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Verisign gets approval to sell O.com for $7.85

Kevin Murphy, March 7, 2019, 16:46:09 (UTC), Domain Registries

ICANN is to grant Verisign the right to sell a single-character .com domain name for the first time in over 25 years.
The organization’s board of directors is due to vote next Thursday to approve a complex proposal that would see Verisign auction off o.com, with almost all of the proceeds going to good causes.
“Approval of Amendment to Implement the Registry Service Request from Verisign to Authorize the Release for Registration of the Single-Character, Second-Level Domain, O.COM” is on the consent agenda for the board’s meeting at the conclusion of ICANN 64, which begins Saturday in Kobe, Japan.
Consent agenda placement means that there will likely be no further discussion — and no public discussion — before the board votes to approve the deal.
Verisign plans to auction the domain to the highest bidder, and then charge premium renewal fees that would essentially double the purchase price over a period of 25 years.
But the registry, already under scrutiny over its money-printing .com machine, would be banned from profiting from the sale.
Instead, Verisign would only receive its base registry fee — currently $7.85 per year — with the rest being held by an independent third party that would distribute the funds to worthy non-profit causes.
ICANN had referred the Verisign proposal, first put forward in December 2016, to the US government, and the Department of Justice gave it the nod in December 2017.
There was also a public comment period last May.
The request almost certainly came about due to Overstock.com’s incessant lobbying. The retailer has been obsessed with obtaining o.com for well over a decade, but was hamstrung by the legacy policy, enshrined in the .com registry agreement, that forbids the sale of single-character domains.
Whoever else wants to buy o.com, they’ll be bidding against Overstock, which has a trademark.
It’s quite possible nobody else will bid.
When Overstock briefly rebranded as O.co several years ago — it paid $350,000 for that domain — it said it saw 61% of its traffic going to o.com instead.
All single-character .com names that had not already been registered were reserved by IANA for technical reasons in 1993, well before ICANN took over DNS policy.
Today, only q.com, z.com and x.com are registered. Billionaire Elon Musk, who used x.com to launch PayPal, reacquired that domain for an undisclosed sum in 2017. GMO Internet bought z.com for $6.8 million in 2014.
With the sale of o.com now a near certainty, it is perhaps only a matter of time before more single-character .com names are also released.
No gTLD approved after 2012 has a restriction on single-character domains.
As a matter of disclosure: several years ago I briefly provided some consulting/writing services to a third party in support of the Verisign and Overstock positions on the release of single-character domain names, but I have no current financial interest in the matter.

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Comments (36)

  1. Andrew says:
    March 7, 2019 at 5:41 pm

    OK, so what’s Verisign’s angle here? Nudge toward premium pricing in the future? Publicity? Sell the other single letters in the future?

    Reply
  2. John Berryhill says:
    March 7, 2019 at 5:51 pm

    “Whoever else wants to buy o.com, they’ll be bidding against Overstock, which has a trademark.”
    As do Oakley and Oprah, along with a number of lesser-known entities.

    Reply
    • Kevin Murphy says:
      March 7, 2019 at 10:57 pm

      Do you think any of these parties might bid?

      Reply
    • Rob says:
      March 8, 2019 at 1:56 am

      But honestly, isn’t the trademark thing a red herring ?
      I suspect it would be near impossible for someone to take it with a UDRP given how it is being released. I can’t imagine anyone paying a lot and then using it in violation of Overstocks trademark rights.
      And even if some rogue UDRP panelist found bad faith, at this price, it would just end up in a real court.

      Reply
  3. Michael Castello says:
    March 7, 2019 at 6:42 pm

    It’s a great symbol and visual goldmine but it has an issue like most single letters and numbers with the radio test. Many would spell it as OH. Same with the number 1 which many would spell as ONE. That does matter although most of their direct traffic will come from TV advertising and O.com will look great. Maybe the Olympics will also want a shorter name.

    Reply
    • Kevin Murphy says:
      March 7, 2019 at 7:24 pm

      The radio test issue is one I’d genuinely never considered before. Food for thought, thanks!

