.xyz back on sale in China

Chinese registrars have started to carry .xyz domains again, about five months after a Chinese government ban.
West.cn and Net.cn are two of the China-based companies that appear to be selling .xyz names at the yuan equivalent of a US dollar, based on a spot check this morning.
West.cn flagged the “restoration” of service on its blog today, saying it was “overjoyed” to resume sales.
XYZ.com revealed back in May that its new gTLD domains were “temporarily” no longer available via Chinese registrars, after the government there suspended its license.
The reason for the suspension has always been a little vague, but the registry told DNW back in May that it related to Real Names Verification.
RNV is the government-mandated identity check that must take place before anyone in China can register and use a domain name.
XYZ had been outsourcing the function to ZDNS, but that relationship fell apart for some reason (rumor has it there was a money dispute) and XYZ decided to switch to Tele-info.
In the interim, Chinese registrars, apparently under order of their government, dutifully stopped carrying .xyz domains.
XYZ also went through ICANN’s Registry Services Evaluation Process to get its move to Tele-info approved at the Registry Agreement level.
The downtime prevented XYZ from masking the precipitous decline in its number of domains under management, which has fallen by over three million since May.
XYZ and the Chinese government have yet to issue statements about the newly reinstated license.
UPDATE 10/10/2017 — XYZ.com got in touch last week to say that .xyz was never “banned” in China.
A spokesperson said in an email: “We had RNV in place with ZDNS and opted to switch. To be compliant with ICANN, we suspended registrations in China.”
He declined to clarify whether the suspension was voluntary or ICANN-mandated.
He also declined to confirm or deny that Chinese registrars been told to suspend .xyz registrations by the government, as local sources have previously told DI and Domain Name Wire.
Other gTLDs owned by other registries have previously obtained Chinese licenses without ICANN first approving their RNV providers.

Okay, pedants, only 36% of new gTLDs are shrinking

Thirty-six percent of non-brand new gTLDs are shrinking, DI analysis shows.
According to numbers culled from zone files, 156 of the 435 commercial gTLDs we looked at had fewer domains yesterday than they did a year earlier.
On the bright side, that means the majority of them are still growing, but…

You: Wait, Kev, didn’t you write this exact same story yesterday, but said that 40% of new gTLDs were shrinking? Why are you now saying it’s 36%?
Me: People in the comments and on social media complained that I’d used domains under management (DUM) from May’s registry transaction reports — the most recent available — to collate the data yesterday, rather than more recent but less accurate zone files.
You: Why did they complain?
Me: I think because the May numbers show .xyz gaining on an annual basis, and yet everyone and his grandmother knows that .xyz’s numbers dropped off a cliff in July.
Your Grandmother: It’s true, they did. They lost millions…
You: Shut up, Gran. So, Kev, presumably if you do the same survey again, using the same TLDs, but use zone file data from this week instead, you’ll discover that the number of shrinking TLDs is far greater than 40%?
Me: Why would you presume that?
You: Because I also hate new gTLDs in general, not just .xyz specifically.
Me: Actually, the number of shrinking new gTLDs turns out to be smaller.
You: How come?
Me: Because only 36% of the gTLDs I surveyed had fewer numbers in their September 18, 2017 zone file than they did in their September 18, 2016 zone file.
You: So you actually over-reported the shrinkage in your first post? How come? I thought you were a shameless stooge of the new gTLD industry.
Me: I get that a lot.
You: Is .xyz at least on the list of biggest losers now?
Me: It is. Right at the top.
You: Good. I really fucking hate .xyz. What else changed? Stands to reason that some losers first time around are now gainers.
Me: Correct. Famous Four Media’s .party, for example, was a top 10 loser in the report comparing May 2016 DUM to May 2017 DUM, losing over 100,000 names, but it’s a top 10 gainer in the September-September zone file report, adding 85,000.
You: Explain.
Me: Well, .party’s reg numbers fell off a cliff in July 2016, and were still pretty depressed a year ago, but have since regained ground, presumably due to them costing less than a pack of gum.
You: Got it. Any others?
Me: It’s a similar story for .webcam, .work, .bar, .audio, .rest and a few others. They all shrunk May-May but gained September-September.
You: So, in summary, the new gTLD industry isn’t as unhealthy as you made out on Monday?
Me: Maybe. To be honest I don’t think the disparity between 36% and 40% makes a whole lot of difference. It’s still quite a lot of TLDs growing in the wrong direction. At one time, that kind of thing was virtually unheard of.
You: True dat.
Me: Anyway, can I get back to my blog post now?
You: Sure. Just don’t expect me to read to the end.

