Domain Name Wire

Domain Name Wire

Displaying posts under "Domain Services"

  • Why Neustar paid $109 million for .Co and what it means for new TLDs

    1. BY - Mar 21, 2014
    2. Domain Services
    3. 17 Comments

    While the circumstances behind Neustar’s acquisition of .CO Internet were unique, it bodes well for operators of new TLDs.

    NeustarNeustar announced yesterday that it is paying $109 million to acquire .CO Internet, operator of the .co domain name.

    It’s a big price tag, and here’s how it breaks down:

    * $68 per currently registered .Co domain

    * 5x current annual revenue run rate

    * 6.5x current annual revenue run rate when you account for Neustar losing $4 million a year it was getting paid as the backend registry for .Co.

    These are some healthy numbers that are good news for new TLD applicants when it comes to valuation. Let’s dig in some more to figure out what this may mean for TLD owners.

    First, let’s consider the earnings multiple. We don’t know how much .Co was netting each year, but I do know they spend a lot of money on marketing. A lot. Super Bowl ads, multiple conference sponsorships per week, marketing deals with registrars. It’s extensive, although probably a smaller percentage of revenue than it was early on.

    Somewhat unique to .Co, which also needs to be factored in, is that it has to pay the Colombian government for each registration. The fees are more than what a registry pays ICANN, but as a ccTLD .co has more flexibility than new TLDs.

    Also, that $4 million revenue reduction Neustar will face buy purchasing its customer is also a $4 million reduction in the acquired company’s expenses. It nets out.

    Neustar can look at this two ways. The current earnings multiple might be really high, but the company might be able to harvest the revenue stream by dialing back.

    This is a relevant point for smaller registries. If you have three TLDs with a total of 75,000 registrations with a wholesale of $15 each, three staff members, and spend $500,000 on marketing each year, you’re not making much money. But another registry can acquire you and strip out the costs through economies of scale and suddenly you’re worth more.

    It’s also worth pondering for a moment how existing “portfolio” registries are valued. Minds + Machines Group Limited (MMX) (formerly known as Top Level Domain Holdings) has a market cap of about $200 million. It has yet to launch any of its TLDs. It’s all on the promise of future registrations.

    Next, let’s take a look at the specifics of this acquisition and why it might be unique compared to selling a registry a few years down the road.

    Neustar is in a pretty desperate situation to grow revenue right now. It is facing the prospect of losing a contract that makes up half (yes, half) of its revenue.

    So it needs to acquire revenue producing companies now. That may be the situation in the future but we don’t know for sure.

    It definitely played in .Co’s favor in 2014. After all, there’s a very limited supply of registries to acquire. That’s going to change five years from now. There will be more supply, and that could push down valuation.

    The acquisition also brings Neustar needed marketing expertise ahead of the launch of new TLDs.

    A final thing to consider: which technical registry provider a new TLD applicant signed with may play a role in valuation and acquisition down the road. It will be easy for Neustar to integrate .Co. It’s already running the backend. I envision registries making lots of offers to their TLD operators. Working with a more acquisitive one will play in the favor of certain TLD owners.

    Any way you spin it, even if you think this was a unique circumstance, the Neustar acquisition of .Co looks like good news to new TLD applicants. Now they just need to find a way to grow their registration base in this competitive environment.

  • DomainFest is less than a month away. Here’s why I’m going.

    1. BY - Mar 05, 2014
    2. Domain Services
    3. 2 Comments

    DomainSponsor’s annual domain name conference is just a few weeks away.

    DomainFestThis year’s date-shifted DomainFest conference is less than a month away, kicking off on March 31.

    I just booked my travel for the event, which is one of many domain conferences I plan to go to this year.

    With a very busy conference circuit, I’m being selective about which events I attend. Ultimately I included DomainFest as one of them for five reasons:

    1. The show has a long history of putting on a professionally run event.
    2. Given the long list of sponsors, I think the event will be well attended (even if smaller than in previous years).
    3. The agenda includes a number of sessions and speakers I’d like to see, including Akram Atallah.
    4. It’s in L.A., which is an easy (and cheap) trip for me.
    5. With everything going on in the industry as new TLDs launch, I feel like waiting for the next conference is just too long.

  • I just went 0-for-17 registering new domain names

    1. BY - Mar 03, 2014
    2. Domain Services
    3. 21 Comments

    Between name collisions, registry reserved domains, and premium pricing, the best new TLD opportunities are difficult to find.

    I think there are some opportunities for domainers to make money with new top level domain names, but they are limited.

    My thinking is that some domain names that can be obtained for under $100 with low renewal fees can be sold within 1-5 years for low $1,000s to the right buyer. It’s very risky, and with typical sell through rates I’ll be selective about what I pick up.

    You might disagree. But that’s not the point of this post, anyway.

    The point is how difficult it is to get any of these good names in new TLDs. Even when you can get them, expect to pay more than regular prices.

    This week four of Donuts’ domain names revert to non-Early Access pricing: .careers, .photos, .recipes, and .shoes. I came up with a list of what I think are 17 of the better domain names for these extensions and then set about to pre-register them…

    I failed.

    7 of the 17 are on name collision lists and 5 others are registry reserved. That leaves only 5 to go after.

    All five of the “available” domains are premium domains. Depending on which register I choose, the annual renewal fees will be $200-$400 on some of these domains.

