M+M turns profit on the back of gTLD auctions

Minds + Machines posted an operating profit of almost £3 million ($4.9 million) for the first half of the year, almost entirely driven by the proceeds of losing new gTLD auctions.
The registry record a profit to June 30 of £2.9 million on revenue of $68,000.
The “profit on gTLD auctions” line item that permitted that seemingly impossible profit number was £7.1 million ($11.6 million), based on M+M losing eight out of 12 private auctions.
The company had £22 million ($36 million) in cash and other current assets on its balance sheet at the end of the period.
None of M+M’s big TLDs had launched in the first half, hence the low revenue. Since the half ended, .london has proven successful and several more new gTLDs wholly or partially owned by M+M have also launched.
In his statement to the market, chair Fred Krueger said:

A key variable in our financial position is the dynamic of private auctions, which we have embraced, and which has worked tremendously to our advantage. We believe that our current still contested strings represent significant assets which we have the potential to monetize either to further our existing new TLDs or to purchase additional new TLDs at auction.

He also reiterated CEO Antony Van Couvering’s call for a new metric to track gTLD registry health that is based on revenue-per-domain rather than simple volumes.
His outlook for new gTLDs was arguably less cautious than his counterpart at CentralNic, which reported its half-year numbers yesterday and talked of demand “falling short of industry expectations”.
Krueger said:

Name registration data available to-date indicates a strong opening for a variety of new products/domains, and also shows that we are still very early in the adoption curve for new TLDs. We expect that the growth of almost all new TLDs will likely follow an “S curve”, as it historically has for newly launched TLDs, rather than a straight line.

He also reconfirmed that M+M plans to aggressively pursue its new integrated registrar business as a means to drive growth in its gTLDs, rather than simply relying on the channel.

.ooo sales targets are batshit crazy

New gTLD registry and e-commerce network Infibeam, which is taking its .ooo TLD to sunrise today, has been bandying around some truly wacky registration predictions in the Indian press today.
The company’s founder told one local paper, the The Hindu’s BusinessLine, that .ooo will have volumes that dwarf .xyz and a literally impossible number of sunrise registrations.
I’m not going to link to the article itself because the BusinessLine website, probably via an embedded ad, tried to download malware onto my machine. The headline is “Infibeam to offer ‘.ooo’ for ‘.com-savvy’ netizens” if you want to Google it.
Here’s an extract, however, which quotes Infibeam founder Vishal Mehta:

The company is targeting 35,000-40,000 trademark registered companies along with several SMEs.
“The new GTLD is the first of a kind initiative by any e-commerce company. Over the next 6-12 months we expect to get about 1-2 million domain registrations under .ooo,” Mehta told BusinessLine.

This is nuts for at least two reasons.
First, Infibeam seems to be expecting 35,000 to 40,000 sunrise registrations.
That’s impossible.
The .ooo sunrise period starts today, when there’s just shy of 33,000 trademarks listed in the Trademark Clearinghouse.
A TMCH listing is of course required to buy a name at sunrise, so even if every mark in the TMCH converted to a .ooo name — which they won’t — the TLD still couldn’t hit the bottom end of its projection.
In reality, .ooo will be lucky to hit 500 sunrise registrations, just like every other gTLD this year.
Second, the only way Infibeam is going to get one to two million registered domains in six to 12 months is if the company not only gives them away for free, but actually forces them upon registrants without their consent.
The registry with the most number of registrations to date is .xyz, which has about 517,000 domains in its zone file today. It’s managed that feat in three and a half months largely by giving the names away for free to its registrars’ customers whether they want them or not.
Conceivably, Infibeam could do the same with .ooo, but that wouldn’t be especially helpful to its application commitment to make the gTLD “synonymous with trust and consumer choice”.
Indeed, its application talks exclusively about offering .ooo names to existing Infibeam customers.
Could the company leverage its BuildaBazaar e-commerce network to create quickly a substantial base of registrations?
It web site talks of a “billion dreams” and a “billion stores” and its .ooo gTLD application states: “Our goal is nothing less than providing a billion stores for a billion people.”
According to the application, Infibeam will try to persuade its BuildaBazaar customers to upgrade to a premium package that includes a .ooo domain name for their stores.
All Infibeam would need to do would be to convert 0.1% of its billion-strong BuildaBazaar customer base to .ooo domain names and it could hit one million registrations almost overnight.
That would assume that BuildaBazaar has a billion stores, of course. It doesn’t. It has 20,000 stores.
So where are the “1-2 million domain registrations” over the “next 6-12 months” going to come from?
Beats me.
I hope for Mehta’s sake that he was misquoted because otherwise I suspect he’s going to be very disappointed very quickly.

