The UK-based CentralNic Group is seeking to raise €15 million (US$18m) from investors “for the acquisition of near-term identified targets.” Since 2015, CentralNic has acquired at least 10 companies, mostly domain name registrars.
The latest in the Domain Pulse series of Q&As looking at the year in review and the year ahead comes from a domain investorâs registrar perspective. Today Marc McCutcheon from Internet.bs, part of the rapidly growing CentralNIC group, discusses how CentralNICâs merger with Key-Systems brought a lot of hard work and some incredible opportunities, GDPR is a good thing, registrars offering below-cost .com domain names is unsustainable, there are too many new gTLDs for investors to make money and domain names will continue to be relevant for the foreseeable future.
Domain Pulse: What were the highlights, lowlights and challenges of 2018 in the domain name industry for you?
Marc McCutcheon: Highlights and challenges are the ongoing consolidation of the industry. Our parent company CentralNIC merged with Key-Systems in the middle of 2018 and that has brought with it a lot of hard work as well as some incredible opportunities. Having access to Key-Systems’ full set of ccTLDs has been a huge gain for Internet.bs and we are currently in the process of adding as many as we can to our offering.
No real lowlights!
DP: GDPR â good, bad and/or indifferent to you and the wider industry and why?
MM: It has been a pain from an operational point of view but I think overall it is a very good thing, I personally would rather not have my data thrown about and stored so it is good to know that some responsibility has been forced on all companies. In reality there has not been much of an impact to any of our customers or us, we have always offered free WHOIS privacy and all we have had to do is make sure that customers are aware if we are passing any of their personal data to a Registry or supplier which is a good thing anyway.
DP: What are you looking forward to in 2019?
MM: Mostly just letting all of the changes from the past year settle in. We went through a transformation last year to bring our website design up to the high standard our service deserves, and I am looking forward to doing some marketing this year and hopefully growing our customer base. A lot of people worked very hard last year and hopefully we will see the benefit of it this year.
DP: What challenges and opportunities do you see for the year ahead?
MM: It is going to be a highly competitive year amongst domain investor registrars next year. Some registrars have been pricing under cost for .com and I expect that this year that will discontinue as it canât be sustained, so there will be opportunity to gain customers via transfers. With an expected .com price increase in Q4 of 2020 we will be trying to encourage customers to renew for multiple years at the backend of this year so that is an opportunity for us.
I donât know what ICANN is going to throw at us with respect to accredited privacy providers or WHOIS changes but we are well prepared to tackle anything no matter how horrible!
DP: 2019 will mark 5 years since the first new gTLDs came online. How do you view them now?
MM: I get excited whenever I see one in the wild and Iâll point them out to whomever is with me, they usually donât care though. It is a bit like that. I think that they are a great branding tool for businesses but there isnât a lot of money in them for Registrars or Domain investors, there are just too many TLDs.
DP: Are domain names as relevant now for consumers â business, government and individuals â as they have been in the past?
MM: Of course! The internet continues to grow and they are the primary addresses for the content it holds, theyâre not going away anytime soon.
Previous Q&As in this series were with EURid, manager of the .eu top level domain (available here), with Katrin Ohlmer, CEO and founder of DOTZON GmbH (here), Afiliasâ Roland LaPlante (here), DotBERLINâs Dirk Krischenowski (here) and
DENIC (here).
If youâd like to participate in this Domain Pulse series with industry figures, please contact David Goldstein at Domain Pulse by email to david[at]goldsteinreport.com.
The British-based CentralNic has acquired the parent company of the German Key-Systems, KeyDrive, for $35.8 million it was announced today. The acquisition will see the combined group become the 11th largest registrar globally by generic top level domain volume and will be among the top 5 registry service providers by number of registry clients.
Key-Systems, which his owned by a holding company called KeyDrive based in Luxembourg, includes a number of prominent domain name registrars and related businesses include new gTLD registry KSregistry, Skyway Data Center, nic.saarland, BrandShelter, Domain Discount 24, PartnerGate and Thomsen Trampedach, among others.