    That’s a high carrying cost. It means the registry is basically taking the profit I might be able to make as a domain investor. It makes sense for the registry. I don’t blame them. But it also means it doesn’t make sense for me to register the domains.

    Here’s what I checked: – premium – premium – collision – premium – collision – collision – registry reserved – collision – registry reserved – registry reserved – registry reserved – premium – collision – collision – collision – registry reserved – premium

  • .CO creates a “Pop-up HQ” for SXSW 2014

    1. BY - Feb 27, 2014
    2. Domain Services
    3. 0 Comments

    .CO creates its own home on the road for SXSW Interactive.

    DotCo HQ
    .CO went small the first time it came to SXSW Interactive in Austin. It was more of a scouting trip than a marketing one. I remember catching up with the company at the W Hotel that year. .CO Internet CEO Juan Diego Calle said “Wow, this is big”.

    .CO has had a major presence at SXSW ever since then. It’s the perfect event for a company that targets startups.

    This year it’s going bigger and better with its own “pop-up HQ” right next to the W Hotel.

    The .CO HQ will be open at 317 W 3rd St March 7-9. On March 7 and 9 the headquarters will offer coffee in the morning, Torchy’s Tacos at lunch, and locally-distilled Tito’s Vodka in the afternoon for happy hour. On Saturday afternoon the .CO HQ will “go mobile” to Startup Oasis at Old School Bar & Grill.

    Each day also features panels and speakers. For example, John Battelle and Gary Vaynerchuk will hold a session at the .CO HQ Friday. .CO promises a surprise announcement during the session.

    To get in the door you need to (at minimum) join .CO’s VIP program.

    This is a smart idea for .CO. SXSW Interactive is an overwhelming event. With over 30,000 official attendees and 14 venues, sometimes you just need a place to kick your feet up, recharge your phone, and take a break.

  • The domain name conference circuit is really, really busy

    1. BY - Feb 21, 2014
    2. Domain Services
    3. 7 Comments

    Lots of competition creates a dilemma for attendees.

    The domain name conference circuit is undergoing a big shakeup in 2014 because there are a lot more options.

    A lot of the new(er) options are directly related to the rollout of new top level domain names. Money is flowing because of the rollout, and a lot of new faces in the industry are seeking to learn, meet people, and strike deals.

    The huge number of conferences means that prospective attendees will have to pick and choose. Few will go to all of them, whether it be for financial or scheduling reasons. Conferences will have to work harder than ever to attract registrants.


    In my opinion, NamesCon made the biggest impact on this year’s circuit, directly affecting other shows that attract domainers (i.e. TRAFFIC and DomainFest).

    The January show snagged close to 600 registrants, mostly made up of domainers and new TLD applicants. The timing was perfect and the low price was a huge draw.

    I assume there will be a show around the same time next year. Will there be another one later this year? That could make things even more interesting.


    DomainSponsors’ DomainFest has gone through a transition. Last year it changed its name to WebFest. And due to layoffs at, some of the people that were involved in the show in previous years weren’t around last February. Then, after last year’s conference, one of the big faces behind the conference, Aaron Kvitek, left.

    I assume that’s a big reason this year’s show was postponed, as lack of continuity makes things harder.

    It’s back on for this year under the name DomainFest, but the date has shifted to March 31. How much will the date change, relatively short notice, and the “NamesCon effect” affect attendance? Will taking place right after the ICANN meeting in Singapore also dent attendance?

    The key for DomainSponsor is not that it attract the most attendees, but that it connect with its core clients. I think it will achieve this, even if the show doesn’t attract as many people as before.


    Traffic is scheduled in Las Vegas in May and in Miami in October.

    The biggest question right now is what effect NamesCon will have on another show happening in the same city just four months later. Traffic is a much more expensive show, too.

    An elephant in the room is Rick Schwartz’s attitude toward new top level domain names. On the one hand, Rick speaks his mind, which is why some people like him. On the other hand, he’s alienated many potential sponsors and attendees of his show.

    I’m sure Rick and his business partner Howard Neu know that Rick’s writing about new TLDs means hundreds of thousands of dollars in lost attendance and sponsorships. Some attendees will like that and go just for that reason, but it will also push away many others.

    The shows are also (again) close to ICANN meetings, which might affect attendance.


    ICANN shows are also becoming a big draw for domain investors, and the locations are pretty good this year.

    A meeting in Singapore takes place in March, it goes to London in June, and then comes home to Los Angeles in October.

    ICANN shows are free. All attendees pay for is transportation, lodging, and food. They also attract over 1,000 people. Domain investors are sure to weigh these factors in their decision on which shows to attend this year.


    On top of this Momentum events has already scheduled two Digital Marketing & gTLD Strategy Congress events. These are geared to new TLD players. But other conferences are also vying for these attendees, which means attendees will have to make tough decisions.

    I was contemplating going to the early March event in New York. But I probably don’t want to do both that event and DomainFest in the same month. In my case, I also have to add SXSW to my March Calendar. Many registries will be there.

    Then there’s the new DomainsCon show, although I believe that’s targeted to yet another audience.

    The point is there are a lot of shows vying for a select audience. I’m not here to pick winners and losers in the conference business, as I truly believe that each show is right for a certain audience.

    In my case, I weigh both money and my time (primarily the latter) in choosing which conferences to attend.

    Whichever conferences you select, I hope to see you there.