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> ... by 2018, ISOC was sitting on a pretty large ongoing revenue stream in the form of .org registration fees. However, ISOC management felt that having essent

> ... by 2018, ISOC was sitting on a pretty large ongoing revenue stream in the form of .org registration fees. However, ISOC management felt that having essentially all of their funding dependent on one revenue source was unwise and that actually running .org was a mismatch with ISOC’s main mission. Instead, they entered into a deal to sell PIR (and hence the .org contract) to a private equity firm called Ethos Capital, which is where things get interesting. This sounds like a rather shortsighted decision, to give up a very reliable source of recurring revenue because you'd rather only have multiple smaller sources of revenue... why not both?

judge2020 6y ago
The reasoning sounds like a facade since it's unlikely that .org registrations and renewals will slow down anytime soon.
nikanj 6y ago
The current situation results in money ending up in the pockets of ISOC. By doing the deal, the future revenue would go into the pockets of a private equity firm instead, a much better deal for the people running the private equity firm - who incidentally happened to be the same people making the decision!
- dathinab 6y ago
  That, But also the contract ends in 2029. Trying to sell it now while it's still worth something and user the money to establish multiple streams of income which don't have the risk of abruptly ending in 2029 it's on itself not a bad idea. Just that the moment you do so in a way which might privatelty profit you massively people stop trusting you anyway.
kevin_thibedeau 6y ago
Or they could have invested a portion of their income for the past 20 years and built an endowment while still having a nice revenue stream. Nobody has explained where all their cash disappeared to.
- est31 6y ago
  They can still start doing it.
- dathinab 6y ago
  > Nobody has explained where all their cash disappeared to. As a non profit organization they had to inform certain institutions about it. Just because it's not publicum didn't mean it's mismanaged. Through way to high salaries are sadly quite typical for this kind of organizations. (Kind=Npo which "gets" large amounts of money each year)
redis_mlc 6y ago
> This sounds like a rather short-sighted decision It wasn't shortsighted at all ... it was a ruse.
jandrese 6y ago
Its nonsensical. They get almost all of their funding from one source, which they say is a bad idea even though the income stream is very reliable for the foreseeable future. So their plan is to get rid of it and replace it with...what exactly? Donations? Some other kind of industry that they have not mentioned yet? The plan seemed to start and end with selling off their primary revenue stream.
- scatters 6y ago
  Assuming it was sold for what it was worth, the selling price could have been used as an endowment to purchase investments with a similar cashflow/risk profile but greater diversification so lesser risk overall. This is pretty basic economics: the value of an investment is the NPV of its future cashflows.
  - tw04 6y ago
    What possible investment could ever match the risk:return of .org and where do I sign up? That is about the most risk free/cash positive investment in the history of mankind. Short of cornering the worldwide market on oxygen you aren't going to find a better investment.
    - dathinab 6y ago
      The .org contract ends in 2029! No guarantees that it will be renewed.
      - trianglem 6y ago
        That is still like having a golden goose for nearly a decade.
      - felipelemos 6y ago
        From article: "One interesting fact about these contracts is that they are effectively perpetual: the contracts themselves are for quite long terms and registry agreements typically provide for automatic renewal except under cases of significant misbehavior by the registry. In other words, this is a more or less permanent claim on the revenues for a given TLD."
donmcronald 6y ago
I don't think anyone cares about ISOC beyond them having control of .org. Really, what do they do? By selling to Ethos, they'd get out of the public's purview. Then they could take the billion dollars and give contracts "to better the internet" to friends, family, and relatives. Free money!
- fanf2 6y ago
  ISOC provides financial backing for the IETF and the RFC Editor, and does a bunch of lobbying and Internet growth/promotion projects.

judge2020 6y ago

The reasoning sounds like a facade since it's unlikely that .org registrations and renewals will slow down anytime soon.

nikanj 6y ago

The current situation results in money ending up in the pockets of ISOC. By doing the deal, the future revenue would go into the pockets of a private equity firm instead, a much better deal for the people running the private equity firm - who incidentally happened to be the same people making the decision!

dathinab 6y ago
That, But also the contract ends in 2029. Trying to sell it now while it's still worth something and user the money to establish multiple streams of income which don't have the risk of abruptly ending in 2029 it's on itself not a bad idea. Just that the moment you do so in a way which might privatelty profit you massively people stop trusting you anyway.

kevin_thibedeau 6y ago

Or they could have invested a portion of their income for the past 20 years and built an endowment while still having a nice revenue stream. Nobody has explained where all their cash disappeared to.

est31 6y ago
They can still start doing it.
dathinab 6y ago
> Nobody has explained where all their cash disappeared to. As a non profit organization they had to inform certain institutions about it. Just because it's not publicum didn't mean it's mismanaged. Through way to high salaries are sadly quite typical for this kind of organizations. (Kind=Npo which "gets" large amounts of money each year)

redis_mlc 6y ago

> This sounds like a rather short-sighted decision It wasn't shortsighted at all ... it was a ruse.

jandrese 6y ago

Its nonsensical. They get almost all of their funding from one source, which they say is a bad idea even though the income stream is very reliable for the foreseeable future. So their plan is to get rid of it and replace it with...what exactly? Donations? Some other kind of industry that they have not mentioned yet? The plan seemed to start and end with selling off their primary revenue stream.

scatters 6y ago
Assuming it was sold for what it was worth, the selling price could have been used as an endowment to purchase investments with a similar cashflow/risk profile but greater diversification so lesser risk overall. This is pretty basic economics: the value of an investment is the NPV of its future cashflows.
- tw04 6y ago
  What possible investment could ever match the risk:return of .org and where do I sign up? That is about the most risk free/cash positive investment in the history of mankind. Short of cornering the worldwide market on oxygen you aren't going to find a better investment.
  - dathinab 6y ago
    The .org contract ends in 2029! No guarantees that it will be renewed.
    - trianglem 6y ago
      That is still like having a golden goose for nearly a decade.
    - felipelemos 6y ago
      From article: "One interesting fact about these contracts is that they are effectively perpetual: the contracts themselves are for quite long terms and registry agreements typically provide for automatic renewal except under cases of significant misbehavior by the registry. In other words, this is a more or less permanent claim on the revenues for a given TLD."

donmcronald 6y ago

I don't think anyone cares about ISOC beyond them having control of .org. Really, what do they do? By selling to Ethos, they'd get out of the public's purview. Then they could take the billion dollars and give contracts "to better the internet" to friends, family, and relatives. Free money!

fanf2 6y ago
ISOC provides financial backing for the IETF and the RFC Editor, and does a bunch of lobbying and Internet growth/promotion projects.