auDA Breach Notice To Australian Registrar Impacts Many Thousands Of Domains, And Possibly Webcentral Takeover

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A breach notice is believed to have been issued by the Australian domain name regulator auDA to a local registrar with many thousands of domain names under management impacted. It even has the potential to indirectly impact the recent 5GN takeover of Webcentral, according to rumours swirling around the Australian domain name industry this week. The reasons for the breach notice are unknown, but it needs to be complied with urgently, possibly as soon as Friday this week.

The issue is rather convoluted and follows a winding path. It is believed the breach notice has been issued by auDA to the Australian domain name registrar NetAlliance, better known for its NetFleet aftermarket. NetAlliance was originally 50% owned by entities controlled by David and Mark Lye, the other half owned by the registrar Netregistry. In recent years Netregistry became a subsidiary of Melbourne IT, which became part of ARQ Group, and now both are part of the Webcentral Group. The Webcentral Group has been in the news of late, subject to a takeover bid first by Siris Capital Group’s Web.com, which was later trumped by little-known Australian wholesale telecommunications company 5G Networks, which is still subject to final shareholder approval.

The Lye brothers appear to have ended their interest in NetAlliance in June 2020 and are no longer directors or shareholders. David Warmuz, who founded Trellian 23 years ago and is still CEO (also owner of Drop.com.au), became involved in NetAlliance in June, and Trellian Pty Ltd bought the Lye brother’s shares.

Next up Trellian, who describe themselves as “Experts in Direct Navigation Traffic” and provide a number of services including domain registration, parking and sales, also signed a deal to buy Webcentral’s 50% share of NetAlliance, but this has been thrown into jeopardy with the proposed 5GN takeover. Trellian and Warmuz are respected operators in the domain name space and by all reports have an excellent reputation for looking after their customers as well as an eye for an opportunity. Adding Netfleet would have been another string to their bow.

And it seems Warmuz would likely be a lifesaver for Netfleet, another company in the Australian domain name market (Webcentral is another) with major problems. NetFleet’s performance in the drop catching market has deteriorated markedly in the past six months. I believe they “catch” almost nothing now. They also lost Nikki Scholes recently, who was appointed Business Manager back in 2016 when one of the company directors happened to be Bruce Tonkin, now Chief Operating Officer at auDA. Since Scholes resigned in the past few months, reports are customer service standards have plummeted.

The current situation at NetAlliance is the aforementioned many thousands of domain names, possibly 15,000, registered through them are impacted and there are reports customer service tickets are not being answered and some renewals are not being processed.

While there have been very few registrar failures over the years in the Australian domain name market, previous auDA administrations have managed to deal with them well and registrants weren’t overly inconvenienced. This is a test for the new auDA CEO and administration. One of these failures was Nicholas Bolton’s Bottle Domains in 2009, which was banned from its primary business of registering domain names. Move forward a decade and Bolton is currently involved in the 5GN takeover of Webcentral, being the Managing Director and Chief Executive Officer of Keybridge Capital, which has a 9.24% shareholding Webcentral. Keybridge told Webcentral in early September it intends to vote against the 5GN takeover. To be clear, there is no suggestion or inference of impropriety by Bolton. Rather the Australian domain name industry isn’t very large and players are often going to be regularly involved in more than one position and company over the years.

Next. Watch this space.

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