According to ICANN 2014 budget it is expecting revenue coming in from New gTLD’ to be less than 10% of existing TLD”s.
The 2014 revised budget has $81,115,000 in revenue coming in from registries and registrars from incumbent TLD’s but only $7,043,000 in revenue coming in from new gTLD’s.
ICANN fiscal year closes on June 30 and since new gTLD’s most likely wont start until the 4th Q of 2013, that is taking into account less than a full year of operation.
Moreover many new gTLD’s will not launch until the 1st quarter of 2014 leaving only a few months of operations before ICANN fiscal year closes.
ICANN is also expecting that revenue from incumbent TLD registries is forecasted to decrease during the 2nd half of FY14 by 1%, as a result of the new gTLD registries starting operations, resulting in a flat transaction volume vs FY13.
There’s another a hot topic in auctions. Private auctions to resolve contention between applicants could are a good thing in general. It takes of pressure from ICANN and the new gTLD process, could save (in case of winning an auction) or bring (in case of losing an auction) the applicants money. Private auctions also bring timely clarity to many applicants how to act in the further new gTLD processes.
The problem that private auctions have is that they are not transparent for ICANN and the Internet community. They are critical in terms of the rules of the Applicant Guidebook since the auction outcome may have a tremendous impact not only on the financial stability of the winning applicant. It is anticipated that the payment of hundreds of thousands to millions of US$ by the winning bidder in an auction is in most case a clear-cut material change to its application. This applies to private as well as to ICANN auctions.
Paying such high amounts as auction winner not only changes marketing spending and staff count in a new gTLD’s business plan but it goes deeply into the whole business model of the applicant and is very likely to change the domain name price, expected number of domain name registrations and revenues. Public or hidden change of ownership or high debts are other likely outcome of an auction. According to the Applicant Guidebook a material change will lead to a re-evaluation of an application or may lead to a push of the application to the next round or a non-approval of an application.
Due to such a scenario and the observed gaming of loopholes in the Applicant Guidebook it is expected that most private auction winners will not communicate the full and true results of private auctions to ICANN. Therefore it is suggested that all results of private contention resolutions need to be reported to ICANN as a change request by the winning applicant. This includes short- to long-term agreed share transactions and other financial transactions, debts, staff changes and others. ICANN may consider then if the change request is a material change and what that means to the further processing of the application.