Powerful internet authority says it’s powerless to stop billion dollar .org takeover

The private equity takeover of one of the internet’s biggest domain name extensions is growing more convoluted by the day.

ICANN (Internet Corporation for Assigned Names and Numbers), the organization empowered to manage the internet’s domain name system, has said it will not stop the sale of the .org top level domain (TLD) extension from a nonprofit to a private equity firm. 

In a statement to the Financial Times, ICANN says that it “does not have authority over the proposed acquisition” and that its role is to simply “assure the continued operation of the .org domain.”

On Friday, the sale price of the .org extension to the private equity firm, Ethos Capital, was disclosed: $1.135 billion.

Furthermore, the connections between current and former CEOs at Ethos Capital, ICANN, and the .org registry in the lead up to this sale is a tangled mess, with major players in the acquisition trading various managerial roles at each organization over the years. Couple that with the conspicuous timing of it all and it has some dubbing the chain of events “the great .org heist.”

The .org domain is popular among nonprofit organizations, which have expressed concern over recent events involving the extension’s sale. 

While ICANN’s statement is a disappointment to those hoping the organization would step in and do something about the sale, it’s not surprising. Over the summer, ICANN removed a longstanding price-cap in its contract with Public Interest Registry (PIR), the nonprofit registry which managed the .org extension and set yearly pricing. 

The removal of the price-cap was especially controversial as it received near unanimous negative response during the ICANN comment period. Those against the move ranged from people and organizations who register .org domains to domain registrars, like Namecheap, which buy the domains at wholesale from PIR and then sell them to consumers.

PIR now has the authority to raise its .org domain prices as much as it’d like, even though in a statement, the nonprofit promised it wouldn’t do so. 

Now, only months after the removal of the price-cap, private equity has acquired the .org registry and PIR from its parent organization, Internet Society. 

The concern that a for-profit firm would raise prices to recoup its billion dollar investment is surely a valid one.

As the domain industry outlet DomainNameWire points out though, it appears the $1.135 billion price is a steal and would have sold for much higher if it was a competitive sales process. 

PIR currently prices each .org domain at just under $10 per year, bringing in around $100 million a year. Ethos Capital has already said it would “potentially” raise domain prices 10 percent each year. Raising prices at that amount for 10 years would double its investment in a decade.