Multiple live gTLDs will be auctioned in October

Exactly 11 months after the first new gTLDs were delegated to the DNS root, DI has learned that a batch of live gTLDs are heading to auction for the first time.
There’s now officially an aftermarket for top-level domains.
“Multiple” delegated 2012-round new gTLDs will be auctioned off next month, with the exact date yet to be finalized, according to a reliable source.
The venue will be Applicant Auction, which has been helping applicants resolve gTLD contention sets via private auction for the last year.
The auction is understood to be invitation-only and the identities of the gTLDs up for grabs, and their associated registries, are a closely-guarded secret.
What conclusions we can come to will rather depend on which gTLDs are being sold.
If they’re gTLDs that are already in general availability, and perhaps have suffered worse-than-expected sales, it probably wouldn’t look very good for the new gTLD program.
But if they’re pre-launch strings belonging to portfolio applicants that have always looked like obvious investment vehicles, the optics might not be as damaging.
We’ll have to wait and see. If the auctions are successful, at some point over the next couple of months we can expect to see one or more new gTLDs change hands.
It won’t be the first time a gTLD has been bought — successful applicants from earlier rounds have been acquired by larger competitors — but it will be the first time a delegated new gTLD has been auctioned off when it’s still basically an unproven asset rather than a full-blown business.
It could be the first example of “domaining” with TLDs.
In this round, NCC Group bought .trust — an uncontested application with no ICANN contract — from Deutshe Post in February, while Rightside has acquired some TLDs from Donuts under a pre-existing deal.

Verisign plans TLD standards group

Verisign is trying to form a new industry standards-setting association for domain name registries and registrars.
To be called the Registration Operations Association^TM (yes, according to its web site it is apparently already trademarked), Verisign wants potential members of the group to meet in October to figure out whether such an association is needed and what its remit would be.
But the Domain Name Association apparently has other ideas, suggesting in a recent blog post that the DNA would be the best place for these kinds of technical discussions to take place.
In the second of a series of three blog posts revealing the ROA plan, Verisign senior director Scott Hollenbeck said:

The primary purpose of an association would be to facilitate communication and technical coordination among implementers and operators of the EPP protocol and its current extensions to address interoperability and efficiency obstacles.

EPP is the Extensible Provisioning Protocol used by registrars to transact with all gTLD and many ccTLD registries. It’s an IETF standard written by Hollenbeck over a decade ago.
One of the problems with it is that it is “extensible” by design, so every time a registry extends it to deal with a peculiarity of a particular TLD, partner registrars have to code new connectors.
In a world of hundreds of new gTLDs, that becomes burdensome, Hollenbeck explained in his posts.
An industry association such as the formative ROA could help registries with common requirements standardize on a single EPP extension, streamlining interoperability.
That would be good for new gTLDs.
It’s no secret that many registrars are struggling to keep up with new gTLD launches while providing a good customer experience, as Andrew Allemann pointed out last week.
The need for cooperation seems plain; the question now is what is the correct forum.
While Verisign is pushing for a new group, the DNA reckons the task could be best-performed under its own umbrella.
Executive director Kurt Pritz blogged:

Given its multi-functional and global diversity, the DNA will be an effective place to coordinate discussion of these issues and to involve broader domain name industry involvement.

