A blockbuster transaction in the domain name industry as two registries combine.
Donuts, the largest top level domain name operator in terms of number of extensions, is acquiring domain name registry Afilias.
The deal includes Afilias’ “owned and operated” top level domains such as .blue and .global, as well as its registry services business. It does not include Afilias’ mobile software business Device Atlas, the 101Domains domain name registrar, and any interest Afilias has in the contested .Web top level domain name.
Afilias operates the backend registry for over 200 top level domain names. It also operates the large .info and .mobi namespaces.
The biggest prize of all is Afilias’ contract to run the backend for Public Interest Registry’s .org. That may be worth close to $20 million a year.
The combined entity will manage about 25 million domains; Donuts currently has 4.5 million domains under management across 242 top level domains and Afilias has 20 million. About half of Afilias’ domains under management are .org.
Afilias COO Ram Mohan told Domain Name Wire that the transaction was part of a competitive process. As to why now?
“We’ve had a really strong run, Mohan said. “We’ve been in business for 20 years now.”
Mohan, the second employee at Afilias, pointed out that this will be a good exit for Afilias’ shareholders after two decades. He also hopes that it will be a good opportunity for Afilias’ employees to grow their responsibilities.
Donuts CMO Mina Neuberg said it was premature to determine what Donuts will do now that it has two registry platforms. Presumably, it will combine them at some point in the future.
It’s also too early to know what will happen to the nearly 200 Afilias employees that are tied to the assets Afilias is selling. When Donuts acquired Rightside in 2017, it kept some employees from both entities. That acquisition was made under a prior management and ownership team.
Private equity company Abry Partners now owns Donuts.
When Ethos Capital, a private equity company connected to former Abry partner and former CEO Fadi Chehadé, announced its (now failed) plans to acquire .Org registry Public Interest Registry, my working assumption was that this new for-profit entity would eventually be combined with Donuts. Now, Donuts will get the lucrative .org contract as a registry services provider.
The transaction is just the latest case of consolidation in the domain name industry. One of Afilias’ rivals, Neustar Registry, was acquired by GoDaddy earlier this year for $218 million.
Afilias sold its stake in new top level domain company MMX earlier this week, perhaps as a step toward completing this deal.
The deal is expected to close in the fourth quarter.
Mark Thorpe says
Not surprised. But .COM is the only domain extension that matters.
Ryan - DomainAgents says
More consolidation. Any bets on who will be next?
M. Menius says
This is one of the most signficant developments in many years. Donuts has a more forward-thinking approach to domains in the marketplace.
Dollars to Donuts.
Looks like .web is a gone case for affilias. Why would it let go of all registry business if it has a shot at registry for a high profile TLD?
Andrew Allemann says
I imagine that, should they get .web, they could sell it. I don’t know if they could sell it for what they will have to pay for it, but they could sell it. That said, I don’t think they’ll win their case.
I agree. It is just that if have a shot at .web, they would have waited to negotiate the terms of the deal with donuts. It would have increased the selling price whatever that is, given the hype around that TLD.
Why would they sell rest of registry first and then thinking about selling .web as a different entity. Too much of an administrative hassle.
K Sec says
Do we have any news with regards to .Web?
Versign said something in their Q2 investor meetings and then all trace to that has suddenly disappeared.
Final hearing on IRP took place in second week of August’20. A decision is expected in this quarter.