ICANN releases official statement on the $135 million .web auction. I have to give credit to Michael Berkens, he told me months ago he thought it would be $100 million plus.
On 27 July 2016, Power Auctions LLC, ICANN‘s authorized auction service provider, conducted a New Generic Top-Level Domain (gTLD) Program auction to resolve contention for .WEB and .WEBS. Auction serves as the method of last resort for determining which applicant may operate a gTLD when several entities have applied for the same or confusingly similar gTLDs. This method was defined through ICANN‘s bottom-up, multistakeholder process.
Eight applicants completed the requirements for participating in the .WEB/.WEBS auction. NU DOT CO LLC prevailed in the auction for the price of $135 million to operate the .WEB gTLD, and Vistaprint Ltd prevailed with a price of $1 for the .WEBS gTLD.
Congrats to Juan Calle to outsmart everybody.
It’s great verisign got it, means .com will still take centre stage, web will be much like .net, and alternative
Couldn’t have turned out better in my opinion (for premium domain investors and the domain investment community as a whole). The way I see it, Verisign’s acquisition of .WEB is basically defensive not offensive. They have made their stance on the .new TLD program quite clear. Obviously they’ll seek registrations and to make back their ROI, however, it will be operated like .NET or .TV. It will NOT be marketed as the next best thing since sliced bread and certainly won’t be pushed as being a better .COM. It will be a slightly less “IT Admin Oriented” .NET. Highly regarded by a niche set of subscribers, relatively wide adoption and recognition, but never going to be brought the forefront.
I think this will deal a massive blow to the new gTLD program (.web was to be their shining star and corner stone) and usher in a whole new wave of investment in the Domain space as a whole. .COM WON. Period. I also think this was a very strong move by Verisign which will be rewarded in its stock price (although probably not right away). Shows confidence and it solidified its long term viability, regardless of .COM contract (its not a Plan A but a good Plan B). Not just a hedge on .com (hell of a hedge though), but also doesn’t allow any of the strictly for NOT COM companies to make a front attack on .COM as the long term leader of internet marketing & branding mind share. There is not a single other new gTLD out there with the ability to serve up a true alternative to .COM. MASSIVE blow to Web.com’s business right here. I think from a 5-10 year horizon perspective this was a due or die for them.
As a Verisign shareholder, I applaud managements decision and intelligent strategy. I’ll be doubling down on Verisign today unless the stock shoots up over $90. More likely I think it will take a temporary dip, possibly into $75 territory as markets try to understand what just happened. Most analysts will probably read this as a piss poor management decision and poor allocation of capital. I hope they do. I will buy more stock. But long term there is absolutely no doubt this was a critical, bold & smart move by Verisign management and they should be recognized for it.
Thanks for the comment Andrew. Well thought out, I do like your take. They have a lot of opportunities with .web, they can play it from a few different angles.
Thanks Raymond. I think their use of .web is far less important than the mere fact that Verisign got it and the NOT COM community did not. This is the reason Donuts was taking desperate last ditch efforts to stop the auction. As much as I love Paul & Dan, this was a huge blow to the new gTLD program. .WEB would have had the momentum to carry the program into every living room in America. That will never happen now.
Great analysis Andrew, thanks for sharing!
Interesting perspective. It looks to me like they just pissed $135 million down the drain.
Side note: So there’s going to be a .web AND .webs? WTF?!? Are they going to roll out a .coms too?
“.Webs” is ridiculous, and not far from worthless.
Just the other day I was trying to do a good deed for someone in a six year old thread about .us started by Michael, by explaining to the commenter that “Bingos” is practically not even a word and the “Bingos.us” he was happy about was essentially a worthless distraction and expense to him:
http://www.thedomains.com/2010/07/07/if-a-us-domain-at-best-is-only-worth-1-of-a-com-and-25-of-a-ca-why-bother/#comment-215060
Looking at the whois now which I did not do then, I see the fellow was not from the US as I had surmised, otherwise he would have known that well enough beforehand to avoid registering such a domain. But no doubt we all have stories to tell of how we registered something or even many we thought would be great only to realize we did so without full knowledge. No harm, no foul. I did and spent far more than that when I started out, that’s for sure.