      Reply
    • Snoopy says:
      March 7, 2019 at 8:59 pm

      It is not a great name for actual usage, similar issues to o.co and ww.com, but not as severe as o.co which had a confusing term and a confusing extension. They will lose sales if they use it.

      Reply
  4. Snoopy says:
    March 7, 2019 at 8:32 pm

    Another good distraction for Overstock as they slip into the abyss, how much time and money will they waste chasing this?

    Reply
  5. Adam says:
    March 7, 2019 at 11:00 pm

    I suspect a pile of domain investors will also bid. Where’s the auction link ?

    Reply
  6. John says:
    March 8, 2019 at 1:27 am

    The real serious news here is that premium renewals would even be allowed.
    That’s just wrong, and a slippery slope and Pandora’s box that even Darth Vader would be shocked by.

    Reply
  7. Kurt says:
    March 8, 2019 at 4:12 am

    In 2000 and “0-something” (2005, 2006?), Overstock CEO Patrick Byrne and some of his staff arrived at my ICANN office in Marina del Rey.
    Patrick wanted to buy o.com. He sat across from me and slid a check for $1,000,000 payable to ICANN across my desk. (It was made clear that the offer intended to pay for the name and fund the non-profit ICANN in a legal and ICANN-compliant way, with appropriate fees flowing to parties in accordance with ICANN contracts.)
    In those days, ICANN was BROKE. We were in the middle of negotiating contract amendments with registrars and registries that would eventually put ICANN on stable footing, but at that time, we were hand-to-mouth.
    I mumbled something about the multi-stakeholder model, the prohibition on single-letter names and the word “policy,” and pushed the check back. I must have sounded pretty stupid to him. If my memory serves me correctly, Patrick offered $2 million.
    In the months that followed, a community discussion started on the topic but you can imagine how that went. A few contracted parties suggested single-letter auctions to offset hikes or potential hikes in registrant fees, which seemed like a great idea. But no one liked the idea of ICANN having access to “millions.”
    I never got a Christmas card from Patrick or nothing.

    Reply
    • shaytaan says:
      March 8, 2019 at 2:52 pm

      @Kurt did you at least buy bitcoin when it was cheap? Since you’ve been following Byrne’s career all these years I’m assuming you would have heard about btc earlier than most people.

      Reply
    • Rob says:
      March 8, 2019 at 4:33 pm

      Maybe you will get one this year !

      Reply
  8. JS says:
    March 9, 2019 at 1:35 am

    I’m not too sure how the proposal got to bypass the work by IDNGWG. As per the IDN implementation guidelines, the domain cannot exist without first removing its IDN ‘mirror’ domain (whole-script confusable string) from the namespace.

    Reply
    • B says:
      March 9, 2019 at 9:05 pm

      Something is rotten in the state of Denmark.
      (Hamlet 1.4, Marcellus to Horatio)
      Will the wrongs be compounded? Some of us own legal & valid IDN domains NOW, generating earnings / publicity, in areas where this new o.com promises to sow confusion and even threatens our property. There’s no inherent superiority of English / Latin script to other languages or character strings. It’s improper that a now-nonexistent domain be granted precedence when we are legally registered and operational FIRST in areas and markets where there’s no trademark infringement.

