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Is Verisign .web applicant’s secret sugar daddy?

Kevin Murphy, July 14, 2016, 18:24:37 (UTC), Domain Registries

The fiercely contested .web gTLD is being forced into a last-resort auction and some people seem to think a major registry player is behind it.

Two .web applicants — Radix (pdf) and Schlund (pdf) — this week wrote to ICANN to demand that the .web auction, currently planned for July 27, be postponed.

They said the sale should be delayed to give applicants time “to investigate whether there has been a change of leadership and/or control” at rival applicant Nu Dot Co LLC.

Nu Dot Co is a new gTLD investment vehicle headed up by Juan Diego Calle, who launched and ran .CO Internet until it was sold to Neustar a couple of years ago.

I gather that some applicants believe that Nu Dot Co’s .web application is now being bankrolled by a larger company with deeper pockets.

The two names I’ve heard bandied around, talking to industry sources this week, are Verisign and Neustar.

Nobody I’ve talked to has a shred of direct evidence either company is involved and Calle declined to comment.

So is this paranoia or not?

There are a few reasons these suspicions may have come about.

First, the recent revelation that successful .blog applicant Primer Nivel, a no-name Panama entity with a Colombian connection, was actually secretly being bankrolled by WordPress, has opened eyes to the possibility of proxy bidders.

It was only after the .blog contention set was irreversibly settled that the .blog contract changed hands and the truth become known.

Some applicants may have pushed the price up beyond the $19 million winning bid — making the rewards of losing the private auction that much higher — had they known they were bidding against a richer, more motivated opponent.

Second, sources say the .web contention set had been heading to a private auction — in which all losing applicants get a share of the winning bid — but Nu Dot Co decided to back out at the last minute.

Under ICANN rules, if competing applicants are not able to privately resolve their contention set, an ICANN last-resort auction must ensue.

Third, this effective vetoing of the private auction does not appear to fit in with Nu Dot Co’s strategy to date.

It applied for 13 gTLDs in total. Nine of those have already gone to auctions that Nu Dot Co ultimately lost (usually reaping the rewards of losing).

The other four are either still awaiting auction or, in the case of .corp, have been essentially rejected for technical reasons.

It usually only makes sense to go to an ICANN last-resort auction — where the proceeds all go to ICANN — if you plan on winning or if you want to make sure your competitors do not get a financial windfall from a private auction.

Nu Dot Co isn’t actually an operational registry, so it doesn’t strictly have competitors.

That suggests to some that its backer is an operational registry with a disdain for new gTLD rivals. Verisign, in other words.

Others think Neustar, given the fact that its non-domains business is on the verge of imploding and its previous acquisition of .CO Internet from Calle.

I have no evidence either company is involved. I’m just explaining the thought process here.

According to its application, two entities own more than 15% of Nu Dot Co. Both — Domain Marketing Holdings, LLC and NUCO LP, LLC — are Delaware shell corporations set up via an agent in March 2012, shortly before the new gTLD application filing deadline.

Many in the industry are expecting .web to go for more than the $41.5 million GMO paid for .shop. Others talk down the price, saying “web” lacks the cultural impact it once had.

But it seems we will all find out later this month.

Responding to the letters from Schlund and Radix, ICANN yesterday said that it had no plans to postpone the July 27 last-resort auction.

All seven applicants had to submit a postponement form by June 12 if they wanted a delay, ICANN informed them in a letter (pdf), and they missed that deadline.

They now have until July 20 to either resolve the contention privately or put down their deposits, ICANN said.

The applicants for .web, aside from Nu Dot Co, are Google, Donuts, Radix, Schlund, Web.com and Afilias.

Due to a string confusion ruling, .webs applicant Vistaprint will also be in the auction.

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Comments (8)

  1. Donnym says:

    I believe when .web finally comes out it will put the nail the coffin for future extensions. IMO

    • Chris Rice says:

      Donnym,

      I still believe nGTLDs will ultimately succeed but I think it was a mistake on Frank Schilling’s part to put so much weight behind .WEB.

      It means almost the exact same thing as .NET but is launching after .NET is already established.

      – .COM is seen as a generic extension and is not limited to people and businesses focused on WEBsites or the interNET.

      – I understand that every company with an online presence probably has a WEBsite hosted on the interNET but again, if it didn’t work for .net, I don’t think it will work for .web.

      – Chris

  2. Rubens Kuhl says:

    The trend was Google to accept going to private auction only when they opt not to fight for the TLD… Radix and Schlund already made clear that were more willing to get some money for losing it than fighting for it. Donuts and Afilias are usually more of sharp shooters than willing to make a blast, so this is likely to be a contention between the sugar daddy, whoever that might be, and Web.com.

  3. YamadaMedia says:

    I’d be surprised if Google didn’t put up a large amount of money bidding for .WEB when it comes down to it. They are trying to gain a foothold into the registrar market with Google Domains. Controlling the backend for .WEB would make sense for gaining domain market share and appealing to small businesses.

    Perhaps Google is the secret sugar daddy? 🙂

  4. 2 years ago, during a one-off paid consulting session, I advised 1 client to go after .WEB as vigorously as possible. Haven’t spoken to that client at all in the 2 years since, nor do I expect to advise them in the future.

    I have no idea whether they’ll follow my advice or whether they’d win in any case. And I have no financial interest in the outcome. But I do know they’re in the running, and I’m curious to what extent they were listening.

    My client was neither Neustar nor Verisign, and I have no knowledge of whether those 2 companies are pursuing .WEB.

    • Rainmaker says:

      If I were your client I would like you to keep completely quiet about me and what we discussed. But maybe that wasnt included in your fee?

      • @Rainmaker,

        This client asked for my opinion on public topics where I’ve expressed the same opinion publicly before and since. And I’m certainly under no obligation to suppress my own opinion.

        Exactly nothing is being disclosed about the client’s circumstances or plans. In fact, I know scarcely anything about those. They paid to listen and said precious little. If I were divulging private secrets, then I’d be abusing a client’s trust. As I’m not, I’m not.

  5. Rubens Kuhl says:

    We have just passed the auction deposit deadline. Besides one already withdrawn app from Vistaprint (they have another), all others seem to be still in game.

    But since there is a cap for deposits at $2m, which allows not only bids of $20m but any bid, applicants that made a $2m deposit now have a week to consider if it’s worth $20m, $50m, $200m…

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