media is now GRS Domains — Global Registry Services Ltd — and that Lavarello is currently in charge.
I imagine the company will want to find permanent management at some point, but Maroney did not want to talk about that.
In the meantime, GRS has already made moves to become more transparent and to engage more with the rest of the industry.
Maroney said, and I have independently confirmed, that he was at the ICANN meeting in Panama recently, meeting senior industry figures. Famous Four executives have not been known to attend ICANN meetings or industry events in the past.
GRS has told registrars it intends to have a formal presence at ICANN 63 in Barcelona also.
The company will shortly terminate all of its promotional pricing and introduce a flat $9.98 registry fee, which is very likely to affect its volumes and reduce spamming activity over the next year or so.
UPDATE July 30 2020: This article was edited to remove an erroneous link to the web site of Engineers Gate LP, which is not the same company as Engineer’s Gate Investments LLC.
UPDATE August 12 2020: This article was edited to correct GRS’s ownership status. It’s owned by PwC, not DVP. Roache’s job title at FFM was also corrected.
In addition, Roache recently wrote to DI, almost two years after the article was originally published, and made the following statements:

Famous Four Media (FFM) was placed in voluntary administration by myself and Mr Rasmussen as respective 80% and 20% shareholders, due to invoices that went unpad by PWC Gibraltar as administrator to DVP.
…
There was NO “court battle to replace FFM with GRS”. FFM withdrew services after promises to pay FFM its outstanding invoices by PWC turned out to be untruthful.
…
To say or repeat the allegation that it was “unlawful” to close the fund down is untrue… DVP was set up as a closed end fund with a maximum maturity of April 2018 on 12 April 2012 — i.e. a 5-year fund with a one-year extensions.
Against the recommendation of myself as Investment Director and largest creditor and investor, the support of the Board, the regulated Fund Administrator Juno, the Fund’s own regulated legal counsel Isolas and the approval of the Gibraltar Financial Services Commission — a number of investors pushed to place the Fund into administration. The actions of those few investors led by Ms Mattin, Mr Maroney and PWC have been hugely prejudcial to other investors in DVP and the seed investors, including myself. In April 2018 the valuation of the Fund’s assets was in excess of £30 million and of the total registry assets more than £100 million — today the value is close to zero if not insolvent under the disastrous management of PWC, Maroney and Mattin.
Mr Maroney’s statement that he “engineering the ousting of Mr Rasmussen and I” is also untrue — I made it clear to all investors in DVP in an emaill dated October 2017 that if the Fund was not redeemed in Specie with investors honouring their debts then the alternative choice would be a structured administration which ran the risk of losing their entire remaining assets in DVP.

Famous Four is DEAD! New registry promises spam crackdown

Famous Four Media’s portfolio of gTLD registries is now under the control of a new company, Global Registry Services Ltd, which has promised to abandon its failed penny-domain strategy and crack down on spam.
(August 9 update: This article contains some incorrect assumptions and speculation. Please read this follow-up piece for clarifications.)
The company, which goes by the name GRS Domains, told registrars yesterday that FFM’s 16 gTLDs are now “controlled by the same parties that control Domain Venture Partners PCC Limited, and are no longer under the management of FFM.”
DVP also owned FFM, so it’s not clear how big of a deal this restructuring is from a management point of view.
My sense is that there’s not really been a substantial change, but it’s certainly more than a simple rebranding exercise.
I’ve learned that DVP was placed into administration under the Insolvency Act back in April, with management of the TLDs handed to a PricewaterhouseCoopers administrator, more or less as I speculated in June.
The TLDs affected are: .loan, .win, .men, .bid, .stream, .review, .trade, .date, .party, .download, .science, .racing, .accountant, .faith, .webcam and .cricket.
GRS told registrars:

Moving forward there are several changes being made with regard to the overall strategy of the portfolio of gTLDs, the main one being a change to a “quality over quantity” ethos and focusing on working with our Registrar Partners to sharply reduce abuse and spam registrations.