      Reply
  9. William says:
    March 11, 2019 at 9:37 pm

    Kurt, John Berryhill; and all those Likeminded Concerned With the Integrity of the Internet:
    I am William Blackwood, Vice President of First Place Internet, Inc. (First Place). In August of 2016, I met in person with VeriSign’s Pat Kane and Tom Indelicarto at VeriSign headquarters in Virginia. ICA General Counsel Phil Corwin was also present. Both Pat Kane and Tom Indelicarto were cognizant of First Place’s interest in SCDNs due the services offered by First Place under its “1” trademark. Nevertheless, Pat Kane told me he did not want to discuss any issues regarding SCDNs. He limited discussion to other issues such as IDNs. Unlike Kurt’s described experience regarding his Overstock meeting though, I did not bring a check to my VeriSign meeting. I brought the truth instead.
    {At 2015-12-09T00:08:47Z, employing its validated Trademark Clearinghouse SMD file, First Place successfully registered VeriSign’s Katakana (Japanese) http://1.コム/ (1.xn--tckwe) IDN domain name in VeriSign’s Sunrise Period. Later, at 2018-07-31T14:29:51Z, employing its validated Trademark Clearinghouse SMD file for its U.S. Trademark # 1102618, First Place successfully registered VeriSign’s Hebrew o.קום (o.xn--9dbq2a) IDN domain name in VeriSign’s Sunrise Period}
    Of course, at the time of my meeting, I had no idea that Overstock had been pushing so hard for years to obtain the O.com domain. I had no idea that Overstock had allegedly offered ICANN $1 million and then $2 million for the right to register this single domain. Perhaps naively, I came armed solely with arguments I thought were persuasive enough to justify the registration of SCDNs.
    At a minimum, Kurt’s “offer” from Overstock coupled with VeriSign’s decision to limit its RSEP solely to O.com casts a menacing shadow of potential impropriety. Overstock’s campaign to persuade ICANN to auction off SCDNs (specifically O.com) as a means of raising revenues is documented. It surely is no coincidence that Verisign and ICANN have now agreed to such an auction, albeit one in which proceeds will allegedly go to those acting in the public interest. VeriSign’s O.com RSEP, combined with its lack of any Rights Protection Mechanisms, is thus a slap in the face of Intellectual Property owners who have worked properly within the system to develop and protect brands that could be subject to SCDN registrations. The taint of impropriety obviously harms invested owners of Intellectual Property who fairly competed and successfully won in registering IDN .com SCDNs in accordance to VeriSign’s unambiguous commitments.1,2, 3
    VeriSign’s O.com auction also runs afoul of its Cooperative Agreement because the U.S. Government (USG) Contract prohibits VeriSign from charging registrants more than its fixed price cap. The headline that VeriSign would only retain $7.85 from the O.com auction is misleading and deceptive. The letter and the spirit of VeriSign’s exclusive USG contract is unambiguously clear – To protect the public from an unrestrained monopoly.
    VeriSign previously made unambiguous commitments to shareholders regarding the protection of Intellectual Property rights2. This Corporate Commitment further buttressed VeriSign’s longstanding commitments regarding IDN registrants1, as well as ICANN’s IPC Recommendation for reserved .com SCDNs5.
    VeriSign must remove even the taint of impropriety through the following:
    1. Withdrawing and replacing the current O.com RSEP with an amended version inclusive of ICANN’s own IPC-recommended Rights Protection Mechanism (RPMs) requirements including Sunrise and Priority Access.
    2. Applying these RPMs equally in the future to all reserved .com SCDNs.
    3. Staying within the mandated cost-restraints applicable to VeriSign.
    Anything less is a failure of multi-stakeholder governance and blame for which falls squarely upon VeriSign and ICANN.
    William
    1 https://blog.verisign.com/domain-names/update-on-verisigns-idn-implementation-plans/
    2 https://seekingalpha.com/article/2002541-verisign-management-discusses-q4-2013-results-earnings-call-transcript
    “Sterling P. Auty – JP Morgan Chase & Co, Research Division
    Just a quick follow-up on that line of conversation. Pat, you mentioned, to protect trademarks and the IDNs, that may take longer. I guess it was our understanding that there was that period of time that the trademark clearinghouse was supposed to do that. Are you saying that you’re doing something above and beyond what the trademark clearinghouse is doing?
    Patrick S. Kane
    Yes. Essentially I haven’t said that we’re doing something different, and because what we’re doing — we may have talked about this in previous calls, but the idea of applying for the transliterations of .com and .net, one of the benefits of that was to protect the applicant — or protect the registrant that has invested in .com today. So if there’s a transliteration of .com in Chinese, what we have proposed to do is to make certain that only the registrant that is — or if the registrant has already registered in .com, that they’re the only one that has the opportunity to register that domain name in the transliterated version for Chinese or for Hangul or for whatever TLD that we’ve operated. So that’s something that’s unique to what we’re doing within our applications. And so that’s an additional protection for intellectual property and trademarks”.
    3 https://domainnamewire.com/2013/07/14/verisign-reconfirms-idn-transliteration-plans-provides-more-details/
    4 https://www.icann.org/en/system/files/files/warren-to-board-28nov06-en.pdf
    5 https://mm.icann.org/pipermail/comments-o-com-single-char-10may18/2018q2/000022.html

