A secretive deal was the only way ISOC could get a deal done.
I’ve written a lot about how Internet Society’s (ISOC) deal to sell the .org registry to a private equity company impacts the internet’s users and non-profits. From a credibility standpoint, it’s a bad deal for ISOC.
But from a financial standpoint, it makes sense for ISOC to sell the registry.
The registry throws off cash to ISOC each year but there is risk. There’s risk that the importance of domain names changes over time. There’s risk that the base of .org domains declines.
By selling the registry and creating an endowment, ISOC secures its future. And a $1.135 billion endowment is nice security.
The way the process played out, however, means that ISOC is leaving money on the table.
I’ve heard from multiple people who would have paid more. These are people who have the capability to acquire companies for over a billion dollars. A competitive bidding process would have led to a greater windfall for ISOC.
So why was the deal done without public consultation and not put out to bid? I suspect that if people caught wind of what ISOC was up to, the blowback would have been so big that the deal would have never gone through. This was a deal that needed to be consummated in secret.
From ISOC’s perspective, $1.135 billion is enough. Getting a few hundred million dollars more at the risk of not getting anything was too great.
MoGreen says
Nailed it , this could only have been done via insiders , Abry + Donuts + Ethos , making the decisions for ISOC. Think that is why so many people are upset , it is a sweetheart insider deal for the now Private Interest Registry – PIR
Now if you think that PIR had no idea about the transaction and was just an observer , I have a bridge in Brooklyn to sell you
Samer says
Excellent, Andrew! Thank you for writing. my issue lies with uncapping org price used most nonprofits the epitome of corruption
If uncapping .org price is allowed, disband whoever allowed future uncapped .org price
Focus your energy blocking unlimited .org price increases, rather than the new owner,
$1.135 bill be damned.
Samer
Mike says
Tell TRUMP China is buying .org, and it will be kaput
Andrew Allemann says
You aren’t wrong.
MoGreen says
Or tell him Mitt Romney is behind the buying of .ORG , think that would be even more effective and true
Andrew Allemann says
Yeah, that will get him going! Even if it’s only partially true, he doesn’t require facts.
Mark Thorpe says
ISOC leaving money on the table is an understatement!
Vikram says
Establish new gtld registry agreement with no pricing restrictions
Set up Donuts to cash in on it
Move legacy tld’s to new gtld registry agreement with no pricing restrictions
Set up Ethos to cash in on it.
Self-deal, rinse, repeat.
168 says
Tweet trump !
Excellent idea!
The most efficient road to mass coverage.
Expand tariffs to China investors.
he could use a diversion right now.
Cheers
John says
This is part of what I have been saying all along.
Said it before and I’ll say it again: none of this including price caps could ever have happened under US oversight, DESPITE all the corruption we certainly have here.
The reason is that this could not have slid under the radar under US oversight, and this is the ultimate question by which none of it could ever fly:
Politically feasible, yes or no.
Not even under the current administration could this have happened, not even if they wanted to, and when it comes to being pro-elite and pro-plutocracy there is no difference between any of the last several administrations including Mr. corporatist (stop hoping for) Hope and Change.
John says
And no, it’s not “shrewd” of those doing it. You have to be nothing less than a sociopath to take advantage and go through with it. That means everyone associated with the purchase at the buyer’s end who approves is a sociopath, not a “shrewd” business person.
Andrew – one is stuck in mod. now.
Will says
What Paul Singer did to Sidney, Nebraska, Fadi Chehade and his dark PE money will do to the Internet:
“[T]he model is ruthless economic efficiency: Buy a distressed company, outsource the jobs, liquidate the valuable assets, fire middle management, and once the smoke has cleared, dump what remains to the highest bidder, often in Asia,” Carlson explained. “It has happened around the country. It has made a small number of people phenomenally rich. One of them is a New York-based hedge fund manager called Paul Singer, who, according to Forbes, has amassed a personal fortune of more than $3 billion.”
https://www.breitbart.com/clips/2019/12/03/fncs-carlson-rips-vicious-billionaire-paul-singer-for-vulture-capitalism-tactics/