L’Oreal is using “closed generic” .makeup in an interesting way

What do you call a registry that defensively registers names on behalf of the very people that would be its most likely customers if the TLD weren’t so hideously overpriced?
L’Oreal, apparently.
About half of its .makeup new gTLD comprises the names or nicknames of social media “influencers” in the make-up scene, and they all seem to belong to the registry.
Ironically, these are precisely the kind of people you’d expect to actually go out and register .makeup domains, if they didn’t cost close to $7,000 a pop.
L’Oreal put a $5,500 wholesale price-tag on .makeup domains, evidently as a Plan B to avoid actually having to sell names to people, after its original plan to keep the string as a “closed generic” failed due to ICANN politicking.
As you might expect, uptake has been minimal. The zone file currently has about 266 domains in it.
Beyond L’Oreal itself, there are defensive registrations by companies not remotely related to the make-up industry, such as BMW and Intuit, and registrations by competing companies in the cosmetics industry, such as Christian Dior and Estee Lauder.
But there are also something like 150 .makeup domains that were all registered at the same time, this April, representing the names and social media handles of young women who post YouTube videos about makeup for their often thousands of subscribers.
It turns out these women are all participants (willing, it seems) in WeLove.Makeup, a web site created by L’Oreal to promote its products.
The site is basically a social media aggregator. Each “influencer” has their own page, populated by their posts from YouTube, Instagram, Twitter, and such. It’s maintained by Findie, which specializes in that kind of thing.
The domains matching the participants names do not resolve to the site, however. They’re all registered to L’Oreal’s registry management partner Fairwinds and resolve to ad-free registrar parking pages.
The names were registered via 101Domain, which prices .makeup names at $6,999, but I’ve no idea what payment arrangement Fairwinds/L’Oreal has for this kind of thing.
This is what a wannabe closed generic can look like, it seems — the registry pricing its customers out of the market then registering their names on their behalf anyway.
Is this “innovation”?

Four in 10 new gTLDs are shrinking

Forty percent of non-brand new gTLDs are shrinking, DI analysis shows.
According to numbers culled from registry reports, 172 of the 435 commercial gTLDs we looked at had fewer domains under management at the start of June than they did a year earlier.
On the bright side, that means the majority of them are still growing, but it’s still a pretty poor showing.
As you might expect, registries with the greatest exposure to the budget and/or Chinese markets were hardest hit over the period.
.wang, .red, .ren, .science and .party all saw DUM decline by six figures. Another 27 gTLDs saw declines of over 10,000 names.
Of the portfolio registries, Famous Four Media, Uniregistry and Afilias saw the steepest falls, each churning through hundreds of thousands of domains.
FFM strings including .science, .party and .date, which are regularly offered for under $0.50 and have terrible renewal rates, were among the biggest losers.
For Afilias, its .red, .blue and .pink combined saw volumes plummet by over 300,000. Its Korean-surname-themed .kim lost 90,000 names over the year.
Much of Uniregistry’s decline, I believe, is due to the expiration of thousands of domains that were essentially registry-owned.
Here’s a list of the top 40 biggest losers.
[table id=48 /]
At the opposite end of the table, the biggest gainers over the 12-month period were .xyz, .loan, .top, .online, .men, .tech, .kiwi, .club, .site and .bid.
Those 10 TLDs all saw volumes increase by over 100,000 names.
But that’s not necessarily hugely encouraging news, for various reasons.
We already know that .xyz is set to lose millions of names over its next couple of monthly registry reports.
One could guess that the peaks in Famous Four strings .bid, .loan and .men are likely to be matched by troughs before long.
.kiwi appears to be on the list due to its waiving the fees on about 200,000 domains, under a deal with a registrar last year.
.club recently said that it only expects to get 10% to 15% renewals on about 700,000 of its million total names.
Finally, .top is widely thought of as the TLD of choice for throwaway spam domains and has already lost a couple million names since June.
Here’s the top 30 gainers from my list:
[table id=49 /]
For the survey, I selected only new gTLDs from the 2012 round that had general availability dates in 2015 or earlier. I excluded any gTLD with Specifications 9 or 13, which act as a dot-brand flag, in their ICANN contract.
The 436 resulting TLDs include both wide-open, commercially available namespaces such as .link and .xyz, and the more restricted zones such as .bank and .law.

