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Google buys .app for over $25 million

Kevin Murphy, February 26, 2015, Domain Registries

The fiercely competed new gTLD .app has sold to Google for a record-breaking $25 million.

The company’s Charleston Road Registry subsidiary beat out 12 other applicants for the string, including Donuts, Amazon, Famous Four Media, Radix and Afilias.

The auction lasted two days and fetched a winning bid of $25,001,000, more than any other new gTLD to date.

The previous high is believed to be .blog, which I estimate sold for less than $20 million.

Because it was an ICANN-run “last resort” auction, all of the money goes into ICANN’s special auction proceeds fund, which previously stood at just shy of $35 million.

Previous ICANN auctions have fetched prices between $600,000 and $6,760,000.

Google originally proposed .app as a closed registry in which only Google and its partners could register names.

However, after the Governmental Advisory Committee pressured ICANN to disallow “closed generics”, Google changed its application to enable anyone to register.

Verisign sues .xyz and Negari for “false advertising”

Kevin Murphy, February 24, 2015, Domain Registries

Handbags at dawn!

Verisign, the $7.5 billion .com domain gorilla, has sued upstart XYZ.com and CEO Daniel Negari for disparaging .com and allegedly misrepresenting how well .xyz is doing.

It’s the biggest legacy gTLD versus the biggest (allegedly) new gTLD.

The lawsuit focuses on some registrars’ habit of giving .xyz names to registrants of .com and other domains without their consent, enabling XYZ.com and Negari to use inflated numbers as a marketing tool.

The Lanham Act false advertising lawsuit was filed in Virginia last December, but I don’t believe it’s been reported before now.

Verisign’s beef is first with this video, which is published on the front page of xyz.com:

Verisign said that the claim that it’s “impossible” to find a .com domain (which isn’t quite what the ad says) is false.

The complaint goes on to say that interviews Negari did with NPR and VentureBeat last year have been twisted to characterize .xyz as “the next .com”, whereas neither outlet made such an endorsement. It states:

XYZ’s promotional statements, when viewed together and in context, reflect a strategy to create a deceptive message to the public that companies and individuals cannot get the .COM domain names they want from Verisign, and that XYZ is quickly becoming the preferred alternative.

As regular readers will be aware, .xyz’s zone file, which had almost 785,000 names in it yesterday, has been massively inflated by a campaign last year by Network Solutions to push free .xyz domains into customers’ accounts without their consent.

It turns out Verisign became the unwilling recipient of gtld-servers.xyz, due to it owning the equivalent .com.

According to Verisign, Negari has used these inflated numbers to falsely make it look like .xyz is a viable and thriving alternative to .com. The company claims:

Verisign is being injured as a result of XYZ and Negari’s false and/or misleading statements of fact including because XYZ and Negari’s statements undermine the equity and good will Verisign has developed in the .COM registry.

XYZ and Negari should be ordered to disgorge their profits and other ill-gotten gains received as a result of this deception on the consuming public.

The complaint makes reference to typosquatting lawsuits Negari’s old company, Cyber2Media, settled with Facebook and Goodwill Industries a few years ago, presumably just in order to frame Negari as a bad guy.

Verisign wants not only for XYZ to pay up, but also for the court to force the company to disclose its robo-registration numbers whenever it makes a claim about how successful .xyz is.

XYZ denies everything. Answering Verisign’s complaint in January, it also makes nine affirmative defenses citing among other things its first amendment rights and Verisign’s “unclean hands”.

While many of Verisign’s allegations appear to be factually true, I of course cannot comment on whether its legal case holds water.

But I do think the lawsuit makes the company looks rather petty — a former monopolist running to the courts on trivial grounds as soon as it sees a little competition.

I also wonder how the company is going to demonstrate harm, given that by its own admission .com continues to sell millions of new domains every quarter.

But the lesson here is for all new gTLD registries — if you’re going to compare yourselves to .com, you might want to get your facts straight first if you want to keep your legal fees down.

And perhaps that’s the point.

Read the complaint here and the answer here, both in PDF format.

.xxx boss says new gTLD registries need to “wake up”

Kevin Murphy, February 23, 2015, Domain Registries

ICM Registry president Stuart Lawley may be just weeks away from launching his second and third gTLD registries, but that doesn’t mean he has a positive outlook on new gTLDs in general.

“I think people need to wake up,” he told DI in a recent interview. “If you do the math on some of these numbers and prospective numbers, it just doesn’t stack up for a profitable business.”

“The new ‘Well Done!’ number seems to be a lot less than it was six months ago or 12 months ago,” he said.

Lawley said he’s among the most “bearish” in the industry when it comes to new gTLD prospects. And that goes for ICM’s own .porn, .sex and .adult, which are due to launch between March and September this year.

While he’s sure they’ll be profitable, and very bullish on the search engine optimization benefits that he says registrants could be able to achieve, he’s cautious about what kind of registration volumes can be expected. He said:

If you add up everybody that has ever bought a .xxx name, including the Sunrise B defensives, we have got a target market of about 250,000 names. People to go back to and say, “Look, you still have a .xxx or you had a .xxx at some stage. Therefore, we think you may be interested in buying .porn, .sex or .adult for exactly the same reasons.”

So, our expectations to sell to a whole new market outside of those quarter of a million names is probably quite limited.

Lawley said that he believes that the relatively poor volume performance of most new gTLDs over the last year will cause many registrars to question whether it’s worth their time and money to offer them.

