The fallout from the new rules surrounding Australian domain names has already started, even though the rules do not begin until April.
Webcentral announced on Friday it was exiting its Netalliance "drop catching" business, which it described as "the purchasing of domains if they are not renewed by the domain owner and then on selling it to someone else or back to the original owner". Naturally, they have left out the inconvenience and inflated prices when a customer forgets to manually renew a domain, versus the automated squatters swooping in, as being a factor in their decision.
"It is expected that this practice will be redundant in the near future once (auDA), the domain governing body makes much needed changes to the industry," the company said.
For selling off its half-share of Netalliance, Webcentral has walked away with AU$500,000 in cash. Netalliance has less than AU$0.5 million in total revenue and around AU$100,000 in profit each year, of which half went to Webcentral.
"Our strategy is to focus on our core business, improve our customer experience, and simplify the business structure to drive profitability," Webcentral and 5G Networks managing director Joe Demase said.
"We have identified a number of quick wins to optimise our platform assets and provided the team with clear direction of our roadmap for the future."
See also: New .au domain namespace rules come into effect April 12
In the new rules, domain name monetisation by way of domain parking and affiliate sites expressly for the purpose of warehousing and transferring the domain to another will be forbidden on the org.au, asn.au, id.au, and edu.au namespaces.
Webcentral was recently taken over for approximately AU$19 million by 5G Networks, which involved a bidding war with Web.com and a delay from the Australian Takeovers Panel.
The formation of Webcentral occurred after Arq Group, which was formerly known as Melbourne IT, sold its enterprise services division for AU$35 million, and the company needed a home for the Arq SMB remnants.
Last week, 5G Networks announced that it expanded its data centre footprint into Brisbane, completing a AU$1.1 million lease agreement that will see it operate the 3MW Fortitude Valley facility.
"We are really excited to be exploiting our advantage of being a [data centre] operator and fibre network owner, I haven't seen rack space and dark fibre product bundling from one provider before, but this is what our customers are asking for," Demase said.