âThe acquisition of KeyDrive is a milestone for the company,â said Ben Crawford, CEO of CentralNic. âOn completion, the enlarged group will have doubled in size and will have the technology platforms, expert staff, vision and drive to rival the industryâs traditional leaders.â
Alex Siffrin, the founder and CEO of KeyDrive will become Chief Operating Officer of the Company and will also be a significant shareholder.
âI am personally excited to be welcoming Alex to CentralNic,â continued Crawford. âHis experience, shared values and standing within the industry will be a tremendous benefit to the group and a great addition to the management team.â
According to an announcement from CentralNic, the acquisition represents a reverse takeover under the AIM rules for Companies and is conditional upon shareholder approval.
CentralNic has been on an acquisition spree in recent years having acquired the Australian-New Zealand registrar instra for A$33 million in 2015, the rights to operate the .sk (Slovakia) country code top level domain (ccTLD) and renewed their exclusive wholesaler contract with XYZ.com – the owner of the .xyz new gTLD till 2032, both in 2017.
In 2017, it was reported that âCentralNicâs longer-term vision is to âjoin the ranks of world leaders in its industry, which include a number of multi-billion-dollar companies.ââ
In the new gTLD business, CentralNic currently provides backend registry services for 48 new gTLDs with over 4.8 million domain names under management making it the second largest by DUM while Key-Systems, through KSregistry, has 27 new gTLDs with over 32,000 DUM, according to nTLDstats. KSregistry mostly has brand new gTLDs hence the lower number of registrations while CentralNicâs include .xyz with 2.048 million, .online (844,000) and .site (499,000) with 8 with more than 100,000 registrations.
The German domain name registrar Key-Systems has added the domain name business of the European Domain Centre (EDC), known widely for its infographics on new gTLDs and expert predictions on their future as well as being a reseller of a wide range of top level domains. It also continues a trend of consolidation within the industry with larger players buying out smaller ones that offer a point of difference in the marketplace.
The acquisition of EDC strengthens Key-Systems’ corporate domain division BrandShelter which is successfully operating since 2009. BrandShelter supports customers in protecting their company’s name, brands and trademarks on the Internet and develops customized strategies for the ideal handling of domain portfolios.
âThe acquisition of EDC is part of our global growth strategy in the field of corporate domains. With our portal BrandShelter, we are one of the leading providers for the protection of brands and trademarks on the Internetâ, says Alexander Siffrin, CEO of the Key-Systems GmbH.
In 2003, EDC was founded by Nikolaj Borge and Christopher Hofman Laursen with the aim of registering domain names under any available Top Level Domain in an easy and comfortable way as well as protecting the brand names of their customers worldwide. Since 2008 EDC has been a customer of Key-Systemsâ reseller portal RRPproxy.
The development of new gTLDs could be equated with the growth of a baby, Thomas Rickert representing the German internet association eco told the Domain Pulse conference in Berlin on Thursday with the greatest development takes place within the first 12 months.When applications closed there were 1,930 applications and 1,400 unique strings applied for. And in the first 12 months since registrations began in the first of the new gTLDs in February 2014 there is much to celebrate. Looking at nTLDstats.com, registrations across all new gTLDs will pass 4.5 million domains in the next week or two, there are over 520 gTLDs delegated, 223 registrars participating plus an unknown number of resellers.The application and implementation process though has had its problems, Rickert said in the German capital of Berlin, but he was of the view the programme had been a success.The problems as Rickert described them, were the TAS (TLD Application System) which said was an “epic failure”, Digital Archery, the Trademark Clearinghouse, Public Interest Commitments (PIC) Specifications, dealing with name collisions and the sometimes curious decision-making process.On the Trademark Clearinghouse, Rickert noted how trademark owners made a lot of noise over their concerns regarding potential trademark abuse in the new gTLDs when they were introduced. Yet when it came to using the TMCH “it was a failure”. There were nowhere near the numbers of Sunrise registrations that were hoped for to protect trademark owners.Looking to the future, Rickert said not all new gTLDs will survive, just as in any industry. This was backed up in comments in the following panel session by Alexander Siffrin, founder and CEO of Key-Systems. Siffrin believes some of the new gTLDs will fail in part due to issues such as bizarre registration requirements.Rickert also believes new gTLDs are necessary. “It’s extremely arrogant in the western world to ask internet users to change their keyboards to type domain names. I believe there is a need for growth.” And looking to the future Rickert said “stamina will be needed due to unexpected developments.” And we’re only at the beginning of a new era of the internet as the public gains awareness of what is available.The following panel session also included panellists involved in the .bio (for organic products) and .hamburg