    Reply
  10. B says:
    March 12, 2019 at 10:37 am

    The notes to your post recall how VeriSign effectively compromised rightsholders in both .com and IDN.com by making expansive assurances regarding the transliterations. “Verisign’s proposed approach means that the registrant for a second-level domain name in our IDN.IDN, IDN.com or IDN.net will have the sole right (subject to applicable rights protection mechanisms), but not be required to register that identical second-level domain in any of the top-level IDNs, .com or .net as applicable.” They largely avoided our strong resistance, but then implemented something else entirely – a deceit costly to many, especially as allowing IDN.IDN to anyone clearly diluted our IP (I spent $$$$ on defensive registrations).

    Reply
  11. B says:
    March 12, 2019 at 11:16 am

    We manage IDN .com SCDNs likely to be impacted if o.com is created & released. We’ve insufficient resources to fight VeriSign & ICANN, and in our opinion, each has low accountability. In our experience VeriSign has sought to be dismissive of rights-holders who are not mega-corporate. Perhaps we might expect this of a no-bid monopoly with annual revenues $1billion +. Please don’t crush us Mr. Megatron-Ltd

    Reply
  12. B says:
    March 12, 2019 at 1:00 pm

    We welcome William’s calling attention to Rights Protection. Verisign assures us “the Uniform Dispute Resolution Policy is available for any trademark-related disputes arising from the allocation of any name in the .COM namespace, including O.COM.” Could we be outmaneuvered? Sure! We’re very distant from the hobnobbing now taking place in Kobe, Japan at ICANN 64.

    Reply
    • Greg says:
      March 14, 2019 at 1:24 pm

      UDRP pertains to use of a domain name, not registration of a domain name. Not to mention, it’s a bit of a Johnny-come-lately remedy seeking to close a barn door after the non-profit horses have lit off for the hills with millions in ill-gotten gains.
      So, rather than just following through on what the claptrap they have foisted onto their diminutive so-called regulator, investors and analysts in quarterly earnings calls, and upon an unsuspecting public via their website, they instead want to offer knowingly for auction a domain name that a large publicly-traded corporation has lusted after for more than a decade – and if “Kurt” is to be believed may have offered inappropriate millions, at least once, in attempting to secure this domain name – secure an untold though likely substantial sum of money for unnamed non-profits while only keeping the allotted 30 pieces of silver – excuse me $7.85 – and this is somehow legit? This passes the sniff test? My stomach isn’t full of sake and Kobe beef, but I can smell the cow patties from the cheap seats.
      Then wronged parties are supposed to file a UDRP after the fact? After the dollars are spent? In any other scenario other than the phantasmagoria known as the DNS, this would be a matter for avenues far more serious than the civil arbitration represented by UDRP.
      Supposing this nonsense actually bears something other than a turd blossom, who refunds Overstock’s bid money if some other claimant wins and takes the domain? The unnamed non-profits?Verisign shareholders? Taxpayers? Unnamed unindicted co-conspirators from the missing 18 minutes in the Watergate tapes?
      It’s nearly unbelievable that serious people are even entertaining this fractured fairy tale that even a child would see through.

      Reply
  13. William says:
    March 13, 2019 at 2:32 pm

    First Place invested in VeriSign’s Hebrew o.קום domain name registration. VeriSign unambiguously committed:
    “Use Case No. 2: John Doe does not have a registration for an IDN.com second-level domain name. John Doe registers a second-level domain name in our Thai transliteration of .com but in no other TLD. That second-level domain name will be unavailable in all other transliterations of .com IDN TLDs and in the .com registry unless and until John Doe (and only John Doe) registers it in another .com IDN TLD or in the .com registry”.
    https://blog.verisign.com/domain-names/update-on-verisigns-idn-implementation-plans/

    Reply
  14. John says:
    March 14, 2019 at 1:16 am

    So nobody but Snoopy is going to say anything about allowing premium renewals for .com?

