Verisign boss talks .web launch, timing and pricing

Verisign hasn’t fully won .web yet, but it expects to soon and is talking in general terms about what the it might look like live.

CEO Jim Bidzos yesterday told analysts that he expects the Independent Review Process panel currently considering an appeal by rival applicant Afilias to deliver its final verdict before the end of the year. No hearings are scheduled.

Afilias claims Verisign and its secret proxy, Nu Dot Co, cheated, and that ICANN broke its own rules, in the 2016 auction that saw Verisign promise to pay $135 million for .web. Verisign thinks the claims are rubbish.

Bidzos told analysts, wanting to known when they can put .web revenue into the models, that it while it’s a “bit early to speculate” when the company will launch .web, it will likely happen a “couple of quarters from delegation”.

On pricing, he noted that .web does not have the same price controls as .com and .net:

.web is, of course, different from .com and net and that it’s not a price controlled TLD… We do have flexibility with it that we don’t have with other TLDs, and premiums are available. Other sorts of options are available.

But will the company put its marketing muscle behind .web? Many people, myself included, have said that Verisign’s interest in the gTLD is more about keeping it out of its rivals hands. Bidzos said:

There certainly will be some sort of marketing launch that will occur, but I just think it’s too early to really talk about what that would look like and what the expense impact will be. But we certainly intend to market and promote .web. Our plan, our desire, as we’ve stated — and I’ll say again — is to offer our customers more choice and to make .web a very successful TLD.

His comments came as Verisign reported its third-quarter financial results.

The company reported revenue up 5.1% at $334 million and net income of $157 million compared to $171 million a year ago.

It had 172.1 million .com and .net domains in its registry at the end of the quarter, up 1.48 million sequentially and a 5.1% increase on the year-ago number.

Nothing but losses ahead for MMX

Former new gTLD registry MMX has delivered its latest set of financial results and warned that, without any operating business, it will be loss-making for the foreseeable future.

The company today reported a first-half loss of $783,000, compared to a loss of $1.25 million in the year-ago period.

That’s calculated from its ongoing operations, which since the $120 million sale of its registry business to GoDaddy comprises no revenue-generating activities but substantial costs keeping the company running and maintaining its listing on the AIM stock market.

Profit from discontinued operations was $3.38 million, compared to $2.68 million.

It still has small “RSP” business, providing non-technical back-office management services to a few former gTLD partners, but this will be wound down or sold off.

CEO Tony Farrow said in a statement:

We are now in the process of delivering the transition services agreed with GoDaddy Registry and disposing of, or otherwise winding down, our RSP Business. Whilst the transition services are being provided on a cost recovery basis, the Company’s ongoing administrative and other public company costs will result in operating losses for the Group going forward.

When the winding down of existing businesses is done, MMX will look for acquisition opportunities or act as a vessel for a reverse takeover.

It’s currently returning $80 million of its GoDaddy cash to investors with a buyback, but this is not enough to clear all of its shares.

NameSilo says it’s growing too fast to be acquired

NameSilo Technologies has called off talks to sell its registrar, also called NameSilo, saying the company is growing too fast to exit right now.

The Canadian company grew its domains under management by 578,000 between April 2020 and April this year, when it stood at 3.9 million domains. It says it has since crossed 4.3 million.

The prospective deal, with Dutch acquisition vehicle WGH Holdings was announced last December.

But NameSilo’s CEO Paul Andreola said in a press release:

We believe that the value of Namesilo has grown significantly since the discussions with the prospective buyer began and feel that there is more value to be unlocked over the near to medium term for shareholders.

At the same time, the company reported revenue of $8.4 million for the second quarter, up $900,000 on the same period last year, with adjusted EBITDA of $435,344.

Bookings were up to $9.9 million from $7.6 million.

It was the company’s debt that first spurred acquisition talks. NameSilo says that debt has been reduced from $4.7 million to $3.85 million since March.

CentralNic trumpets organic growth as its registrars reverse shrinkage

While positioning itself as a consolidator for the last few years, CentralNic today boasted that it’s also growing organically by a healthy amount.

The company reported Q1 revenue up 48% compared to a year ago at $84.4 million. Organic revenue growth for the same period was reported at 16%. It made a loss after tax of $1.4 million, but adjusted EBITDA of $10.1 million.

CentralNic’s indirect segment, which includes its registry and wholesale registrar businesses, saw revenue up 24% to $25.4 million, led by the registrar. Organic growth was 13%.

The direct segment, which comprises customer-facing retail and corporate registrars and brand monitoring services, saw revenue up 29% to $13.7 million. Organic growth was also 13%.

That segment had seen a drag from the corporate segment in 2020 that was blamed on the coronavirus pandemic, but today CentralNic said “both the Retail business and the Corporate business have returned to growth”.

The company’s newest and already biggest revenue-generating segment is online marketing, which boils down to domain monetization services. Revenue there was up 76% or 19% organically at $45.3 million.

