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VeriSign to Pay $6M More to ICANN in FY 2010

Proposed budget includes increased contractual fee from VeriSign.

Internet Corporation For Assigned Names and Numbers (ICANN) has published its Proposed Framework for FY10 Operating Plan and Budget (pdf). ICANN’s Financial Year 2010 runs July 1, 2009 to June 30, 2010.

Despite the possibility of declining domain registrations, ICANN will get a $6 million windfall thanks to a fixed fee provision in its dotcom agreement with VeriSign (NASDAQ: VRSN). VeriSign will pay $18 M to ICANN for running the .com registry during the year, compared to $12 M in FY ’09. (VeriSign pays a variable free of 75 cents for each .net transaction.)

Because of this fixed fee, ICANN expects a 28% increase in registry related revenue for FY ’10 compared to FY ’09. It forecasts a slight decrease in registrar revenue.

ICANN expects to spend nearly $7.5 M on new gTLD implementation and delegation for the year, which is 14% lower than forecast for 2009. However, admitted delays in new gTLD implementation may push back expenses. ICANN is budgeting that it won’t be able to contribute its goal of $10M-$15M to its reserve fund in FY ’10 due to new gTLD expenses. A separate new TLD budget will be published prior to the launch of new TLDs. This budget will include the revenue and expenses anticipated from new TLDs (the $7.5 M forecast is for implementation, not execution).

If you’re wondering where the rest of your money goes, here’s a breakdown of the proposed FY ’10 budget compared to the actual expenses in FY ’07:

Personnel: $24.7M, up 79%
Travel & Meetings: $11.5M, up 85%
Professional services: $11.9M, up 102%
Administration: $6.3M, up 105%

During the same period, revenue is up 56%.

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  1. Johnny says

    don’t understand one thing: Why is ICANN going ahead with new gTLD’s when the DOC specifically stepped in and put a boot up ICANN’s rear regarding their plans for even more gTLDs. ICANN is acting like the Department of Commerce never even said a thing to them about the gTLDs.

    Another thing, why do they need more personnel, travel, professional services (what is that comprisied of?), and administration.

    What fundamental thing changed that made costs go up?

    I smell a rat…..the same one I have been smelling for a decade.

    Personnel: $24.7M, up 79%
    Travel & Meetings: $11.5M, up 85%
    Professional services: $11.9M, up 102%
    Administration: $6.3M, up 105%

    During the same period, revenue is up 56%

  2. Kevin Wilson, CFO says

    I’m not sure I agree with your point that there will be declining domain registrations – VeriSign itself put out a press release today on the health of domain registrations.

    But that aside, rather than digging into the figures at this point, it is probably most useful to stress that this budget is now out for public comment – which means that you can send in your comments on it and ICANN will review them as part of its public comment process, producing a revised version of the Operating Plan and Budget later on.

    So if you have concerns or just questions, please do use this process to have your say:

    I would also like to invite you to Mexico City to our meeting on 1-6 March where the budget will be publicly discussed and reviewed over the course of the week. Attendance is free.

    For information go to: http://mex.icann.org/

  3. Andrew Allemann says

    @ Kevin – I hope registrations don’t go down. I read VeriSign’s report today. I was basing it somewhat on the budget’s reduced registrar fee numbers, but that may be due to other factors.

    Hopefully I’ll make it to the next ICANN meeting that’s held in a safe country 🙂

  4. Johnny says

    Kevin….they will go down. Mark my words.

    Higher prices, inflation, recession/depression, folks realizing that anything else other than a .com is a waste of time.

    It’s hard enough to get folks to go to a .com, so that is why the other extensions will fail.

    Remember…..surfer traffic is finite. IF you keep spreading the traffic out then the other extensions will fail. Every time you open a new extension it marginalizes the rest of the extensions.

    ICANN should be made up of domainers. Why? Because we are the only ones who really understand domain names. I’ve been studying domains for 15 hours a day since 1995. How about you Kevin?

    This is why you guys can’t create good policies.

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