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Where Does Your $15 .com Domain Registration Go?

The initial breakdown is fairly simple to come across. Taking into account the revenue they share in common ICANN’s share would be $0.18, the registry would claim $7.16, and the remaining $7.66 would go to the registrar. Because these numbers are so simple and straightforward, they do not tell the whole story as to where your money is ultimately going.

To give a more comprehensive view as to how these dollars are spent and how much money is ultimately being used to provide your service, I did a little digging. This involved taking a look at some publicly available financial data from notable companies like ICANN, VeriSign, Go Daddy, and Netsol.

The first step I took was to do what is called a vertical analysis in the accounting world. This analysis was done to ICANN’s statement of activities and the income statements of the registry and registrars. The statement of activities is basically the equivalent to an income statement for a non-profit business. When it comes to these specific statements, a vertical analysis breaks down all the statements’ accounts into a percentage of total sales.

This gave me a fairly good idea as to where the revenue dollars of each company were ultimately ending up, such as whether it was being spent on expenses or being retained as income. In this particular step all non-cash expenses such as depreciation and amortization were eliminated as they are not relevant to the information I was trying to collect.

The vertical analysis was able to provide some insight however, it did not take into account the revenue and cost of goods sold ICANN, the registry, and the registrar share in common. The way I was able to get around this hurdle was to calculate the net profit margins (Net Profit/Total Revenues) based simply on the numbers they share in common. The resulting calculations are as follows: Registrar $7.66/$15=51.1%, Registry $7.16/$15=47.7%, and ICANN $0.18/$15=1.2%. These percentages were then multiplied by the percentages I was able to obtain through the initial vertical analysis.

The last step was to take the resulting end percentages and multiply them by the $15 domain registration to come up with dollar amounts that are easier to understand. The amounts are displayed in a single pie chart shown to the left (click for full version). In the end they are only estimates because we can never be positive as to where a company gets the cash to cover their expenses however, it does give a somewhat clearer idea as to how your money is being spent and exactly how much is being retained as income by each company.

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Whois: Michelle Mulkern

Michelle Mulkern is a employee at Oracle Dyn Global Business Unit, a pioneer in managed DNS and a leader in cloud-based infrastructure that connects users with digital content and experiences across a global internet.

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