This was largely driven by PubTONIC, a traffic arbitrage platform it acquired with Team Internet last year. The service basically allows web site owners to buy redirect traffic from parked domains.

MMX’s year marked by terrible renewals

MMX saw its revenue dip in 2020, and it reported shocking renewal rates at two of its highest-volume gTLDs, according to the company’s annual financial results, published this morning.

The portfolio registry, which is in the process of selling off essentially its entire operating business to GoDaddy, reported revenue of $16.8 million for the year, down from $17.2 million in 2019.

Profit was up very slighty, to $2.9 million from $2.8 million.

The 2019 results included a few one-off gains, including $588,000 from losing a new gTLD auction, which accounted for most of the 2020 revenue decline.

But the company also reported a 19% decline in domains under management, from 2.46 million to 1.99 million, based on some terrible renewal rates in its .vip and .work gTLDs.

The DUM decline can be attributed mostly to .vip, a popular TLD among Chinese speculators, which started 2020 with around 1.4 million domains but finished the year with just over a million.

.work actually ended the year up on where it started, with around 709,000 names under management.

But MMX today disclosed that the renewal rates for .vip and .work were 36% and 18% respectively. In a business where 70%+ is considered healthy, these are some poor numbers indeed.

However, the company discontinued first-year promotions on these TLDs in 2020, focusing instead on selling domains likely to lead to recurring renewal revenue, which lead to 14% (.vip) and 19% (.work) increases in revenue.

Fewer domains. More money.

MMX said that it is seeing these trends continuing into 2021. Public transaction reports show both these TLDs losing 40-50,0000 names in January. The company expects revenue to fall 4% in the first quarter compared to Q1 2020.

One bright spot appears to be “The Great Relese”, the company’s move last month to mark down hundreds of thousands of premium-priced domains. That’s brought in $170,000 since its April 23 launch.

One basket where the company is placing a lot of its eggs is AdultBlock, the trademark protection service it inherited when it acquired ICM Registry a few years back. It enables customers to block their brands in .xxx, .porn, .adult and .sex without actually having to register the names.

The 10-year period ICM allowed brands to block when it launched in 2011 is coming to an end, so MMX is banking on renewals (which retail at $349 to $799 per year before multi-year discounts) to boost revenue.

“While it is early in the AdultBlock Sunrise B renewal period, we are encouraged by Registrar interest and some early sales of this product,” CEO Tony Farrow said in a statement.

This reliance on AdultBlock for short-term organic growth was one of the reasons MMX is selling up to GoDaddy.

The market-leading registrar and fast-emerging registry consolidator agreed to pay $120 million for MMX’s portfolio, which will leave MMX as a shell company only long enough to distribute the cash to investors before fading away quietly.

That deal has an August deadline to close and is dependent on approvals from business partners, ICANN and the Chinese government.

Earnings reports: GoDaddy, Tucows and NameSilo report growth

Three of the industry’s largest registrars announced revenue growth in their latest reporting periods in recent days.

GoDaddy

Market-leading GoDaddy reported a whopping 18.8% year-over-year revenue growth from domains in its first quarter, with $422.7 million.

CEO Aman Bhutani told analysts that much of this growth is being driven by the company’s emerging strategy of acting as a secondary-market intermediary, making it easier for domainers to sell their domains quickly to end-users (what it calls “independent customers”) and vice-versa.

“Independent customers added over 200,000 domain names that had otherwise been passive into the aftermarket, spurring activity for domain investors,” Bhutani said.

It currently has over 20 million domains listed on its aftermarket platform, contributing 10% of total revenue, the first time it’s broken into double-digits, analysts were told.

Domains was the best-performing segment in growth terms by some margin.

Including its other segments, GoDaddy’s overall Q1 revenue was up 13.8% year over year, at $901.1 million. It had a net income of $10.8 million, compared to $43.2 million a year earlier.

Tucows

Tucows reported domain services revenue up 4%, from $59.5 million in Q1 2020 to $61.2 million, with adjusted EBIDTA of $13.8 million versus $11.5 million a year ago.

CEO Elliot Noss said in a statement that new domain registration growth was slowing following the “pandemic surge” it experienced in 2020, when lockdown-hit businesses flew online to keep afloat.

Including its non-domain segments, Tucows reported Q1 revenue of $70.9 million. That was down from $84 million a year earlier largely as a result of the sale of its Ting Mobile business to Dish Network.

Net income for the quarter was $2.1 million, down 24% compared to the year-ago period.

NameSilo

Fast-growing registrar NameSilo reported revenue for its full-year 2020 of $31 million, up 14.3% on 2019. That was primarily driven by domains growth and its newish add-on services, it said, but it does not break down its revenue by segment.

It had net income of $6.5 million in fiscal 2020, compared to a net loss of $4 million in 2019.

It added 235,347 net domains in gTLDs in 2020, according to reports filed with ICANN, ending 2020 with 3,663,090 names under management. NameSilo said that number is now around 3.9 million.

