DomainTools Blog

GoDaddy.com, Inc. and Afilias USA, Inc., have teamed up to create The Domain Name Alliance Registry, LLC (“Alliance Registry”), a joint venture seeking to assume stewardship of the usTLD, America’s sovereign space on the Internet. Yesterday, Alliance Registry submitted a proposal in response to the request for quotations issued by the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) for a registry operator for the usTLD.

“Today, the usTLD ranks 9th among the world’s country code domains, despite America’s leadership of the Internet and the most robust domain growth market in history. Now is the time to change usTLD leadership and put it on a growth track,” said Roland LaPlante, Vice-President and Chief Marketing Officer for Afilias (Listen now). Added Warren Adelman, Go Daddy’s President and Chief Operating Officer, “We believe Alliance Registry pools the strengths of its partners, Go Daddy and Afilias, to offer usTLD superior technology, enhanced marketing, and focused administration to improve this critical national resource.” (Listen now)

The bid submitted by Alliance Registry includes several key elements that would improve the .us domain registry, both in technological security and marketing tactics. Over the past 6 years, the .us domain has underperformed relative to its international competition and Alliance Registry has the resources and the capabilities to make major improvements. Some of these improvements include:

• Reduced pricing for usTLD registrations to make them more affordable and deliver greater value to the usTLD community
• Greater volume, growth, and usage of the usTLD stimulated by registry enhancements and marketing programs that have been proven to work by Alliance Registry’s joint owners
• Enhanced Locality space support to enable every city and town in America to have its own dedicated space within the usTLD (e.g. anytown.us)
• World class stability and security of the registry platform and DNS services supporting the domain
• Expanded administration services to facilitate oversight and provide better counsel for the DoC
• Enhancing kids.us so it becomes the feature-rich, safe online environment for America’s children it was envisioned to be

In addition, the proposal outlines a proven plan to ensure a smooth transition, based on the experience of its partner Afilias in transitioning numerous top-level domains and with Go Daddy’s experience in ensuring harmless data transitions for consumers. DoC is expected to award the new contract by September, with the administrator taking full responsibility of the usTLD when the contract with the current provider expires on October 26, 2007.

During a news tele-conference earlier today, Brian Cute, Alliance Registry’s new Director of .us activities said, “This is an exciting opportunity for us to work closely with DoC to realize the full potential of the usTLD.” He continued, “We believe it’s time for a change, and Alliance Registry is uniquely positioned to take usTLD to its rightful position as a leading country code domain.”

GoDaddy.com has officaly announced that it will take over the entire portfolio of more than 850,000 generic top-level domain (gTLD) names held by RegisterFly. ICANN understands that GoDaddy.com and the gTLD registries holding RegisterFly names have worked out the mechanics for restoring, renewing, and redeeming names intending that no names will be inadvertently dropped. According to the terms of the transfer agreement, RegisterFly domain names and the data underlying the available proxy service will also be transferred. People with domain names registered with RegisterFly can contact GoDaddy.com at 480-366-3500 with any questions about the transfer. GoDaddy.com also has a question and answer sheet available at http://www.godaddy.com/welcomeregisterfly

Last week we suspected this deal was going to happen and we were the first to break the news before it was officially announced. The GoDaddy.com agreement is a direct and automatic transfer to a competent and experienced customer service oriented organization. This is a commercial arrangement and the bulk transfer process that ICANN was administering has been discontinued.

Within the next few days, RegisterFly customers should be receiving an email from GoDaddy regarding how to log in to their accounts, as well as manage their domains.

Our big question is, when will RegisterFly shutdown its website? When will it stop taking money and delivering no goods. I can’t believe the Attorney General has not done something. Kevin Medina openly accepts money for services that never delivers.

ICANN just announced that a mysterious registrar that is yet to be identified may be buying RegisterFly’s customers. We are trying to put it all together and figure out the mystery company. I just don’t see how anyone would buy the company with the amount of liability it has so the deal would be for the assets rather then the whole company. We have talked to a few unnamed sources and they tell us the unnamed registrar is GoDaddy. When I asked GoDaddy for comment they said they could not comment at this time but confirmed anyone would be stupid to buy the whole company. However, four independent sources that all wished to remain confidential said they thought it was GoDaddy as well.

