According to a new post on Circle ID, ICANN lost $4.6 million last year in the stock market, which the author’s post points out is equivalent to its fee ($.20) on 23 million domain registrations.
How did this happen you ask.
Well basically, when it was formed in 1998, ICANN was allowed to set up “reasonable reserves for future expenses and contingencies reasonably related to the legitimate activities of the Corporation”.
In 2002, ICANN proposed having a $10 Million dollar reserve.
By the 2007-2008 budget year, ICANN’s reserve grew to a staggering $25 Million.
That’s $25 Million in cash, over and above operating expenses.
Profit if you will.
Apparently, the $25 Million sat in cash in money markets accounts, until November 2007, when ICANN decided to “invest it wisely”, according to a quote in the post, and in fiscal year 2008, ICANN bought $16.5 Million in Bonds and $8.5 Million in stocks of public companies.
Using ICANN own documents the author concludes that by the end 2008 ICANN lost $4.6 Million of the previous $25 Million reserve.
The author makes a great point, “If they could afford to lose $4.6M from their reserves, why did they collect it from us in the first place?”
ICANN is a non-profit corporation, which like all non-profits, are suppose to collect fees only necessary to perform its non-profit mission and provide services required to fulfill that mission
A non-profit can and should have a reasonable reserve considering its budget in case its revenue suddenly declines.
However, once a non-profit becomes highly profitable, it needs to cut the fees it collects.
Since all of ICANN fees come from us, domain holders, their money is our money and they just lost a lot of it.
For example, my share of ICANN fees amount to $15,000 a year. If they are running at a huge profit they could, and should have cut their fees, thereby saving me thousands of dollars a year.
I can lose my own money in the stock market, i don’t need their help.
Two questions come to my mind immediately.
How much profit (cash) would ICANN have kept building up assuming the cash stayed in money markets?
I mean would they have stopped at $30 Million, $40 Million, $50 Million before saying, I think we have enough money and can cut fees?
Second, wouldn’t you love to know the actual public companies ICANN bought stock in?
VeriSign, Google, Yahoo, Tucows?
Isn’t there a conflict of interest if ICANN bought stock in company they directly or indirectly regulate?
I guess now I have a third question, what the hell is going on here?
A few weeks ago I wrote a post asking if ICANN Is In It For The Money, especially in light of allowing an unlimited number of $185,000 applications for the proposed extensions
A few days after that, a representative of ICANN responded to the post assuring myself and other readers that they are not in it for the money.
It now appears I was right the first time.
ICANN is in it for the money
And there losing it.