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Verisign warns about Chinese .com boom

Kevin Murphy, November 24, 2015, Domain Registries

Verisign has warned investors that the current boom in .com sales is largely coming from Chinese domainers and may not be sustainable.

The company has added an unprecedented 4.1 million domain in .com and .net so far during the fourth quarter.

“While there continues to be demand for domain names globally, the recent increased volume for Verisign’s top level domains, as well as top level domains of other registries, during the fourth quarter is coming largely through registrars in China,” the company said in a Securities and Exchange Commission filing.

It listed several factors that are likely responsible for the sudden uptick, but warned that renewal rates are typically not great.

In the past, Verisign has discussed many factors that affect the demand for domain names, including, but not limited to economic, social, and regulatory conditions, Internet adoption, Internet penetration, and increasing e-commerce. In addition to these factors affecting demand, Verisign is also evaluating additional potential factors unique to China that may also be responsible for the recent increased volume of new registrations in China.

In no particular order, these potential factors, or combination of factors, could include, but may not be limited to, government initiatives in China to develop their online economy such as ‘Internet Plus;’ registry and registrar regulatory requirements; cultural influences such as the popularity of numeric domain names; increasing competition amongst Chinese registrars; potential increases in domain name investment activity; and recent capital markets volatility and access to capital in China.

Verisign cannot predict if or how long this increased pace of gross additions will continue and we cannot at this time predict what the renewal rate for these domain names will be. Verisign has noted in the past that renewal rates for domain names registered in emerging markets, such as China, have historically been lower than those registered in more developed markets.

It’s difficult to imagine that Chinese investors have managed to find four million unregistered domains worth keeping.

There are currently 123,497,852 domains in the .com zone file, according to Verisign’s web site.

Verisign is not the only registry that appears to be benefiting from a deluge of registrations from China. has seen over 440,000 domains added to its .xyz zone file in the last three weeks, bringing its total to over 1.5 million, which appear to be largely coming through Chinese registrars.

Verisign v XYZ judge confirms both companies suck

Kevin Murphy, November 21, 2015, Domain Registries

Verisign and have both come out of a US lawsuit looking like scumbags.

Explaining his dismissal of Verisign’s false advertising lawsuit against .xyz registry, Virginia judge Claude Hilton today said that’s statements about its registration numbers were “verifiably true”.

At the same time, he confirmed that they came about as a result of a bullshit deal with Network Solutions to bolster .xyz’s launch numbers.

The judge’s ruling confirms for the first time the financial details of the deal between XYZ and (Network Solutions) that saw .xyz’s registration volume rocket in its first few weeks of general availability. He wrote: purchased 375,000 domain names for a price of $8 each totaling $3 million dollars. In exchange, XYZ purchased advertising from in the form of 1,000 impressions for $10 each, at a total cost of $3 million dollars. Instead of cash exchanging hands, advertising credit was given to XYZ and the .xyz domain names were given to, who subsequently gave them away as free trials to their subscribers.

In other words, XYZ bought $10,000 of advertising for $3 million and paid for it with $3 million of free .xyz domains — 375,000 of them.

That bogus deal enabled XYZ to report big reg volume numbers without actually, legally, lying,

“The statements regarding Defendants’ revenue and number of registrations are statements of fact that are verifiably true,” the judge wrote.

When the Defendants [] stated they were a market leader in new TLD’s and that they had the most new registrations than any other TLD, they were basing that information off of an accurate zone file. Further, the zone file confirms that there are over 120 million .com registrations and one {1) million .xyz registrations. These statements are also true.

The judge said he was dismissing the suit not just because XYZ wasn’t lying, but also because Verisign couldn’t show that it had been harmed.

The number of .com registrations has actually been going up, he noted.

Much of Verisign’s complaint centered on this ad:

Verisign said the ad lied about the availability of .com domains, which XYZ denied.

The judge said:

The video posted to YouTube is puffery and opinion. It displays no actual domain names, and communicates a subjective measure of value and superiority, not capable of being proven false.

“Puffery” is a term with legal weight in false advertising cases under US law. It basically means that advertisers are allowed to exaggerate. XYZ had in fact used the “puffery” defense.

The judge seems to have relied heavily on zone file analysis to reach his conclusions. He wrote.

according to Plaintiff’s [Verisign’s] own data, .com names are largely unavailable. In a given month, Plaintiff reports that it receives about two (2) billion requests to register <.com> domain names, yet fewer than three (3) million are actually registered.

I believe that “two billion” number refers to how many “attempted adds” Verisign gets every month for .com domains, as reported in its monthly reports with ICANN.

