More Domain Name Industry Consolidation As Donuts Takes On Afilias Registry Business

Donuts dropped a bit of a bombshell on the domain name industry Thursday by announcing they were taking on the domain name registry business of Afilias, making it one of the largest providers of backend registry services for hundreds of ccTLDs, legacy gTLDs and new gTLDs.

The Afilias registry business features a prominent back-end registry platform, DNS solutions and cyber-security expertise. Afilias operates the authoritative directories and DNS for over 200 top-level domains. The Afilias registry business also includes an impressive array of top-level domains such as .info, .global, and .mobi, as well as country codes, dotBrands and other generic TLDs.

For Donuts, they operate 239 new generic top-level domains (new gTLDs) and provide backend registry services for another two with over 4.3 million domains under management, as well as .travel. In the new gTLD space, Afilias provides backend registry services for 176 new gTLDs with 398,786 DUM, 21 of which with over 184,000 DUM in their own name, according to nTLDstats.

“The Afilias and Donuts teams share a commitment to security, stability and reliability,” Donuts CEO Akram Atallah commented in a statement. “This will only grow stronger as we implement the best technologies and services from each organisation while maintaining seamless delivery to our registry and registrar partners as well as our end registrants.”

The Donuts and Afilias teams will continue to provide registrar partners the same access to the domain names and services they’ve had in the past. With a combined Donuts and Afilias partnership, cybersecurity will be a top priority and registrants will have even more simplicity, consistency, efficiency and quality to help them secure their online identities.

Commenting on the acquisition, Afilias CEO, Hal Lubsen said, “We are thrilled to choose Donuts as the steward for Afilias’ next phase. As a proven leader and innovator, we know that the synergies delivered to our registry clients, registrars and employees will benefit the entire domain community.”

One of those top-level domains included is Australia’s ccTLD .au. auDA said in a statement Friday “Under its Registry License Agreement, any Change of Control of its Registry Operator, Afilias Australia Pty Ltd., requires the written consent of auDA. auDA has commenced a formal due diligence process to inform its decision regarding consent.”

It’s probably a little disingenuous as one would imagine Donuts would have wanted to factor in to their purchase price the 3.2 million .au domain names Afilias currently provide registry services to will continue.

One to believe the auDA statement disingenuous is former AusRegistry founder, whose company was the first to provide backend registry services to auDA, Adrian Kinderis.

Commenting on the Domainer blog Friday Kinderis wrote “auDA would not have been allowed to mention the transaction due to confidentiality with Afilias.” Kinderis believes “auDA indeed knew about it for months and have been discussing it. Consent has been provided and the deal is done.”

In his comments, possibly with the intention of stirring the pot a little, Kinderis goes on to claim “at the end of this term auDA will take over the running of the registry as it has wanted to do for some time. Behind the scenes auDA have been bolstering staffing numbers (around 60 now). Bruce Tonkin is an advocate for auDA running the registry. They need to spend the tens on [sic] millions they are sitting on on something and soon. The loser out of out all of this is Afilias and Afilias Australia. They are single termers and there are plenty of clauses in the contract that means they have lost out financially. Ultimately the .au contract wont [sic] mean much to DONUTS and they will have proceeded with or without auDA’s consent.”

One thing that stands out in his comments is Kinderis claiming auDA currently has around 60 staff. If so, one has to wonder what all these people do as even five years ago auDA would have been lucky to have enough staff to field a football team, no matter what your preferred type of football.

Looking at annual reports, in the financial year ending 30 June 2020, auDA’s wages and salaries expense was $4,018,799 while for the financial year ending 30 June 2015 the figure was $2,070,801. That may not total 60 staff currently employed, but wages and salaries have pretty much doubled in five years. And in that time, .au DUM have only risen slightly, from 2,972,751 as of 30 June 2015 to 3,180,395 five years later, an increase of a little under 7 percent.

The purchase of Afilias’ registry services for an undisclosed sum does not include Afilias’ mobile software and registrar businesses, is expected to close in Q4 2020, following successful completion of regulatory requirements.

Donuts and Afilias have begun the required regulatory review processes and are cooperating fully to ensure that all requirements are met.

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