On a webinar today, Internet Society has purportedly disclosed that Ethos Capital will pay $1.135 billion to acquire the .org registry from it:
#Internetsociety offered 1b and 135mil$USD for #.ORG from Ethos Capital, disclosed only now at a special webinar
This was a savvy investment for former ICANN CEO Fadi Chehadé and Ethos Capital. Had .org been sold in a competitive process, it surely would have sold for much more.
At the same time, the deal makes financial sense for ISOC. It should earn a solid $50 million+ per year from its endowment, giving it stability without concerns to what might happen to its golden goose in the future.
The current wholesale price for .org is $9.93, bringing in around $100 million in revenue per year. Costs are approximately $25 million but can be dramatically reduced. If Ethos doubles the price, it will lose very few registrations and bring in nearly $200 million a year in revenue.
Let’s take Ethos at its word that it might, possibly, “potentially” just raise prices 10% per year. That’s more than what Public Interest Registry has done in the past, but it’s also what was allowed in the contract before price caps were removed.
At the end of ten years, that puts the wholesale price at $25.75. Assuming it still has 10 million domains under management, that’s $257.5 million in revenue and around $235 million in profit.