gTLDs.Godefroy Jordan, whose company Behind the Dot operates the .bio gTLD, which is aimed at the organic foods market, has over 8,000 registrations in just over six months. While this is below initial expectations, Jordan said the gTLD is performing well in its in eight key markets where it is in the top 20 in registration numbers and top ten in value.The .bio gTLD is targeting those in organic foods, from production to sale. One group is farmers who want to market their produce online but to date have found the complexity of getting a domain name, email and website too difficult. Behind the Dot research found 60 to 70 percent of farmers don’t have a website but many would be keen if it were an easier process.Registering a domain name in itself is difficult. Jordan said registrar websites are for geeks. Simplicity is important. Farmers and others don’t often understand the difference between a website and a domain name. They are also marketing to industry with advertising in magazines such as the German Bio Nachrichten (Organic News). And they are having success with 40 percent of registrants using their domains.Another to be pleased with their success was Oliver Süme, co-founder and CEO of Hamburg Top Level Domain, the operator of .hamburg. Since its launch in August 2014, there have been over 21,000 .hamburg domains registered and they are becoming quite prominent in the city. Süme commented that in the recently elections in Hamburg candidates were regularly using the local gTLD.Looking to the future, both Jordan and Süme were optimistic. Jordan said it’s a competitive market. “There aren’t a lot of markets that get 400 new products in a year. We have to fight every day to get visibility with registrars, new co-promotions and fight other gTLDs, just like the supermarket industry” where Jordan has previously worked.And while it is early days, both Christian Müller from Stratos and Siffrin said they are seeing renewal rates of around 70 percent. But that in about two weeks we’ll know more.Süme believes that in .hamburg “we have a premium product and a premium price is justified. I’m not aware of any failed registration because of the price. In terms of new gTLDs we’ve just learned to walk upright and it’s very early in process and next year could be the most exciting of my life!”Jordan said their research had found price was very important for more the more generic new gTLDs such as .online and .website but for most a price of 20 to 50 is what people expect to pay.
A German appeals court has ruled registrar Key-Systems is “liable for actions done by the users of a torrent tracking site H33T,” a report in TechDirt notes.”H33T just hosted the torrent (which, we should remind you, is not the actual infringing file), and some users used that tracker to torrent the album Blurred Lines. When H33T failed to respond to a takedown notice, Universal Music went after the registrar, and the court said it was Key-System’s responsibility to stop the infringement. Of course, the only way for the registrar to do that is to yank the entire domain.”Key-Systems appealed the original decision of a lower court, but the appeals court upheld the decision despite Key-Systems saying “it had no way of knowing if the torrent was actually infringing, the court said that the registrar was responsible for assuming it must be infringing once it had contacted the domain owners and not received a response. That’s an interesting shifting of the burden of proof. The court also seems unconcerned that the only way the registrar can remedy the situation is to take everything down, saying that if the website didn’t want this to happen it should have responded promptly to the takedown notices it had received.”In another earlier report, Lawyer Mirko Bruess from Rasch Legal, the firm representing Universal, told Torrent Freak that the decision made perfect legal sense.Key-Systems claimed the infringement was not “obvious”. But “the Court disagreed and states that the registrar had to assume that the claims made by our client were correct after contacting the domain owner (their customer) and not getting any response.””The Court also finds that the registrar was legally and technically in a position to stop the infringement. The domain owner was in a clear breach of the registrar’s TOS by running a torrent-site and not reacting to takedown notices. This gave the registrar the opportunity and the obligation to terminate the service by deleting the name from the DNS,” Bruess added.The court also believes that taking down the entire torrent site was not an excessive response.”The Court’s decision gives rights owners another option in the ongoing fight against the illegal exploitation of their content. We will have this in mind when looking at other domains that use our clients’ content without licensing,” Bruess concluded in his statement to Torrent Freak.The decision is problematic TechDirt says.”For quite some time now, we’ve been concerned about the continued expansion of “secondary liability” concepts, adding more and more liability for copyright infringement to parties who are often far removed from any actual infringement. There are two major concerns with this. First, putting liability on one party for the actions of another just seems generally problematic. But, perhaps more importantly, when you put potential liability on an unrelated party, the end result is almost always excessive policing in a manner that hinders or entirely blocks perfectly legitimate activity and speech.”