That number would include every automated attempt to register a dropping domain by every registrar.

It’s not a reflection of how many actual human beings attempt and fail to register .com domains and, in my view, it’s worrying that the judge took it to mean that.

In summary, the lawsuit managed to unearth the dirty reality behind XYZ’s launch “success”, whilst also making Verisign look like a petty, petulant, child.

Everybody loses.

Except the lawyers, obviously, who have been paid millions.

ICANN reveals 12 more data breaches

Kevin Murphy, November 20, 2015, Domain Registries

Twelve more new gTLD applicants have been found to have exploited a glitch in ICANN’s new gTLD portal to view fellow applicants’ data.

ICANN said last night that it has determined that all 12 access incidents were “inadvertent” and did not disclose personally identifiable information.

The revelation follows an investigation that started in April this year.

ICANN said in a statement:

in addition to the previous disclosures, 12 user credentials were used to access contact information from eight registry operators. Based on the information collected during the investigation it appears that contact information for registry operators was accessed inadvertently. ICANN also concluded that the exposed registry contact information does not appear to contain sensitive personally identifiable information. Each of the affected parties has been notified of the data exposure.

The glitch in question was a misconfiguration of a portal used by gTLD applicants to file and view their documents.

It was possible to use the portal’s search function to view attachments belonging to other applicants, including competing applicants for the same string.

Donuts said in June that the prices it was willing to pay at auction for gTLD string could have been inferred from the compromised data.

ICANN told compromised users in May that the only incidents of non-accidental data access could be traced to the account of Dirk Krischenowski, CEO of dotBerlin.

Krischenowski has denied any wrongdoing.

ICANN said last night that its investigation is now over.

English beats Portuguese in $2.2m .hotels auction

Kevin Murphy, November 19, 2015, Domain Registries has won the right to operate .hotels after an auction concluded a protracted fight over the gTLD.

In an ICANN-run auction yesterday, prevailed with a winning bid of $2.2 million.

Its sole competitors was Travel Reservations (formerly Despegar Online), which had applied for the Portuguese word .hoteis.

In 2012, a String Similarity Review panel concluded that .hotels and .hoteis look too similar to coexist, due to the likelihood of confusion between I and l in sans-serif fonts.

Neither applicant agreed with that decision, knowing that it would result in a expensive auction, and filed a Request for Reconsideration and then, in March 2013, an Independent Review Process complaint.

After two years, it lost the IRP. But the panel said it had “legitimate concerns” about the fairness of the SSR process and ordered ICANN to pay half of its costs.

Now, has had to fork out another $2.2 million for the string.

That’s not particularly expensive as ICANN-auctioned gTLDs go. Eight of the 13 other strings ICANN has auctioned have sold for more.

ICANN’s auction proceeds to date now stands at $63,489,127, which is being held in a separate bank account for purposes yet to be determined.

.pro now open to all

Kevin Murphy, November 16, 2015, Domain Registries

Afilias today made the .pro gTLD available to anyone, regardless of their professional qualifications.

The previously restricted TLD was able to do so as a result of its six-week-old contract with ICANN, which loosened many of the conditions former registry RegistryPro originally agreed to when the TLD was delegated 13 years ago.

Under the original Registry Agreements, RegistryPro — since acquired by Afilias — had to verify the professional credentials of potential registrants.

Now that .pro has been brought under something that looks a lot like the 2012 new gTLD RA, it’s pretty much a free-for-all.

The registry said in a press release:

despite demand from registrants and registrars alike, .PRO names have historically been denied to professionals from a wide range of fields such as policemen, firefighters, journalists, programmers, artists, writers, and many others.

In my personal experience, it has been possible to register a .pro domain without providing credentials. I’ve been paying for one for a few years, though I’ve been unable to actually use it.

The gTLD was approved in the original, first round of new gTLD applications, back in 2000.

Part of the original deal was that it would be restricted to three classes of professions — lawyer, doctor, accountant — and only available to buy at the third level.

The third-level limitation was lifted many years ago, but .pro continued to be restricted to people who could show a credential.

However, even as recently as 2012 then-RegistryPro-CEO Karim Jiwani was telling DI that the secret to growth was more restrictions, not less.

He’s no longer with the company.

.pro’s registration numbers have have been suffering the last few years.

The registry peaked at roughly 160,000 names in July 2012, and has been on a downward track ever since. It started this July with about 122,000 registrations.

As part of its new deal with ICANN, Afilias no longer has price caps — previously set around .com prices — and has had to implement some of the provisions of the new gTLD Registry Agreement.

One such provision is the Uniform Rapid Suspension policy, which continues to cause controversy in the industry.