Nu Dot Co (VeriSign?) Won the Rights to Operate .Web for a Whopping $135M
The results of the ICANN auction are in: $135M has been bid to be able to operate .web domains. The payment for this auction will be due in Q3. The previous record was set at $41.5M, which was for the .shop gTLD. Nu Dot Co, which was accused of being a shell company, ended up being the winner in this ICANN auction. The other 6 bidders in the auction were Google, Donuts, Web.com, Radix, Schlund and Afilias.
Prior to this auction ICANN made $105M from auctioning 15 other gTLDs. Because of this one auction they made an additional $135M, bringing the total to $240M. The odd thing about this news is that “Nu Dot Co” was the only applicant who didn’t want a private auction. In a private auction all the proceeds would have been split between the losing bidders instead of going to ICANN.
Donuts first used ICANN’s appeal procedures in an attempt to delay the start date of the auction but this was swiftly declined after 4 days (usually takes a month for ICANN to make an “appeal request “decision). In a last attempt to postpone the auction Donuts then sued saying ICANN failed in its task to identify who is in control of Nu Dot Co. The lawsuit was then denied by United States District Judge Percy Anderson.
VeriSign, the owner of the .com registry, is rumored to be behind “Nu Dot Co”. Earlier this week VeriSign publicly announced that it will pay approximately $130M for the future assignment of contractual rights, which are subject to third-party consent. That would suggest that VeriSign landed $130M for .web.
The other possibility is that Neustar is behind Nu Dot Co.
Either way $135M is a hefty price tag. In order to make a profit the upcoming .web registry will have to sell millions of .web domains (I assume non-premium .web domains will be sold for around $10-$30). That won’t be an easy task considering the average registration numbers for all gTLDs combined is a measly $21K. But if VeriSign is indeed the winner of this auction then it could have easily paid $130M merely to make sure .web will never be a serious competitor to .com.