I can see why registrars can’t be bothered. How many of these am I going to sell? Am I going to sell two hundred of them? Am I going to make five dollars per name? That’s one thousand dollars. It’s not worth it to me to put in ten thousand dollars worth of labor and effort to make one thousand dollars in revenue. So, I think that’s a challenge that many of the small lone player TLDs may face.

Lawley said he’s skeptical about the ability of major portfolio players, such as Donuts, to effectively market their hundreds of gTLDs, many of which are targeted at niche vertical markets.

He said in an ideal world a gTLD would need to spend $20 million to $30 million a year for a few years in order to do a proper PR job on a single TLD — ICM spent about $8 million to $9 million, $5.5 million of which was on US TV spots — and that’s just not economically viable given how many names are being sold.

But he added that he thinks it’s a good thing that some new gTLDs are seeing a steady and fairly linear number of daily additions, saying it might point to better long-term stability.

A lot of the TLDs that seem to be doing okay — .club for argument’s sake and several others in that ilk — seem to be doing their three hundred domains per day ADD, or 32 or 12 or whatever the number is, in a relatively linear fashion six or seven months after launch, which I think is potentially positive if one extrapolates that out.

The full interview, which also addresses SEO, dot-brands, registrar pay-for-placement and smart search, can be read by DI PRO subscribers here.

Renewals at 55% as first new gTLD junk drop begins

Kevin Murphy, February 18, 2015, Domain Registries

The first new gTLD to go live is seeing its first-year renewals at 55% one year after hitting general availability.

dotShabaka Registry’s شبكة. (or “.shabaka”, the Arabic for “.web”) has also seen its zone file shrink by about 27% over the last two weeks.

The zone peaked at 2,069 domains on February 1, 2015, but today stands at 1,521. Exactly one year ago, it was at 1,561 names.

The zone is smaller today than it was just two weeks after GA began, in other words.

“We can confirm we’re seeing renewal rates for names due in February at around 55%,” Adrian Kinderis, CEO of ARI Registry Services, which runs .shabaka’s back-end, told DI in a statement.

The registry added 1,608 domains in February 2014, 1,400 of those in the first half of the month.

The 55% is the number of domains that were renewed before their February expiry date. The full number for February will not be known until the grace period ends in mid-April.

“We have a handful of cancel renews and all other expired domains are in the auto-renew period,” he said. “It’s too early to examine the numbers for renews post-expiry date, but we expect this will increase the overall tally.”

“Given the market conditions we face in the region, the results align with our forecasts and we expect the numbers to improve for renewals due in the coming weeks and months,” he said.

In gTLDs, domains can enter a Auto Renew Grace Period for up to 45 days after expiration, during which they can still be renewed by their registrant and may or may not appear in the zone file.

It wouldn’t be fair on other new gTLD registries to read to much into these numbers, assuming they do not improve, as شبكة. is a bit of an unusual case.

It’s seen low registration volume, despite the apparently attractive string, largely because it’s restricted to Arabic script at the second level and the Arabic-speaking market is in its infancy.

When شبكة. launched there were no registrars offering an end-to-end Arabic shopping cart, Kinderis said. He added:

The most significant problem still remains demand and consumer awareness…

In regards to demand, the lack of awareness is a direct result of little to no marketing in the region. Apart from our own efforts, there has been little marketing or education programs deployed to increase awareness of new Top-Level Domains and Arabic script domain names.

We have even limited our marketing efforts because we identified early that market readiness is inadequate. Any large investment in marketing from dotShabaka Registry at the moment would be premature and wasteful until supply, demand and universal acceptance issues have been addressed.

He called on ICANN and its recently created Middle East Working Group to focus on ways to increase awareness and demand for domain names in the region. To date, it’s focused too much registrars and technical issues, he said.

شبكة. has its own set of issues and is probably not the best test case for new gTLDs in general.

That’s going to come soon. Donuts’ first batch of gTLDs — .guru, .bike, .holdings, .plumbing, .singles, .ventures and .clothing — had their base-price GA anniversary on February 4, and it appears that domains have already started to drop.

There’s little indication of anything amiss in the .guru zone file so far but the other six are down slightly — by maybe 100 or so names apiece, or less than 1% each — over the last two weeks.

Donuts executives have said they expect first-year renewals to be strong, but we’ve got a few weeks left before anyone will be in a position to know for sure.

Generics versus brands as two more gTLDs are sold

Kevin Murphy, February 17, 2015, Domain Registries

Two more new gTLD contention sets have been settled by auction, one a case of a portfolio applicant prevailing over a closed generic applicant, the other a case of a brand owner paying off a portfolio applicant.

Donuts has won the right to .jewelry over $10 billion-a-year jewelry firm Richemont, owner of brands including Cartier.

Richemont applied for several TLDs, some of which were generic terms. It was awarded .watches uncontested, but apparently didn’t want to fork out as much as Donuts for the matching .jewelry.

Google, meanwhile, won the two-horse race for .moto against Rightside. This one’s interesting because it’s basically a case of Rightside forcing Google to pay up to own one of its own brands.

Google owns a trademark on “Moto” due to its acquisition of Motorola Mobility a few years ago, but Rightside applied for it in its generic sense as an abbreviation of “motorcycle” or “motorbike”.

Google had filed a legal rights objection against its rival for .moto, but lost. Now it’s been forced to cough up at auction instead.

Prices, as usual, have not been disclosed.