Anguilla fears the .ai junk drop

A junk drop is an anxiety-inducing prospect for any domain registry, but what if the registry is a national government and domain revenues are suddenly a huge portion of the money it has to spend on public services?

That’s the situation the Caribbean island of Anguilla finds itself in today, having benefited from a huge windfall last year with the sale of .ai domains but not a guarantee that its hundreds of thousands of new registrants will stick around.

Speaking to the local legislature in mid-December, Premier Ellis Webster said that .ai sales brought in a projected 77.18 million East Caribbean Dollars ($28.5 million) in 2023, compared to its start-of-year budget estimate of EC$24 million ($8.9 million).

That’s a huge chunk — about 20% — of the government’s overall 2023 revenue of EC$399.13 million ($148 million).

Just two years earlier, before the popularization of AI with the rise of tools such as ChatGPT, domains were bringing in just shy of EC$20 million ($7.4 million) against an overall government revenue of EC$220 million ($81.4 million).

But it seems Webster has been well-advised on the speculative nature of the domain name industry. He told lawmakers .ai’s performance was “a moment of pride and potential” but added that it “also calls for a moment of introspection and caution”.

The main beneficiary of the new domain money will be the development of Anguilla’s small single airport and growing the island’s important tourism sector, Webster indicated, something governments have been promising for years. Roads and schools will also see investment.

Anguilla is a British overseas territory with an estimated population of about 16,000.

According to a transcript of his remarks (pdf), Webster said:

We must acknowledge that these revenue streams, while robust, are not under the direct control of our government. The digital landscape is ever-changing, and what seems like a perennial source today can rapidly evolve tomorrow…

Our approach must be balanced — leveraging this opportunity to enhance our infrastructure and services while maintaining a diversified and sustainable revenue base. This will ensure that we do not find ourselves in a precarious position should the dynamics of the digital domain market shift

While .ai may be somewhat resistant to over-speculation due to its high prices (up to 10x .com, depending where you buy), those high prices may also inspire speculators to let their names drop if the .ai aftermarket fails to live up to expectations.

It seems certain that AI is going to become an all-pervasive force in human civilization in the coming years, but there’s always the risk that the same might not be true of .ai.

XYZ junk drop sinks the industry in Q3

The total number of domains registered in the world suffered a rare period of decline in the third quarter, according to Verisign’s latest numbers.
The Q3 Domain Name Industry Brief shows September ended with 330.7 million registered names across all TLDs, a 1.2 million dip on the second quarter.
Year-on-year, there was still growth: 3.7 million domains, or 1.1%.
The shrinkage follows a flat Q2 and a slowing Q1.
The finger of blame can be primarily pointed at .xyz and .top, which lost millions of domains in the quarter due, in .xyz’s case at least, to the expiration of millions of names that had been sold for a penny or two a year earlier.
Not that you’d know this from the DNIB (pdf). For some reason Verisign doesn’t like talking about new gTLD growth rates in its reports, even when they’re going the wrong way.
Verisign’s own .com and .net grew by 1.5 million names to 145.8 million, putting ground between themselves and ccTLDs, which collectively were up by 500,000 names or 0.3% sequentially to 144.7 million.

Renewals at 55% as first new gTLD junk drop begins

The first new gTLD to go live is seeing its first-year renewals at 55% one year after hitting general availability.
dotShabaka Registry’s شبكة. (or “.shabaka”, the Arabic for “.web”) has also seen its zone file shrink by about 27% over the last two weeks.
The zone peaked at 2,069 domains on February 1, 2015, but today stands at 1,521. Exactly one year ago, it was at 1,561 names.
The zone is smaller today than it was just two weeks after GA began, in other words.
“We can confirm we’re seeing renewal rates for names due in February at around 55%,” Adrian Kinderis, CEO of ARI Registry Services, which runs .shabaka’s back-end, told DI in a statement.
The registry added 1,608 domains in February 2014, 1,400 of those in the first half of the month.
The 55% is the number of domains that were renewed before their February expiry date. The full number for February will not be known until the grace period ends in mid-April.
“We have a handful of cancel renews and all other expired domains are in the auto-renew period,” he said. “It’s too early to examine the numbers for renews post-expiry date, but we expect this will increase the overall tally.”
“Given the market conditions we face in the region, the results align with our forecasts and we expect the numbers to improve for renewals due in the coming weeks and months,” he said.
In gTLDs, domains can enter a Auto Renew Grace Period for up to 45 days after expiration, during which they can still be renewed by their registrant and may or may not appear in the zone file.
It wouldn’t be fair on other new gTLD registries to read to much into these numbers, assuming they do not improve, as شبكة. is a bit of an unusual case.
It’s seen low registration volume, despite the apparently attractive string, largely because it’s restricted to Arabic script at the second level and the Arabic-speaking market is in its infancy.
When شبكة. launched there were no registrars offering an end-to-end Arabic shopping cart, Kinderis said. He added:

The most significant problem still remains demand and consumer awareness…
In regards to demand, the lack of awareness is a direct result of little to no marketing in the region. Apart from our own efforts, there has been little marketing or education programs deployed to increase awareness of new Top-Level Domains and Arabic script domain names.
We have even limited our marketing efforts because we identified early that market readiness is inadequate. Any large investment in marketing from dotShabaka Registry at the moment would be premature and wasteful until supply, demand and universal acceptance issues have been addressed.

He called on ICANN and its recently created Middle East Working Group to focus on ways to increase awareness and demand for domain names in the region. To date, it’s focused too much registrars and technical issues, he said.
شبكة. has its own set of issues and is probably not the best test case for new gTLDs in general.
That’s going to come soon. Donuts’ first batch of gTLDs — .guru, .bike, .holdings, .plumbing, .singles, .ventures and .clothing — had their base-price GA anniversary on February 4, and it appears that domains have already started to drop.
There’s little indication of anything amiss in the .guru zone file so far but the other six are down slightly — by maybe 100 or so names apiece, or less than 1% each — over the last two weeks.
Donuts executives have said they expect first-year renewals to be strong, but we’ve got a few weeks left before anyone will be in a position to know for sure.

Russians flee from IDN during first junk drop

Russia’s internationalized ccTLD, .РФ, lost 18% of its registered domains under management after its first launch anniversary, according to the registry.
Coordination Center for ccTLD said that the registry peaked at 954,012 names on December 28, but DUM had dropped to 779,264 by February 15, a 174,748 domain decline.
While the Center spun this as lower than expected – some experts had apparently predicted 25% to 30% of the early-adopter names would expire – it’s still relatively high.
Telnic deleted about 15% of its names during .tel’s first junk drop, the most recent in the gTLD space, for example.
The Russian registry has also made an eye-opening set of stats related to .РФ available on a new web site.
It reveals that just 33% of .РФ domains resolve to a web site (any web site, presumably including parking) while 29% do not even have name servers.