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#2 in 2017: GoDaddy and Uniregistry fight over new TLD prices

This is the ninth in a series covering the top stories on DNW in 2017, as ranked by pageviews.

The #4 story in 2017 was about Frank Schilling’s capitulation on his forecast for new top level domains and his decision to drastically increase prices on many of his TLDs.

I’ve decided to separate the ensuing tiff between Schilling’s Uniregistry and GoDaddy into a separate item because of its importance, and because it represents an example of the often challenging interplay between registries and their registrar channel.

Following Uniregistry’s announcement of a price hike, GoDaddy temporarily pulled all of Uniregistry’s domains from its shelves. GoDaddy GM of Domains Mike McLaughlin said, “…The dramatic price hike Uniregistry announced left us no choice…”

Facing additional registrar backlash, Uniregistry backtracked a bit and decided to grandfather existing domain registrations at pre-hike prices. Uniregistry left it up to the registrars to handle the technical integration of the grandfathering.

GoDaddy later added Uniregistry domains back to its shelves but with very high markups. Then, in August, the company decided to pull the plug on Uniregistry indefinitely. In addition to halting new registrations and transfers, GoDaddy partnered with Hexonet to handle the backend for existing Uniregistry domain names.

GoDaddy was late to sign on to carry Uniregistry’s domains in the first place, so it wasn’t one of the top registrars for Uniregistry domains. Still, losing the world’s largest domain registrar is bad news for any registry operator.

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  1. Christopher Wilkinson (CW) says

    This issue goes back to the false ‘Vertical Integration’ decisions in the 2012 Round. Registrars should never have been allowed to own Registries. CW

  2. John McCormac says

    It probably dates back to the whole .EU ccTLD fiasco and how badly that was conceived, advised, legislated for, and managed. Eurid’s excuses that the whole Sunrise and Landrush phases were not gamed were quite laughable but they effectively killed off the .EU as an alternative to .COM in the Irish and UK markets. Market confidence in the .EU ccTLD effectively collapsed and it has been running on brand protection registrations ever since. Cybersquatting was rife and the fiasco effectively kickstarted the rise of some of the European ccTLDs because the consumers had more confidence in these ccTLDs than the .EU ccTLD. But many of the people applying for strings in the 2012 round saw what happened, even if ICANN and its advisors did not. There is a percentage of high value generic domain names in each new TLD that tend to be registered across all major TLDs. The people who targeted the .EU ccTLD Sunrise and Landrush knew this but the European Commission, its advisors and Eurid seemed quite clueless.

    The .MOBI and .ASIA and the repurposed .CO ccTLD built on this idea with the registries effectively reserving contended domain names that would have otherwise have gone to market at the standard registration fee. They subsequently auctioned or sold off some of these high value domain names. While there is criticism of this strategy, it does provide a revenue stream for struggling new gTLDs. It is also a double edged sword because in reserving these HVDs, a new registry will suppress the new registrations spike from the natural speculative landrush that happens in the first six months of a newly launched TLD’s operation.

    The tied registrars (or Vertical Integration) model was the natural progression of this model and the newer generation of registrars were more attuned to the domain name business than many of the people in ICANN. But what really screwed things up for many of the new gTLD registries wasn’t that the market changed and nobody in ICANN noticed.

    Domain Tasting was rife between 2005 and 2010. It was effectively taking most of the valuable domain names from each day’s drop and making sure that they never made their way back to market as the ICANN Domain Name Life Cycle model envisaged. The immediate result of Domain Tasting was the creation of an artificial scarcity in “good” domain names. It was against this background that the drive towards the latest round of new gTLDs gathered momentum. But in 2010, ICANN was shamed into bringing in measures to limit Domain Tasting with a “restocking fee”. The effect on domain name transactions was massive in that it immediately killed Domain Tasting as a no-fee enterprise and the dam of withheld tasted domain names shattered. And so did the prospects for some new gTLDs. But rather than adapt to the changed market, ICANN and its “advisors” were locked into a a clueless Kamikaze run to get as many new gTLDs out the door as quickly as possible. (That was another piece of utter stupidity by ICANN.)

    What Frank Schilling did was the right thing and took guts. It was not well handled but the Domain Name Business is more than just Domaining. But Godaddy may have experienced some negative feedback from its registrants over the price hikes.

    It is necessary to grow a TLD organically so that development and usage occurs in the newly launched TLD. It is these developed websites that give a TLD its value. A higher registration fee actually gives a registry some breathing room compared to a low registration fee TLD. This is because there’s a pain threshold with higher registration fee TLDs. The registrant is less likely to drop a higher priced domain name than a low cost domain name. This means that the renewal rate for a high registration fee TLD is going to be higher than that of a low cost TLD. The downside is that the registration volume in a higher cost TLD is always lower than that of a cheap TLD.

    Losing Godaddy was a major blow to Uniregistry as it is the primary US registrar. However, it is not the main player outside the USA. The key markets for high price TLDs are the USA, Canada, the EU (and the UK), Australia and New Zealand. These markets tend to have higher renewal rates and higher web usage rates than other developing markets.

  3. John McCormac says

    “But what really screwed things up for many of the new gTLD registries wasn’t that the market changed and nobody in ICANN noticed. ” Should have been “was that the market changed and nobody in ICANN noticed.”

  4. Jeff Schneider says

    Hello Andrew,

    Google/Alphabet – ( Minus ) – (.COM Equimoditty Platform Assets ) = (TotalFailure ) JAS

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master

  5. Jeff Schneider says

    Hello Andrew,
    Totally unwise to block 10s of thousands of Domainers primary source of information coming from US. JAS

    Google/Alphabet – ( Minus ) – (.COM Equimoditty Platform Assets ) = (Total Failure ) JAS

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master )http://www.usebiz.com/

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