As such, all of its current pricing promotions will end August 20 and a “much more transparent and sensible pricing strategy” will come into play.
That means a wholesale reg fee of $9.98 across the board, at least until February 2019.
GRS also plans to take a lot of its lower-priced reserved “premium” names out of the premium program altogether, and to reprice “a considerable portion” of the more expensive ones.
Finally, the company, not known to attend ICANN meetings in the past, said it plans to show up at the Barcelona meeting in October to formally relaunch itself.
Famous Four has become notorious over the last few years for its deep-discounted TLDs, which have become a haven for spammers who want to register large numbers of super-cheap, throwaway domains.
As such, its gTLDs’ volumes have been huge — many racking up hundreds of thousands of names — but their renewals poor and their reputation worse.
If GRS’ new strategy is effective, we’re almost certainly going to see the industry-wide overall number of active new gTLD domains tank over the next year or so, giving more ammunition to those who think the new gTLD program was a huge waste of effort.
It could also have an impact on ICANN’s budget — no matter how cheap FFM sold its names, it still had to pay its ICANN fees on a per-domain basis. Fewer domains equals less money in ICANN’s coffers. FFM’s registries paid over $1.6 million in ICANN fees in the organization’s fiscal 2017.
While GRS is now apparently “controlled by the same parties that control Domain Venture Partners PCC Limited”, it’s not abundantly clear to me whether that’s the same people who’ve been running FFM for the last eight years.
DVP has not immediately responded to a request for comment today.
The DVP web site has not resolved in months. The new grs.domains site doesn’t name anyone, and the NIC sites for the gTLDs in the portfolio only identify a PwC bankruptcy accountant as the primary contact.
All the companies in question are based in tax haven Gibraltar, which isn’t particularly forthcoming about identifying company directors, partners or owners.
DVP’s directors were originally Adrian Hogg, Charles Melvin, Iain Roache, Douglas Smith, Peter Young, Joseph Garcia and a company called Domain Management II (itself chaired by Roache), according to an investor presentation (pdf) DI obtained back in 2013.
I believe Melvin at least, after a legal dispute with the others, is no longer involved.
And it appears that DVP is or was in fact in administration.
I noted back in June that the 16 gTLDs were now all being administered by PwC accountant Edgar Lavarello, and wondered aloud whether this meant FFM was bankrupt.
Today I obtained (read: paid an extortionate sum for) a Gibraltar court order dated April 23 putting DVP into administration under the Insolvency Act and appointing PwC as the administrator.
The application had been made by an investor called Christina Mattin and fellow investor Braganza, a private vehicle owned by a wealthy Scandinavian family, which was (at least last year) a 10% owner.
Other named investors the court heard from were the mysterious Liechtenstein-based Rennes Foundation, something called Northern Assets Investments Limited and Dutch multimillionaire Francis Claessens.
Overall, it smells a bit to me like DVP’s principals, having seen their previous venture put out of business by disgruntled investors, have snapped up its assets and are going to try to make a second go of running the business.
As for FFM? Well, it looks rather like we won’t be hearing that name again.
UPDATE: This article was updated several hours after it was originally posted to clarify that DVP was/is “in administration”.

ICANN finds no conflict of interest in .sport decision

ICANN has rejected claims that the .sport gTLD contention set was settled by an arbitrator who had undisclosed conflicts of interest with the winning applicant.
Its Board Governance Committee last week decided that Community Objection arbitrator Guido Tawil had no duty to disclose his law firm’s ties to major sports broadcasters when he effectively eliminated Famous Four Media from its fight with SportAccord.
Back in 2013, SportAccord — an applicant backed by pretty much all of the world’s major sporting organizations — won the objection when Tawil ruled that FFM’s fully commercial, open-registration bid could harms its members interests.
FFM complained with Requests for Reconsideration, Ombudsman complaints and then an Independent Review Process complaint.
It discovered, among other things, that Tawil’s law firm was helping broadcaster DirecTV negotiate with the International Olympic Committee (one of SportAccord’s backers) for Olympics broadcasting rights at the time of the Community Objection.
The IRP panel ruled in February this year that the BGC had failed to take FFM’s allegations of Tawil’s “apparent bias” into account when it processed Reconsideration requests back in 2013 and 2014.
So the BGC reopened the two Reconsideration decisions, looking at whether Tawil was required by International Bar Association guidelines to disclosed his firm’s client’s interests.
In a single decision (pdf) late last week, the BGC said that he was not required to make these disclosures.
In each of the three claims of bias, the BGC found that the connections between Tawil and the alleged conflict were too tenuous to have required disclosure under the IBA rules.
It found that the IOC and SportAccord are not “affiliates” under the IBA definition, which requires some kind of cross-ownership interests, even though the IOC is, judging by the .sport application, SportAccord’s most valued supporter.
The BGC also found that because Tawil’s firm was representing DirecTV, rather than the IOC, the relationship did not technically fall within the disclosure guidelines.
For these and other reasons, the BGC rejected FFM’s Reconsideration requests for a second time.
The decision, and the fact that FFM seems to have exhausted ICANN’s appeals mechanisms, means it is now more likely that SportAccord’s application will be allowed to continue negotiating its .sport Registry Agreement with ICANN, where it has been frozen for years.

Famous Four exec moves to CentralNic

Famous Four Media has lost its chief marketing officer to CentralNic.
Andy Churley joined the London-based registry services provider as group marketing manager this month, according to press release.
He’s been with FFM for the first few years of its entry into the gTLD game, overseeing the launches of cheap TLDs such as .science, .download and .bid.
Previously, he was with the registrar Group NBT.
CentralNic now of course is also in the registrar business, having acquired Internet.bs and Instra over the last few years.