Will ICANN punt on .amazon again?

Amazon is piling pressure onto ICANN to finally approve its five-year-old gTLD applications for .amazon, but it seems to me the e-commerce giant will have a while to wait yet.
The company sent a letter to ICANN leadership this week calling on it to act quickly on the July ruling of an Independent Review Process panel that found ICANN had breached its own bylaws when it rejected the .amazon and and Chinese and Japanese transliterations.
Amazon’s letter said:

Such action is necessary because there is no sovereign right under international or national law to the name “Amazon,” because there are no well-founded and substantiated public policy reasons to block our Applications, because we are committed to using the TLDs in a respectful manner, and because the Board should respect the IRP accountability mechanism.

ICANN had denied the three applications based on nothing more than the consensus advice of its Governmental Advisory Committee, which had been swayed by the arguments of primarily Brazil and Peru that there were public policy reasons to keep the gTLD available for possible future use by its own peoples.
The string “Amazon”, among its many uses, is of course the name of a river and a rain forest that covers much of the South American continent.
But the IRP panel decided that the ICANN board should have at least required the GAC to explain its public policy arguments, rather than just accepting its advice as a mandate from on-high.
Global Domains Division chief Akram Atallah had testified before the panel that consensus GAC advice sets a bar “too high for the Board to say no.”
But the governmental objections “do not appear to be based on well-founded public policy concerns that justify the denial of the applications” the IRP panelists wrote.
The panel, in a 2-to-1 ruling, instructed ICANN to reopen Amazon’s applications.
Since the July ruling, ICANN’s board has not discussed how to proceed, but it seems likely that the matter will come up at its Montevideo, Uruguay retreat later this month.
No agenda for this meeting has yet been published, but there will be an unprecedented public webcast of the full formal board meeting, September 23.
The Amazon letter specifically asks the ICANN board of directors to not refer the .amazon matter back to the GAC for further advice, but I think that’s probably the most likely outcome.
I say this largely because while ICANN’s bylaws specifically allow it to reject GAC advice, it has cravenly avoided such a confrontation for most of its history.
It has on occasion even willfully misinterpreted GAC advice in order to appear that it has accepted it when it has not.
The GAC, compliantly, regularly provides pieces of advice that its leaders have acknowledged are deliberately vague and open to interpretation (for a reason best known to the politicians themselves).
It seems to me the most likely next step in the .amazon case is for the board to ask the GAC to reaffirm or reconsider its objection, giving the committee the chance to save face — and avoid a lengthy mediation process — by providing the board with something less than a consensus objection.
If ICANN were to do this, my feeling is that the GAC at large would probably be minded to stick to its guns.
But it only takes one government to voice opposition to advice for it to lose its “consensus” status, making it politically much easier for ICANN to ignore.
Hypothetically, the US government could return to its somewhat protectionist pre-2014 position of blocking consensus on .amazon, but that might risk fanning the flames of anti-US sentiment.
While the US no longer has its unique role in overseeing ICANN’s IANA function, it still acts as the jurisdictional overlord for the legal organization, which some other governments still hate.
A less confrontational approach might be to abstain and to allow friendly third-party governments to roadblock consensus, perhaps by emphasizing the importance of ICANN being seen to accountable in the post-transition world.
Anyway, this is just my gut premonition on how this could play out, based on the track records of ICANN and the GAC.
If ICANN can be relied on for anything, it’s to never make a decision on something today if it can be put off until tomorrow.

XYZ slashes $10 million a year from premium stash

XYZ.com has slashed the asking price of a few thousand “premium” .xyz domain names, in some cases by many thousands of dollars.
Overall, it looks like the company has dropped prices by a total of $10.8 million.
At the top end of its reserved list, several single and double-character domains previously priced a $55,000 per year have been reduced to $13,000 per year.
At the lower end, domains previously priced at around $1,300 are now around $300.
Those are the recommended retail prices. Some registrars are offering them with a substantial mark-up.
The reductions affect 2,700 of the domains on XYZ’s premium list, which runs to about 3,075 names in total.
Whereas the previous hypothetical value of the full list was $15.3 million a year, it’s now at $4.4 million a year.
Of course, they’re not worth anything unless somebody is willing to pay the price, and the domains still seem to have end-user price tags on them.
Premium renewal fees have so far proved unpopular in the domain investing community due to the large carrying cost.
XYZ’s full list can be obtained here.