.”Webs” is not quite as completely off the mark, awkward and worthless as something so awkward and practically nonexistent as “Bingos,” but it is not far from that level either.
While Verisign has to face price caps with .com, they won’t with .web … so they might be willing to push it a little more. If your shareholders demand year-over-year growth rates, doing that with a fixed price is a challenge.
Note also that .web might open the way for other generics like .site and .website, but not for niche strings like Club or the Donuts portfolio… so they don’t have to face everyone in the NOT COM side, just Radix.
We own many good club domains in .com keywordclub.com, they don’t usually sell to big end users, and not very frequent.
I think radix runs .site .website and they like the premium game a lot,.website would go the way of the do do bird once .web is live for reg few type names.
No doubt newer GTLDs have the ability to dilute older GTLDs, and make them obsolete to a point.
This is the gtld business, not complicated put down $185K, try to avoid auction, if so try to lose auction, if not much interest sell as many as you can, less back end fees and annual $25K to ICANN, and hope to make a profit less overheads, and marketing.
It’s borderline right now, if they start seeing drops in registration, then I would say the program was an epic fail.
When I see extensions like .cars run $2k annual renewals for djkskdkd.cars, you know ICANN dropped the ball here, and the owners of the GTLDs who said they wanted to offer affordable alternatives, we’re not held to a higher standard.
I would further add the day verisign grabbed .web, the GTLDs died just a little bit more.
“the day verisign grabbed .web, the GTLDs died just a little bit more.”
Agreed. The other new gtlds will now all join .mobi in eternal solitude.
@Andrew
You’re spot on.
.WEB will be a great alternative to .com or .net.
Web.com needed to go all in to get this extension. Maybe the resources were not there to make the acquisition happen.
The valuations of many GTLD extensions will diminish. Not all. But many will be superfluous.
BTW:
.web $135 million
.webs $1
value of .website?
“ZERO! Mark it a ZERO!”
Too funny. See my post above about “not far from worthless” for .webs. Did not even know about the $1 till a few moments ago.
Steve
Web.com has a market cap of just 894.95M.
Verisign has a market cap of $9.41 Billion
Verisign has $1.9 Billion in cash and securities.
Again a no brainier for Verisign
Stock is up 3% today
@Michael
Spot on.
also a brilliant move by Verisign in the negotiation/strategy with Nu Dot Co LLC . Google got the GTLD extension, .app, it wanted and wouldn’t be an active participant.
Winners:
Verisign
Nu Dot Co
.COM
.NET
Domainers with premium and/or keyword .com portfolios
Losers:
Too numerous to list
Survivors
Niche GTLD extension registries (.club, .shop, bank, .insurance, .cloud, .store, .health and others)
Bullish on Verisign
Fascinating analysis, guys. I, too, agree that this will prove to be the final nail in the coffin of the other, new gtlds, few of which ever served any purpose anyways.
Aren’t you forgetting .BLOG is on the way
A considerable amount of the base will discover .WEB “AFTER” .BLOG brings domains to their attention thru it’s mega user channel.
@stevebrady
Not sure if Automattic (WP) would have paid $19 million for .blog, if they hadn’t just closed either a Series C or D Round, somewhere north of $150 million in funding.
Lots of competition in the Blog space: Blogger, Tumblr, Medium, and many more.
Why I feel Automattic paid this amount, notwithstanding the reasons expressed by the founder.
It’s a good extension to offer to existing companies and brands, as well as the consumer (and provide the tools, templates)
for example:
Dell.blog
Fitbit.blog
Nike.blog
ESPN.blog
Nordstrom.blog
Pharma: Diabetes.Blog, Asthma,blog, ….
The founder has a vision. Let’s see if he and his team can deliver.
Probably .web won’t hurt .blog.
.WEB is so attractive it will trigger an avalanche of overwhelming demand for neologism in domain innovations hidden in the vast unsold inventory of nonsensical .coms when .WEB explodes expectation.