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New gTLD Auctions See Questionable Amounts Paid

Minds + Machines logoMinds + Machines have announced they gained aggregate cash of approximately $6.2 million from withdrawing its applications to .design, .flowers, .group, .realestate and .video in private auctions. The net cash to M+M includes the amounts paid for .vip and .law, and is also net of auction fees and refunds received from ICANN for withdrawing applications.

The Company also participated in the ICANN-sponsored auctions for .vip and .tech, in which it purchased .vip for approximately $3.1 million, and lost the auction for .tech. The auction for .tech was sponsored by ICANN, and hence the Company did not receive funds from the winning bidder of .tech, as happens in a private auction.

Which makes one wonder. M+M, and others paying seemingly high prices obviously have done some homework and see a strong market. But with so many gTLDs coming to market, and paying $3.1m for .vip, it is hard to see M+M making good money. But only time will tell.

But M+M are happy. “The outcome from the latest auction rounds has surpassed all expectations. Our focus in auctions has, and will continue to be, building the premier portfolio of top level domains,” said Fred Krueger, Chairman of Minds + Machines.

“These are exciting times and we are still only at the very early stages of the new generic TLD rollout programme,” Krueger went on to say in announcing interim financial results.

“During the first half of the year, we have focused both on how best to grow our portfolio of wholly or majority owned top level domains and how best to address the markets for our existing portfolio of TLDs.

“We believe that the overall performance of our new TLDs, and the Group as a whole, greatly benefits from our having our own additional registrar channel through which to market and sell our new TLDs, including our portfolio TLDs, directly to consumers. We look forward to continuing to develop our consumer focused registrar services.”

“All in all, we believe that the Company’s new TLD portfolio, human capital and operational and financial structure have us very well placed to continue succeeding in the future.”

The company also released financials for the six months to 30 June. These show that total sales for the six months were £295,000, up from 7,000 in the previous six months while what is considered revenue was £68,000, also up from 7,000 and there was a £7,110,000 profit to M+M on gTLD auctions. Net assets were valued at £45,277,000, up from £23,976,000 six months earlier.

In announcing their gTLD wins and losses, M+M said in relation to .law, a third party participated in the private auction. The third party will solely receive a share of ongoing .law revenues and will not be involved in the management, operations or policy-making of the .law TLD.

M+M now has interests in 26 uncontested domains which it either wholly/majority owns or in which it has a JV interest. It also has commercial interests in a further 6 client uncontested domains.

There are also 25 remaining contested gTLD applications, which M+M either wholly/majority owns or in which it has a JV interest, and the Board believes that the majority of these will be resolved through the private auction process. In addition, clients of M+M, for whom it will be providing registry and registrar services, have interests in a further three contested applications.

The private auction for .flowers took place the first week of September; the ICANN sponsored auctions for .tech and .vip completed the week of 8 September; and the private auctions for .design, .law .realestate, and .video, took place in the week of 15 September. The private auction for .group, in which Minds + Machines had an interest, concluded in August.