Verisign expects huge domain growth in 2021

Verisign tonight significantly upgraded its estimate of how many .com and .net domains it expects to sell this year, citing an improving economy and increased growth in online commerce.

CEO Jim Bidzos told analysts that it’s now expecting its domain base to increase by 4% to 5.5% this year. Three months ago, it had cautiously predicted growth would be between 2.5% and 4.5%.

That’s a minimum of 6.6 million net new domains this year.

The upgrade was inspired by its first-quarter performance, in which .com and .net base grew by 4.6% when compared to Q1 2020, to 168 million names.

That was an increase of 2.8 million names during the quarter, which compares to 1.83 million net new domains in Q1 2020 and 1.46 million in Q4 2020. A pretty damn good showing, in other words.

For Q1, Verisign tonight reported net income of $150 million, down from $334 million in Q1 last year, when it experienced a one-off tax benefit.

Revenue was up 3.6% on last year at $324 million.

Lockdown bump sees GoDaddy double customer gains in 2020

GoDaddy almost doubled its rate of customer acquisition in 2020, compared to 2019, as pandemic-related lockdown measures pushed more small businesses online.

The company last week reported that it added 1.4 million customers last year, a 7% year-on-year growth but almost double the number it added the previous year.

It ended the year with 20.6 million customers, up from 19.3 million 12 months prior.

Recognizing that coronavirus restrictions in various parts of the world were increasing demand for domains, hosting and related services, the market-leading registrar upped its marketing spend to make sure it captured as many customers as possible.

It spent $438.5 million on marketing last year, up from $345.6 million in 2019.

Its full-year revenue from domains grew from $1.35 billion to $1,51 billion. Including its other segments, company revenue was up to $3.31 billion from $2.98 billion, an 11% increase.

Domains revenue for the fourth quarter was $402.2 million, up 14.2% on Q4 2019. Total revenue for the quarter was $873.9 million, up 12.0%.

MMX vows to refocus under new boss after crappy 2020

MMX says it plans to refocus its business on higher-margin products after a 2020 marred by plummeting registrations, product delays and financial irregularities that led to senior management being oustered.

The new gTLD registry also revealed that it laid off 20% of its staff in a “right-sizing” exercise last year. Due to its modest size, this means about four or five people lost their jobs.

The company said today that acting CEO Tony Farrow has been confirmed for the job full-time, and that he will join the board of directors after regulatory checks.

Farrow took over last October, when CEO Toby Hall and CFO Michael Salazar were both ejected after admitting to over-stating MMX’s revenue and profit in 2019.

Now, Farrow says MMX will spend 2021 focusing on “quality” regs — those with a higher chance of renewing or with higher-margin reg fees — and on its AdultBlock services, which block trademarks and typos across its four porn-themed gTLDs.

Overall domains under management declined 19% in 2020, which appears to be almost entirely down to .vip, a cheap gTLD that initially performed strongly with Chinese speculators, losing about half a million names.

AdultBlock, which covers the old ICM Registry portfolio, launched at the end of 2019 with a high price tag and a couple bulk sales, but stalled during 2020. MMX blames this for a 3% decline in overall billings last year.

The company also hinted that it may try to offload some of its crappier gTLDs, saying:

The new executive team is also reviewing the contribution received from each of its TLDs and the growth prospects for each from new sales initiatives to ensure the carrying values associated with each TLD is appropriate going forward.

Farrow said in a news release:

Our FY 2021 plan will focus on AdultBlock sales, extensive release of inventory to the market, quality registrations with the view of future renewal revenue and standardized promotions for our channel partners. It is a straightforward business where focus must remain on the quality of our domain registrations and promotions with our channel partners. We lost some of the momentum after the initial launch of AdultBlock in FY 2019. However, FY 2021 was always the target year for the full rollout of this new product, and I am encouraged by the dialogue with our channel partners to really move AdultBlock in FY 2021.

AdultBlock, which sets trademark-match domains aside as non-resolving reserved names, launched with a price tag of between $349 and $799 per trademark per year.

MMX separately announced today that it is paying ICM Registry’s investors, primarily founder Stuart Lawley, over alleged (and denied) breaches of unspecified warranties made at the time of the acquisition in May 2018.

Farrow was COO of ICM from the 2011 launch of .xxx until the MMX acquisition.

.org made $97 million last year

Public Interest Registry has published its 2019 tax returns, revealing a top line of $97.1 million.

That’s a tad under the $101.1 million it reported for 2018, presumably due to the declining number of .org domains under management.

It lost roughly 200,000 names in 2019, bottoming out at 10.4 million, though it has since recovered in 2020.

The returns also reveal that back-end provider Afilias was paid $18.3 million for its trouble, and ICANN was paid $2.6 million in fees.

The Internet Society, which owns PIR and uses it for most of its funding, was paid $67.5 million, up from the $48.7 million given in 2018.

The form also list the salary and bonuses for 20-odd staffers and directors, for the salary voyeurs among you.