Despite .org decision, ICANN not opposed to private equity companies in the domain name business.
Last Thursday, ICANN’s Board of Directors decided to nix a deal for Internet Society to sell the .org registry to a private equity company.
The domain name overseer made sure to draw a distinction between this deal and others and to state that it’s not opposed to private equity in the domain name business:
The ICANN Board’s action should not be read to provide any commentary on the propriety of for-profit entities operating gTLD registries, nor as any prohibition or judgment on the role of private equity firms controlling registry operators. The considerations in front of the Board here are specific to this transaction, particularly in light of the long-standing history of the .ORG registry.
That’s a good thing because private equity loves domain names and is already entrenched in the industry.
A private equity company currently owns Neustar’s registry business. That business is being sold to GoDaddy, which was previously private equity-owned.
Abry Partners owns Donuts, the new top level domain name company with the most extensions.
Private equity loves domain name registrars, too. Siris Capital owns Web.com.
Domain name registrars and registries make good investments. They are simple to understand and deliver predictable, recurring revenue streams.
ICANN had many concerns about a private-equity takeover of a non-profit managing one of the most important registries. But that does not extend to the industry as a whole.
This post has been updated to remove a reference to PE investors still owning a large portion of GoDaddy. They have sold their holdings.