Ten new gTLDs and ten registrars have now passed the 10,000 registrations mark. The gTLD with the most registrations continues to be .guru with 47,944 as of 4 April, while .berlin is closing the gap with 44,386 according to nTLDstats.com.
In the period 22 March to 4 April there were 2,186 .guru registrations, while from 22 March to 3 April there were 4,226 .berlin registrations.
However total numbers vary from the nTLDstats.com home page to the page for individual gTLDs. But it is clear that .berlin is closing the gap on .guru.
For registrars, GoDaddy continues to dominate with 130,344 registrations and three in ten (30.01%) registrations.
Meanwhile, the top ten gTLDs are with registrations and market share are:
1.    .guru    47,944    11.04%
2.    .berlin    44,386    10.22%
3.    .photography    31,138    7.17%
4.    .tips    18,379    4.23%
5.    .today    18,340    4.22%
6.    .email    18,328    4.22%
7.    .company    13,141    3.03%
8.    .technology    12,681    2.92%
9.    .directory    11,582    2.67%
10.    .center    10,424    2.40%.
And on the registrar side of things, the top ten gTLDs with registrations and market share are:
1. Â Â Â Godaddy LLC Â Â Â 130,344 Â Â Â 30.01%
2. Â Â Â 1&1 Internet AG Â Â Â 43,973 Â Â Â 10.12%
3. Â Â Â Enom, Inc. Â Â Â 41,092 Â Â Â 9.46%
4. Â Â Â united-domains AG Â Â Â 39,077 Â Â Â 9.00%
5. Â Â Â Cronon AG Â Â Â 17,144 Â Â Â 3.95%
6. Â Â Â Name.com, Inc. Â Â Â 14,685 Â Â Â 3.38%
7. Â Â Â Tucows Domains Inc. Â Â Â 13,386 Â Â Â 3.08%
8.    Mesh Digital Limited    13,221    3.04%
9.    PSI-USA, Inc. dba Domain Robot    13,217    3.04%
10. Â Â Â Key-Systems, LLC Â Â Â 11,564 Â Â Â 2.66%
As the Big Reveal approaches, more companies are coming out, so to speak, and beating their chests with announcements of how many top level domain applications they have submitted.Neustar has now eclipsed Verisign, who submitted 234 applications including 14 for itself, by submitting 358 applications including being selected by the City of New York as the registry service provider to manage the application process and operate .NYC.Other companies to submit multiple applications including KS Registry, a subsidiary of Key-Systems, who submitted 31 applications, who are running a Digital Archery service for customers and non-customers alike, although the latter will have to stump up €15,000 per application that uses their Digital Archery service.Digital Archery, Key-Systems explains, “Digital Archery means, that each applicant uses an online system to choose a date and time in the above mentioned timeframe. The applicant logs in and clicks the submit button as accurately as possible. The closer the click is to the preselected time, the sooner will the application be reviewed.”Demand Media is another player. The owner of Enom announced they applied for 26 names on a stand-alone basis. In addition they entered into a strategic arrangement with Donuts, who last week announced they were applying for 307 gTLDs, through which it may acquire rights in certain gTLDs after they have been awarded to Donuts by ICANN. These rights would be shared equally with Donuts and are associated with 107 gTLDs for which Donuts is the applicant. Additionally, a subsidiary of Demand Media has been selected as the technical registry operator for both Demand Media and Donuts.And in another report, ICANNWiki founder Raymond King and business partner Peter Brual say they have applied for ten gTLDs.