This would be good news for customers of RegisterFly. Customers have been very angry about the melt down and have been demanding action. This announcement brings us one step closer to resolution of this matter. RegisterFly customers may wake up next week to an email from Bob Parsons welcoming them to his customer base.

Perhaps Kevin Medina will have enough money to pay off the lawsuits if he strikes a deal to sell his customers. This is a much better deal for him than having his customers torn away from his company. Kevin has a lot of hosting customers as well, so I think this is one of the reasons I think ICANN finds it so hard to tear customers away. They are completely at the mercy of Kevin Medina.

Here is the offical ICANN announcement:

ICANN has been advised of a deal to transfer all names in RegisterFly’s management from RegisterFly to an existing accredited Registrar with a demonstrated record of customer service. This would be a quick and effective solution to many of the problems that registrants are presently experiencing with RegisterFly. The deal, which has been confirmed with the registrar, is a commercial transaction (where the acquiring registrar has worked out a financial arrangement to take over names managed by RegisterFly).

In order to make the transfer happen, all data must be provided to the acquiring registrar by RegisterFly. We have been informed that most of the data has been now made available. Final steps are underway to effect the full transfer of information which should be completed next week, with an announcement by the acquiring registrar to be made at that time.

In related news, US Federal District Court Judge Real has compelled the personal appearance of Kevin Medina before the court on Friday, 25 May 2007 to show cause why RegisterFly should not again be held in contempt of court and be further sanctioned. Kevin Medina has not so far appeared personally in this matter. ICANN will appear, and has reserved the right to take additional action before that time pursuant to the court’s orders, particularly if the RegisterFly transfer falls off the schedule outlined above.

We will continue to update you as new information becomes available. We understand how difficult these circumstances are and will continue to concentrate on getting the best possible outcome we can for registrants.

I had to post this, Candice Michelle (”The GoDaddy Girl”) was at Traffic this week. She was signing autographs and was posing for pictures with GoDaddy fans. Hey Bob, thanks for sending Candice. Customers like it when the company they do business sends their superbowl superstars to take pictures with them. It makes them feel in touch.

It made me chuckle a little that the other registrars are being out marketed by GoDaddy. GoDaddy has been the leader in new registrations for several years in a row. We have reported year after year that GoDaddy is the clear leader, there are no registrars that even come close to the amount of registrations GoDaddy does on a daily bases.

Let me explain why GoDaddy is winning.

A while back I had the pleasure to dine with Jim Sinegal the CEO of Costco. Costco has a Market Cap of over $25 Billion. Jim explained that they have a 3% profit margin and that they mark up their prices by 10%. That 7% goes to paying employees, covering real estate, and paying other operational costs. I asked the devil’s advocate question, “why doesn’t Costco mark up by one extra percent and make a 4% profit. This would increase Costco’s profit by 33%”! This would make Costco worth an extra 7 Billion. Jim remarked it would be easy to do and most likely customers would not notice or care that much either. It seems like a win-win for everyone, but wait then he explained the finer points and the reason he doesn’t do it. Jim said an extra percent is like Crack Cocaine and that the shareholders would get addicted and demand it. An extra percent here, an extra percent there, and several years later they would be in a bad spot. The company would be so addicted they would not be able to go back to 3%. This leaves the door wide open for competition. Someone else would start a competitor and before you know it they would be eating Costco’s lunch. If a company can stay with low margins and still offer excellent customer service then no one would enter the market against that company.

Network Solutions had the chance to keep everyone out. They could have lowered prices back in 1999 from $35 to $10. Network Solutions had 100% market share in 1999, not many companies can say that or even dream that, but now it has 7.6% of the market. Had they lowered prices to one dollar over costs they would surely be at 85% market share right now and several of the registrars in the market would not exist or even have been formed. Network Solutions let over 90% of the market escape because they were addicted to the $26 profit per domain.

GoDaddy is the closest business model of all the registrars to Costco. But then again Costco does not have Candice Michelle.

UPDATE: We have added a LOT more detail to our last post about the last live domain auction. We did not have time to write a thorough review yesterday but we wanted to post the prices as they happened so I encourage you to read it again.