.CLUB nears profitability, talks renewals and “trial” domains

.CLUB Domains is nearing profitability and poised to become a “growth engine”, despite the view that most of its current domains are not expected to renew, according to its CEO.
Colin Campbell told DI today that the company made $6.7 million in revenue last year, and is “very close” to breaking even.
The company reached one million domains under management milestone in June, but Campbell freely admits that the majority of its current domains are unlikely to renew.
Almost 700,000 of these domains are what .CLUB considers “trial accounts”, he said. These are domains that typically sold for under a dollar — .club has been seen for sale as low as $0.88 — to speculators.
The registry usually sees a 10% to 15% renewal rate on these domains, he said.
Of the remaining 300,000 “solid, regular registrations”, Campbell said he sees first-year renewals in the 68% to 70% range and subsequent years at 80% to 90%.
The company typically only discounts on its first-year registrations, so renewal rates are a much better indicator of performance.
He said .club has around 120,000 web sites (not including parked domains), some of which are showcased on its web site.
With this in mind, renewals are at the forefront of Campbell’s mind. He said a key performance indicator .CLUB uses is “average cost of acquisition per renewed domain”, which the company tracks on a per-registrar basis.
The company invested $3.3 million in marketing in 2016, he said. That does not include rebates to registrars participating in volume programs, but it does take into account acquiring prominent shelf space on key registrars, he said.
“We’re very close to break-even and we’re still going to be able to invest multi-million dollars in ad campaigns and marketing,” he said.
“We’re going to have a company that’s breaking even and is still going to be a growth engine,” he said. “We’re going to be able to sustain a path of growth. I don’t know too many TLDs who could say that. Of course, if you reduce your expenses down to nothing you can make a profit, but can you also be a growth engine?”
“That’s where I feel like a TLD needs to get to, to be a sustainable long-term presence in the market, like a .org or .net or .co,” he said.
Despite the narrowing losses and starkly higher volumes, the $6.7 million in 2016 revenue is a lower than the $7 million in 2015 revenue Campbell told Domain Name Wire about a year ago.
Campbell said today that the reason for the dip is that late 2015 saw many gTLDs (old and new, even including .com) benefit from a bump from the Chinese market. .CLUB’s top line was particularly exposed by some premium sales it made to Chinese investors during that growth spike.
Premium sales have also been performing well in 2017, Campbell said, driven by the financing options and broker program introduced in January.
.CLUB announced first-quarter premium sales totaling $505,000 and $2.5 million in Q2.

No $17 million rebate for struggling new gTLDs

ICANN has turned down a request for about $17 million to be refunded to under-performing new gTLD registries.
The organization cannot spare the cash from its $96 million new gTLD program war chest because it does not yet know how much it will need to spend in future, Global Domains Division president Akram Atallah told registries this week.
The Registries Stakeholder Group made the request for fee relief back in March, arguing that the $25,000 per-TLD fixed annual fee each registry must pay amounts to an unfair “burden” that has “hampered their success and put them at a competitive disadvantage”.
The RySG proposed that this $6,250 per quarter fee should be reduced by $4,687.50 per quarter for a year, a 75% reduction, at a cost to ICANN of $16.87 million.
The money, they said, should be drawn from the $96.1 million in new gTLD application fees that were still unspent at the time.
The new gTLD program charged each applicant $185,000 per application. About third of the fee was to cover unforeseen events, and is often sniggeringly referred to as its legal defense fund.
Because the program was meant to work only on a cost-recovery basis, there are question marks hanging over what ICANN should ultimately do with whatever cash is left over.
(It should be noted that this cash is separate from and does not include the quarter-billion dollars ICANN has squirreled away from its new gTLD last-resort auctions).
Now that the vast majority of the 2012 round’s 1,930 applications have been fully processed, it must have seemed like a good time for the RySG to ask for some cashback, but ICANN has declined.
Atallah said in a August 29 letter (pdf) to the group that ICANN has had to spent lots of its program reserve on unanticipated projects such as name collisions, universal acceptance, the EBERO program and the Trademark Clearinghouse. He wrote:

We do not yet know how much of the New gTLD Program remaining funds will be required to address future unanticipated expenses, and by when. As such, at this time, ICANN is not in a position to commit to the dispensation of any potential remaining funds from the New gTLD Program applications fees.

