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Full NamesCon schedule released, GoDaddy CEO Aman Bhutani to keynote

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Bhutani to speak at “Domain Economic Forum”.

Headshot photo of Aman Bhutani, CEO of GoDaddy

GoDaddy CEO Aman Bhutani will keynote NamesCon Global 2020.

NamesCon has published the full schedule for its event taking place in Austin January 29-February 1.

Aman Bhutani, who became the CEO of GoDaddy last year, will be the main keynote speaker. Bhutani will speak on January 30 at 1 pm.

On Friday at 11 am, I will moderate a panel “Threats and Opportunities: New TLDs 5 Years In.” I will be joined by Christa Taylor, CMO of MMX, Christina Beavis, COO of Vox Populi Registry, and Matt Overman, SVP of sales at Donuts.

While the main hotel for NamesCon is sold out, NamesCon is offering discounted rates at three nearby hotels.

Discounted show tickets are still available using the code DNW30.

Namecheap launches Validation.com for identity verification

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System makes it easy for businesses to verify the identity of customers.

Picture of a selfie next to a government-issued ID on Validation.com

Validation.com makes it easier for businesses to verify the identity of customers.

Namecheap has launched a new identity verification service using a great domain name: Validation.com.

The service lets businesses confirm the identity of customers for various purposes, including chargeback prevent and Know Your Customer (KYC) rules.

Businesses using Validation.com create a submission link for their customers and select which identity documents need to be submitted. This can include a government-issued ID, a utility bill, etc.

Typical scenarios include a company validating a government-issued ID against a selfie or verifying that the name on a credit card matches an identity card.

Validation.com does not check the information against databases. Instead, it’s a self-service tool for businesses to carry out the validation level they are comfortable with.

This type of process might sound familiar to domain investors; users of Escrow.com have to provide similar documentation as part of the company’s KYC rules. But setting up a process to handle this sort of verification is beyond the reach of many small businesses, and a hassle for larger businesses.

The product solves another big problem, too: while companies can do identity verification manually, that means receiving sensitive data. Between GDPR and regulations coming to the U.S. (such as the California Consumer Privacy Act), small businesses need to avoid handling sensitive data. Validation.com does it for them.

It also gives trust to the consumer who has to share the information. Using a great domain like Validation.com certainly lends credibility to the process.

Plans start at $19 per month.

Mailchimp launches website builder

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Company that started as an email marketing platform is entering a crowded field.

Screenshots of websites built with Mailchimp's new website builder

These websites were build with Mailchimp’s new website builder, currently in beta.

Mailchimp is the latest company to get into the website builder game, taking on companies such as GoDaddy (NYSE: GDDY), Wix (NASDAQ: WIX), Squarespace and Weebly.

The company started as an email marketing platform but is expanding to become an all-in-one online marketing platform. It offers landing pages and online marketing as well.

Now it is introducing its own website builder in beta. It’s free to use, and paid Mailchimp customers can connect a custom domain name to their website. Mailchimp is also reselling domains through Tucows to allow customers to register domains through their Mailchimp account.

Here’s my question: when does Mailchimp rebrand as Chimp and buy Chimp.com?

The economics of .org domain names

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Ethos Capital just bought a license to print money.

Picture of printing press printing money

Yesterday, Internet Society announced it was selling the .Org registry to a private equity company. The price has not yet been disclosed, but it was surely a very high figure, as I will explain.

.Org is the second most valuable namespace behind .com. As of the end of July, there were 10.5 million .org domains registered.

Although many associate the name with non-profits, anyone can register a .org domain for just about any purpose. Some groups even register .org domains instead of .com.

Let’s look at the economics of the .org namespace.

To start, round down to 10 million domains. At $9.93 per domain, it brings in about $100 million in revenue at today’s wholesale price.

Costs are minimal. About $18 million to backend registry Afilias (which will be negotiated down again in the future), a few million to ICANN, some marketing budget to registrars and staff to help push the name. Call the staffing element about $3-4 million, but it could be lowered. Especially if you fold it into Donuts or another registry.

But Ethos Capital wasn’t paying just for this $100 million a year. ICANN has removed pricing caps on .org, so the company can charge whatever it wants for .org domains.

To maximize profits, it should wait a year until things quiet down and then implement an increase. Raise it 50% to $15? Double it to $20?

Let’s go with the $20 price tag. This would have only a slight impact on total .org registrations. A company using a .org isn’t going to switch domains over five or ten bucks a year. It’s too much work. Some people will drop excess domains and domainers will think twice. But I believe .org would lose no more than 10% of registrations.

So 9 million domains x 20 each = $180 million revenue. And the costs barely budge.

There’d be some uproar. But Ethos could offer free .org domains to non-profits that apply. “Hey, fill out this application that takes an hour telling us about the good work you do and you get your name for free.” Very few non-profits will take them up on this. They can do more with their hour than fill out an application to save twenty bucks.

