23 votes

Ethos Capital paid $1.135 billion for the acquisition of Public Interest Registry (.org)

5 comments

  1. [3]
    spit-evil-olive-tips
    Link
    This smells like some unbelievably ridiculous bullshit. So the argument is, they made money from selling .org domains. Not a lot, but a decent amount. And now they're freed from the hassle of...

    This smells like some unbelievably ridiculous bullshit.

    This funding is sufficient to provide the Internet Society with broadly equivalent annual earnings we currently receive from PIR. And through responsible, well managed investment, we believe this fund will provide a comparable level of funding to the Internet Society in perpetuity.

    So the argument is, they made money from selling .org domains. Not a lot, but a decent amount. And now they're freed from the hassle of managing .org, but with the same revenue stream they had before. And that revenue stream will come from...taking the $1.1 billion the private equity firm just paid them and re-investing it in the stock market!

    If you have $1.1 billion to invest, you don't just open a Charles Schwab account...you hire a private equity firm. So Ethos Capital, or some other money manager, will also take a cut of that new endowment (a common setup for this is referred to as "2 and 20" because it's 2% of the total assets under management plus 20% of the investment profits)

    This also means that Ethos Capital must have a plan to increase the revenues of selling .org domains. If they thought its revenues would remain flat, they would have just taken their $1.1 billion and invested it in the market, which apparently generates the same revenue as the previous .org setup did.

    21 votes
    1. pseudolobster
      Link Parent
      Preface: I've been drinking tonight This is the kind of shit that makes my blood boil when I'm talking to economics majors. They talk about how value is created, it's not a zero-sum game, yadda...

      Preface: I've been drinking tonight

      This is the kind of shit that makes my blood boil when I'm talking to economics majors. They talk about how value is created, it's not a zero-sum game, yadda yadda, we can suck billions of dollars out of nothing while creating nothing, without impacting the core of what created the value in the first place. It's just not fucking possible. Give your fucking head a shake. Get your fucking heads out of your asses, people. This is already a business built on rent-seeking, it's already making constant money out of nothing, you just need to maintain the fucking thing. It's meant to be non-profit, you're not supposed to gamble with its futures. You're not happy that you've got a money tree that only pays a million bucks a year, you expect that to continue to grow, producing more and more profits every quarter? And there'll be no downsides to this approach, ever? Jesus fucking christ people. This is meant to be a pillar of the internet. A structural component to the largest collaborative project ever created. And you're not happy that it's consistently making the same amount of money each year, you expect you can use it as leverage to become infinitely rich? Fucking hell.

      19 votes
    2. MimicSquid
      (edited )
      Link Parent
      Ethos Capital has promised that they won't raise the rate by more than 10% a year, which (even if they keep said promise) is solidly more than the average improvement in the stock market and is...

      Ethos Capital has promised that they won't raise the rate by more than 10% a year, which (even if they keep said promise) is solidly more than the average improvement in the stock market and is also absolutely consistent. This 1.1 billion will pay off in spades, because .org is never going to go away. They'll be making money off of this for as long as websites are displayed how they are right now, with no need to innovate or put any effort in.

      11 votes
  2. MimicSquid
    Link
    I'm sure they aren't going to attempt to recoup that investment from .org holders. Certainly not. They won't raise rates at at least the maximum they promised forever, of course not. And I have a...

    I'm sure they aren't going to attempt to recoup that investment from .org holders. Certainly not. They won't raise rates at at least the maximum they promised forever, of course not. And I have a bridge to sell you, as well.

    15 votes
  3. admicos
    Link
    So... Hold up. Is buying the entire .org TLD cheaper than Minecraft? (MS bought MC for about 2.5ish billion$) I'm speechless... Just... Wow...

    So... Hold up.
    Is buying the entire .org TLD cheaper than Minecraft?
    (MS bought MC for about 2.5ish billion$)

    I'm speechless... Just... Wow...

    10 votes