It seems for now the hundreds of new gTLDs with far fewer than 10,000 registrations in their zones are going to keep having to fork over $25,000 a year for the privilege.

GoDaddy’s reason for dumping Uniregistry doesn’t make a lot of sense

GoDaddy, as you may have read, has again decided to dump Uniregistry’s portfolio of TLDs, following wholesale price increases.
But its explanation for the move — trying to provide its customers with a “great product experience” — doesn’t seem to tally with the way it has gone about implementing the change.
The company confirmed this week that it will no longer offer new registrations in Uniregistry’s stable of new gTLDs, but will continue to support existing customers.
The registrar’s EVP of domains, Mike McLaughlin, reportedly explained the move like this:

GoDaddy strives to provide its customers with great product experiences wherever possible. After careful consideration, we decided to stop offering new Uniregistry domain names for sale because their pricing changes caused frustration and uncertainty with our customers.

But the way GoDaddy has gone about this looks like it is set to provide anything other than a great product experience.
For starters, existing registrants of Uniregistry names will find their registrations migrated over to the wholesale registrar Hexonet, for which GoDaddy will act as reseller.
They’ll still be able to manage their names via their GoDaddy control panels, but technically GoDaddy will no longer be the registrar.
This could well add friction to the customer support process, as well as meaning Hexonet will now show up in Whois as the sponsoring registrar.
Accompanying this move is the unexplained removal of Whois privacy services for all affected domains. Registrants will get a refund for their privacy service and will have the opportunity to switch registrars to one that will support privacy.
For those that remain, suddenly their personally identifiable information will become publicly available. This could lead to an increase in complaints and support calls as registrants realize what has happened.
In terms of price, existing registrants will presumably still be affected by Uniregistry’s increases to the same extent as they were previously. Again, their customer experience has not changed.
Overall, the explanation doesn’t make a heck of a lot of sense to me. I put the above points to GoDaddy and VP of domains Rich Merdinger responded, via a company spokesperson:

After we made the decision to stop supporting Uniregistry domain names, we worked to provide the best possible experience we could to our customers. We wanted them to have a transparent experience. They will log in to the same GoDaddy account and service the domain names the same way they always have. Because of the transfer of the name to a different registrar, privacy had to be removed. While this impacts a small subset of these customers, we have done everything to make this transition as smooth as possible.

It’s true that GoDaddy isn’t a big seller of Uniregistry names. It’s one of Uniregistry’s smaller channel partners and the number of Uniregistry names it’s sold — measured in the thousands — is a drop in the ocean of the over 55 million gTLD names it currently has under management.
The two companies are also competitors, it probably should be noted.
But while Uniregistry’s registrar seems to be have been well-received by customers, and its domain volume has grown rapidly in the last three years, it still only had about 1.5 million domains under management at the last count; hardly an existential threat to the Scottsdale behemoth.
It should also be noted that GoDaddy is not the only registrar to distance itself from Uniregistry.
NameCheap also recently discontinued support for the TLDs that are experiencing the biggest price increases. Tucows announced a similar move in May.
GoDaddy had already said it would drop Uniregistry once before, but changed its mind, before changing it back again.

Google shifts 400,000 .site domains

Google has given away what is believed to be roughly 400,000 subdomains in Radix’s .site gTLD as part of a small business web site service.
Since its launch a couple of months ago, the Google My Business web site builder offering has been offering small businesses a free one-page site with a free third-level domain under business.site.
Google My Business also offers users the ability to upgrade to a paid-for second-level domain via its Google Domains in-house registrar.
Google the search engine indexes 403,000 business.site pages currently. Because each subdomain is limited to a single page, it is possible that the number of subdomains is not too far behind that number, Radix believes.
This means that business.site is likely almost as large as the .site gTLD itself, which currently has about 450,000 names in its zone file.
Given the rapid growth rate, it seems likely the subdomain will overtake the TLD in a matter of weeks.
According to Radix, business.site was purchased off of its registry reserved premium list. The sale price has not been disclosed.
It’s good publicity for the TLD, and merely the latest endorsement by Google of the new gTLD concept.
As well as being the registry for many new gTLDs, Google parent Alphabet uses a .xyz domain and its registrar uses a .google domain.