Verisign isn’t a DNA member. In fact, it appears to be the only significant back-end registry provider in the western world not to have purchased a membership.
But Pritz said in his post that technical discussions would not be limited to DNA members only — anyone would be able to participate without coughing up the $5,000 to $50,000 a year the group charges:

Recognizing that industry-wide issues are… well … industry wide, the DNA Board determined that this work must include those inside and outside the DNA, welcoming all domain name industry members. Scott and others from Verisign and other firms are invited regardless of whether they join the DNA.

So is the industry going to have to deal with two rival standards-setting groups?
In the many years I was a general Silicon Valley tech reporter, I must have written scores of articles about new technologies spurring the creation of competing “standards” organizations.
Usually, this involved pitting an incumbent monopolist such as Microsoft against a coalition of smaller rivals.
It makes for great headlines, but I’m not sure the domain name industry is big enough to support or require multiple groups tackling the same problems.
With resource-strapped registries and registrars already struggling to make new gTLDs work in any meaningful way, I doubt their geeks would appreciate duplicating their efforts.
I don’t know whether the DNA or ROA would be the best venue for the work, but I strongly suspect the work itself, which almost certainly needs to be done, only needs to be done once.
Verisign wants interested parties to meet in Los Angeles on October 16, just as the ICANN meeting there concludes. The meeting may also be webcast for those unable to attend in person.

Accent wins .tickets auction after $1.6m CentralNic investment

Accent Media, one of four applicants for .tickets, has won the new gTLD at auction after receiving a $1.62 million investment from CentralNic.
As part of the deal, Accent has dumped Afilias as its back-end provider and will switch to CentralNic instead.
Competing applicants Donuts, Famous Four Media, Shubert Internet and Tickets TLD are now expected to pull their applications, though none appear to have had their withdrawals accepted by ICANN yet.
It’s not clear how much .tickets sold for.
CentralNic acquired a 12% stake in Accent in exchange for its investment. Both companies are based in the UK.
The deal is believed to be unrelated to the $1.5 million investment in a gTLD applicant that CentralNic announced — with the proceeds earmarked for auction — last week.
Accent has applied for a quite restricted TLD, with anti-fraud measures at its heart. Its authenticated registration process is described as being a bit like the process of buying an SSL certificate.
CentralNic CEO Ben Crawford said in a statement:

The “.tickets” Top-Level Domain will be a compelling new tool to assist consumers to easily identify legitimate and trusted ticket sales sites, as well as empowering venues, entertainers and sports organizations to improve their use of the internet for enabling fans to purchase tickets. This investment realizes our strategy of investing in Top-Level Domain applicants as well as operating as a business partner to their operators.

Which made more money — .website, .press or .host?

Radix Registry launched its first three new gTLDs yesterday, and the first day’s numbers make an interesting case study in how difficult it can be to judge the health of a TLD.
Based on zone file numbers, .website was the clear winner. It had 6,340 names in its zone at the end of the day, compared to .host’s 778 and .press’s 801.
There’s clearly more demand for .website names right now.
But which made the most money? That’s actually a lot harder to figure out.
To make those calculations accurately, you’d need to know a) Radix’s base registry fee, b) the promotional discounts it applied for the launch c) which premium names sold and d) for how much.
None of that information is publicly available.
If we were to use Go Daddy’s base retail pricing as a proxy guide, .host was hypothetically the biggest money-spinner yesterday. At $129.99 a year, it would have made $101,132.
Because .website only costs $14.99 at Go Daddy, it would have only made $95,037, even though it sold thousands more names.
But Radix offered registrars what appears to be steep discounts for the launch. Go Daddy marked down its .host names from $129.99 to $49.99. That would make revenue of $38,892, less than half of .website.
With the discounts in mind, .host didn’t have as good a day from a cash-flow perspective as .website, but it arguably looks healthier from a long-term revenue perspective.
That’s all based on the snapshot of today’s zone files and an obviously incorrect assumption that Go Daddy sold all the names, of course.
Complicating matters further are the premium names.
Radix has priced a lot of its names with premium renewal fees and Radix business head Sandeep Ramchandani said that the company sold five five-figure premium names across all three gTLDs.
Given the relatively small amount of money we’re talking about, those five sales would have significantly impacted the three new gTLD’s relative revenue.