Also, registrants can renew for up to 10 years in advance at today’s prices. Not bad for Ethos if people want to pay ten years’ worth of registrations in advance. Most won’t.

To keep the top of the funnel moving, the registry should offer discounted first-year registrations, as is typical these days. Maybe keep the retail price around $10-$15 for first-year registrations through rebates to registrars.

The registry can also hold back expiring .org domains and apply premium pricing tiers to them. This isn’t as effective as it once was because expired domain services transfer domains before they delete, but there’s still value here.

And the initial price increase is just the first one. They can easily raise prices from there, even if only a modest 10% per year.

Start adding this up and I’d be shocked if this wasn’t a solid ten-figure deal. Verisign, which runs .com, is valued in the stock market at $22 billion and it doesn’t have carte blanche to raise prices.

Breaking: Private Equity company acquires .Org registry

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Logo for .org domain, featuring a blue circle with white letters spelling ORGEthos Capital, led by former ABRY Partners Managing Partner, buys .Org registry.

I thought this might happen. And now it has.

Fresh off ICANN’s blunder letting Public Interest Registry set whatever price it wants for .org domain names, Internet Society (ISOC) has sold the .org registry Public Interest Registry (PIR) to private equity company Ethos Capital.

Game. Set. Match.

This gives Internet Society a huge (as yet unkown) endowment rather than worrying about what the future of the .org domain name holds. PIR generated $101 million in revenue in 2018 and contributed nearly $50 million to Internet Society. It contributed $74 million to ISOC in 2017.

ICANN made this deal much more valuable by removing all price controls on .org.

While Internet Society might not have wanted to raise prices, a private equity company surely will try to maximize the value of the registry.

In a release about the deal, Internet Society noted:

Today’s news has tremendous benefits for both the Internet Society and PIR.  The transaction will help the Internet Society to secure its future through more stable, diversified and sustainable financial resources than it has at present, allowing the organization to plan for the long term and advance its vision of an Internet for everyone on an even broader scale.  It will also enable PIR to continue expanding its mission and important work under new ownership — including its goal of keeping .ORG accessible and reasonably priced — while further strengthening and deepening its commitment to the .ORG Community.

We’ll have to see what “reasonably priced” means. Certainly, the goals of Ethos Capital are very different from Internet Society.

Ethos Capital is a new private equity firm lead by Erik Brooks. Brooks was at Abry Partners until earlier this year. Abry Partners acquired Donuts and installed former ICANN President of Global Domains Akram Atallah in the top spot there.

Donuts co-founder Jon Nevett left to be CEO of Public Interest Registry.

The other person at Ethos is former ICANN Senior Vice President Abusitta-Ouri.

Ethos appears to have just been founded. It acquired the domain name EthosCapital.com at the end of October through Afternic.

[Update: The firm might be tied to former ICANN CEO Fadi Chehadé as well.]

PIR CEO Jon Nevett commented to Domain Name Wire:

Our goal has always been to make .ORG accessible and reasonably priced – and that will continue under our new ownership. PIR has made reasonable decisions on price in the past, and we will uphold this spirit going forward. We would never make dramatic price increases as we know it would harm our registrants, as well as our registrars.

ICANN watcher George Kirikos brought up the potential of a PE sale when ICANN proposed the contractual changes removing price caps:

Some have suggested that the Internet Society and/or PIR would never raise fees by a large amount. However, “hope is not a strategy.” Past performance is no guarantee of the future. Leadership can change, as can priorities/missions. It’s clear from section 7.5 of the the draft contract itself:

https://www.icann.org/sites/default/files/tlds/org/org-proposed-renewal-18mar19-en.pdf

that ISOC/PIR could simply sell or assign the registry contract to another entity (e.g. Private Equity, just as registry operator Donuts was sold by its founders), and that new owner/entity could take the heat for future egregious fee increases. ICANN would not be able to stop such a deal. Such a sale would allow ISOC to create a huge endowment for itself worth billions of dollars, given that .org is arguably the second most desirable gTLD, after only .com.

This type of deal doesn’t happen overnight, and has likely been in the works for a while.

When ICANN decided to remove price restrictions on .org, my thought was this would be a pivitol moment in the history of ICANN. But it probably wouldn’t come back to bite it for another 5-10 years, at which point current leadership would have moved on.

But it came back to bite it now, and many more groups will call upon ICANN to justify its decision.

Public Interest Registry had operating income of $45.9 million in 2018. Any amount it increases prices falls directly to the bottom line.

I have reached out to Ethos for comment.

Update: Richard Kirkendall, CEO of Namecheap, which filed a reconsideration request with ICANN over the .org price cap removal, released this statement to DNW:

Obviously, we are disturbed by the timing of this transaction and how it reflects on the decision by ICANN to lift the price caps. While we all as registrars will be affected by this sale, the biggest losers will be our customers and all other .org holders who are sure to see their renewal prices increase over time.

Additional coverage:

The economics of .org domain names

The interesting connection between the .Org deal and ICANN

Note: this post has been updated throughout the day with more information and comments from the industry.