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New gTLD lottery tickets now on sale

Kevin Murphy, December 12, 2012, Domain Registries

ICANN has started selling its $100-a-pop New gTLD Prioritization Draw raffle tickets in Los Angeles, with a little less than a week to go until the make-or-break drawing.

The organization is understandably eager not to balls it up this time — the Draw replaces Digital Archery, which was killed off largely due to how silly it was — so there are strict rules in place.

Due to the Californian lottery laws the Draw will operate under, applicants have to show up in person to buy their tickets, or ask a designated proxy to do it for them.

To avoid any funny business, each buyer has to show up with a government ID with details matching those on the special Designation Form, which in turn must be signed by a named individual from the gTLD application itself.

It’s strictly one ticket per application, of course.

Some applicants have got in early. Here’s photographic evidence that some applicants have successfully bought theirs, courtesy of Uniregistry counsel Bret Fausett.

Draw tickets

The draw itself will take place on December 17, starting at about 1pm local time, at the LA airport Hilton. Anyone who shows up to buy tickets after 11am that day will be turned away.

With over 1,900 applications, we could be looking at eight hours or more of pulling pieces of paper out of a bucket.

The whole thing will be webcast for people who, like me, have nothing better to do with their time.

Opting out of the process is as simple as not buying a ticket, but there’ll be a secondary draw to determine the prioritization of opted-out applications.

Applications for internationalized domain names will be drawn first, followed by non-IDNs, followed by opted-out IDNs, followed by opted-out non-IDNs.

Why is this lottery so important?

For many applicants it’s going to determine their time to market, which could mean the difference between launching into a market eager for new real estate and launching into one jaded by flops.

In some cases a good draw number could be worth millions. But unfortunately for applicants, they won’t be able to trade their tickets or prioritization slots.

YouPorn owner arrested in tax evasion probe

Kevin Murphy, December 10, 2012, Domain Registries

YouPorn owner and regular ICM Registry antagonist Fabian Thylmann has reportedly been arrested in Belgium in connection with a German tax evasion investigation.

He was taken into custody at Brussels airport today under a warrant from the Cologne District Court, according to German daily Die Welt.

Thylmann is the owner — some say nominally so — of Manwin Licensing, the online porn empire behind brands such as YouPorn, Brazzers and, under license, Playboy.

Manwin sued ICANN and ICM late last year over the .xxx gTLD, saying it violates US antitrust laws, charges which are denied.

The company is also engaged in an ICANN Independent Review Panel procedure over the same issues.

ICM says that the lawsuit, and a related boycott, are merely attempts to disrupt its business. Thylmann, the company claims, offered to invest in ICM but was rebuffed.

According to Die Welt, Manwin’s German headquarters was raided last Tuesday as part of an ongoing tax evasion probe, which was spurred in part by the newspaper’s own investigation into the company.

Russian iTunes Store infiltrated by .xxx banners after snafu [NSFW]

Kevin Murphy, December 5, 2012, Domain Registries

Russian iTunes users reportedly got a shock today when they discovered masses of sexually explicit content from the .xxx gTLD in their iTunes Store.

According to local reports, attempts to visit a part of the store dedicated to foreign movies displayed a bunch of banner ads for .xxx web sites instead of the expected content.

Digging a little deeper, it appears that the images were being drawn directly from xxx.xxx, a promotional directory site owned and managed by ICM Registry, the .xxx registry.

Speculation in the Apple blogs is that an iTunes Store developer inadvertently typed “xxx.xxx” somewhere as a placeholder URL, not realizing that .xxx is actually a live TLD.

There’s a lesson here for new gTLD registries somewhere, I’m sure.

TLDH hires ICANN’s former new gTLDs head

Kevin Murphy, December 3, 2012, Domain Registries

Top Level Domain Holdings has hired Michael Salazar, former head of the new gTLD program at ICANN, as its chief financial officer.

The hire, which is still subject to some regulatory checks, will also see Salazar become an executive director of the company, which has applied for dozens of new gTLDs.

Salazar was at ICANN for three years, before leaving this June in the wake of the TLD Application System and Digital Archery messes.

Before ICANN, he was with KPMG for 16 years, according to TLDH.

It’s the second time TLDH has brought a former ICANNer on board to fill a senior role.

Former chair Peter Dengate Thrush controversially joined the company as executive chairman in July 2011, but recently announced that he will be leaving the company in January.

Salazer replaces David Weill, CFO as well as a founding director of the company, who is leaving. He’s the second original director, after Clark Landry, to quit in as many months.

Winners and losers in the new .com pricing regime

Kevin Murphy, November 30, 2012, Domain Registries

Today’s shock news that Verisign will be subject to a .com price freeze for the next six years will have broad implications.

The US Department of Commerce has told the company it will have to continue to sell .coms at $7.85 wholesale until 2018, barring exceptional circumstances.

Here’s my initial take on the winners and losers of this new arrangement.

Domain investors

Volume .com registrants are of course the big winners here. A couple of dollars a year for a single .com is pretty insignificant, but when you own tens or hundreds of thousands of names…

Mike Berkens of Most Wanted Domains calculated that he’s saved $170,000 $400,000 over the lifetime of the new .com deal, and he reckons fellow domainer Mike Mann will have saved closer to $800,000 $2 million.

Brand owners

The other big constituency of volume registrants are the brand owners who spend tens or hundreds of thousands of dollars a year maintaining defensive registrations — mostly in .com — that they don’t need.

Microsoft, for example, owns over 91,000 domain names, according to DomainTools. I’d hazard a guess that most of those are defensive and that most are in .com.

Registries

There’s potentially trouble on the horizon for new gTLD applicants and existing registry operators. Verisign is looking for new ways to grow, and it’s identified its patent portfolio as an under-exploited revenue stream.

The company says it has over 200 patents either granted or pending, so its pool of potential licensees could be quite large.

Its US portfolio includes patents such as 7,774,432, “Registering and using multilingual domain names”, which appear to be quite broad.

Verisign also owns a bunch of patents related to its security business, so companies in that field may also be targeted.

Registrars

Verisign’s registrars will no longer have to pass their cost increases on to consumers every year.

While this may help with renewal rates, it also means registrars won’t be able to sneak in their own margin increases whenever Verisign ups its annual fees.

IDN buyers

Another area Verisign plans to grow is in internationalized domain names, where it’s applied to ICANN for about a dozen non-Latin variants of .com and .net.

Those registry deals, assuming they’re approved by ICANN, will not be governed by the .com pricing restrictions. Now that Verisign’s growth is getting squeezed, we might expect higher prices for IDN .com variants.

ICANN

ICANN may have suffered a small reputational hit today, with Commerce demonstrating it has the balls to do what ICANN failed to do six years ago, but money-wise it’s doing okay.

The new .com contract changes the way Verisign pays ICANN fees, and Commerce does not appear to have made any changes to that structure. ICANN still stands to get about $8 million a year more from the deal.

The Department of Commerce

Unless you’re a Verisign shareholder, Commerce comes out of this deal looking pretty good. It played hard-ball and seems to have won a lot of credibility points as a result.