.website gets 6,500 regs in first four hours

The new gTLD .website got over 6,500 registrations in the first four hours of general availability, according to Radix Registry.
The TLD has been characterized as the first exciting, properly generic English-language new gTLD to launch.
With that in mind, one wonders whether 6,500 is a great start.
Bear in mind that .website has commodity .com pricing ($14.99 or thereabouts retail) and that Radix offered its registrars a promotional discount for the launch — 6,500 names does not equal a lot of money.
But it’s still early days (hours), and we don’t know how many of the registered names carry premium prices.
Radix’s premium names renew annually at the premium prices, as we’ve seen previously with gTLDs from the likes of Donuts, Uniregistry and Minds + Machines.
.website went to GA at 1600 UTC today, having been delayed 24 hours by a pricing glitch.
Radix has been conducting a sweepstakes on Twitter all day to guess the number of day-one registrations in .website. The prize is a Go Pro camera.

Guess the no. of regs .website will do on Day 1 of GA, add #truegeneric and tag @RadixRegistry to participate in the #contest. #domaining

— Radix (@RadixRegistry) September 18, 2014

Based on nothing more than gut instinct, I went for 9,888, thinking I was probably erring slightly on the low side.

CentralNic invests $1.5m in mystery gTLD applicant

Registry back-end provider CentralNic has stumped up $1.5 million to back a new gTLD applicant in a forthcoming private auction.
CentralNic CEO Ben Crawford declined to identify the beneficiary.
The company has also not disclosed what stake in the target company it will obtain if it wins the auction.
Here’s the entirety of the statement the company released to the market this afternoon:

CentralNic plc (AIM:CNIC), the internet platform business which derives revenues from the global sale of domain names, today announces that the Group intends to invest US$1.5 million in a Company which is in a contention set to acquire a new generic Top-Level Domain (“gTLD”). The funds will be placed into an escrow account, pending the resolution of the contention set, with the winning applicant expected to be resolved by a private auction within the next two weeks. The investment is contingent upon the Applicant Company successfully obtaining the rights to the gTLD by winning the auction. If the company is unsuccessful, the funds will be returned in full to CentralNic by the escrow agent.

Assuming CentralNic is investing in an existing registry services client, possible beneficiaries include Top Level Design, Fegistry, Merchant Law Group and XYZ.com.
These clients have more than 20 applications in contention right now, but not all of them could plausibly head to private auction soon.
Some have been blocked, some are in contention sets with applicants that do not participate in private auctions, and some strings have been applied for by more than one CentralNic client.
With those criteria in mind, one could possibly narrow down the target string to: .auto, .cafe, .chat, .design, .forum, .gay, .golf, .law, .news, .now, .realty, .school, .style or .sucks.

Donuts racks up 8,000 sales with three gTLD launches

Donuts’ sold another 8,000 domains on the first day of base-price general availability of its three latest gTLDs — .church, .guide and .life.
.church was the strongest performer of the three, with 3,409 new names registered. Its total is now 4,044.
.guide added to 2,895 to total 3,386, while .life added 1,783 to wind up at 2,106.
These are not exceptional numbers for new gTLD launches but they’re pretty much par for the course with niche TLDs nowadays.
All three gTLDs were won by Donuts at auction against other applicants over the last 12 months.

Radix delay blamed on promo pricing

Radix Registry’s first three new gTLD launches have been delayed for 24 hours after registrars experienced problems with promotional pricing.
.website, .host and .press will now go to general availability at 1600 UTC today.
Radix business head Sandeep Ramchandani said that some registrars were not expecting the registry to quote discounted fees at point of purchase; they were expecting a rebate at a later date instead.
This caused problems during pre-launch testing, he said, which led to the decision to delay.
The problem was resolved not too long after yesterday’s 1600 launch deadline, but it was decided to hold off on GA for a full 24 hours.