    Reply
    • B says:
      March 14, 2019 at 10:21 am

      Zak Muscovitch addressed this in the ICA public comment (see point 4):
      mm.icann.org/pipermail/comments-o-com-single-char-10may18/attachments/20180620/e569b0d0/ICACommentReO.comReleaseProposal-June202018-0001.pdf
      Others also worry / worried. ICANN response is Verisign itself will only realize the standard renewal fee.
      https://www.icann.org/en/system/files/files/report-comments-o-com-single-char-10aug18-en.pdf

      Reply
      • John says:
        March 14, 2019 at 2:57 pm

        Thanks for those links, I will examine them later.
        The issue is whether premium renewals are even allowed at all, and that they should not be, not who gets paid. Who gets paid means nothing, what matters is how it affects the public, and whether the arrangement is fair and just and right.
        A response like that by ICANN, if accurately paraphrased by you here which I assume to be the case, is just about the most unacceptable and biggest cop-out from such an important issue as one could ever imagine.
        I don’t care that the registry is not the one getting richer from allowing such premium renewals – I care that such a phenomenon is even being allowed at all, and that it precludes a vast multitude of people including me from having a shot at obtaining such a domain name and experiencing what those who already benefited from such opportunities in the past were able to do. And I think that accurately speaks for that same vast multitude of people as well, except of course the plutocrats and richest elite of this world.
        I would like to add that this is almost certainly one of the terrible consequences expected from the “transition” from US oversight, but in all candor there is so much corruption and plutocracy mentality in my own beloved country that I could see such an evil thing possibly being allowed here too anyway as well – though it shouldn’t be.
        So then to the richest go the remaining riches, and forget about how the Internet began with a decent measure of equality of opportunity for all both small and great.

        Reply
        • John says:
          March 14, 2019 at 3:02 pm

          And though I’m sure it doesn’t even need to be added – yes, that means the rich and famous Overstock company is NOT entitled to this domain, or any other rich and power “O” related entity, and every single person in the world as possible should have an equal chance of getting it and experiencing the benefit without reference to who has the deepest pockets, the same way every other great domain was originally created and obtained.

          Reply
  15. William says:
    March 18, 2019 at 4:25 pm

    In February 2018, First Place attempted to work with Overstock but Overstock was not interested.
    VeriSign offered opportunities to register “O” IDN .com SCDNs to anyone willing to purchase them, and despite First Place’s engagements with Overstock, Overstock neglected to register a VeriSign “O” IDN .com SCDN by July 31st 2018. Simultaneously, VeriSign maintained its IDN Implementation Plans including Use Case No 2. Further, VeriSign unambiguously reinforcement its commitments to .com IDN and .com registrants in its 2014 shareholder’s earnings call transcript.
    In July 2018, First Place fairly registered o.קום and First Place has the domain name in fair and proper use. Those lacking facts and foundations need to recognize an unfair O.com RSEP process. ICANN did not follow Bottom-Up Processes for VeriSign’s unprincipled O.com RSEP. Of significant note, in 2014 ICANN did follow Bottom-Up Processes in approving a Technical Bundle RSEP in order to avoid confusion and ensure rights consistent with VeriSign’s IDN Implementation Plans and its Use Case No 2 commitments: See https://www.icann.org/en/system/files/files/pir-request-21may14-en.pdf

    Reply
  16. B says:
    March 27, 2019 at 2:07 am

    The o.com unique release process hints of special treatment (as does Verisign’s no-bid .com monopoly) so we have persistent doubts & mistrust.
    We see possibly ominous ICANN interference with the legal status of some IDN single-character domains (see xn--c77c.com and xn--f77c.com with client Delete Renew Transfer Update Prohibited, from the Carian character set). Is the whole Carian script being quietly purloined? At least one Whois references ICANN EPP status codes, https://icann.org/epp and the domains now resolve to Bad Request – Invalid Hostname error pages on ICANN nameservers.
    Choosing the letter o.com to start seems indefensible: there’s natural conflict with zero, and reserved Latin / English single-letter and single-digit second-level domain names should more-reasonably launch from a.com

    Reply

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