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Directi’s Radix wins .website gTLD auction

Kevin Murphy, October 23, 2013, Domain Registries

Directi-affiliated TLD registry Radix, has won the private auction for the .website gTLD, according to Radix.

The company beat rival portfolio applicants Donuts and Top Level Domain Holdings to the string, in an auction that was managed by Innovative Auctions, likely one of several going on this week.

There’s no outstanding Governmental Advisory Committee advice or objections to the Radix application, so its path to contracting and eventual delegation should be relatively uncontroversial now.

The price was undisclosed, Innovative’s standard terms.

Directi is in the process of being acquired by Endurance International, owner of Domain.com, which promised Radix up to $62 million to help with its gTLD auctions.

Domain.com owner files for $400m IPO, to spend $110m buying Directi

Kevin Murphy, September 10, 2013, Domain Registrars

Endurance International, owner of Domain.com and HostGator, plans to raise up to $400 million in a Nasdaq IPO, and said it will spend up to $110 million of that buying Directi, India’s largest domain registrar.

As part of the proposed acquisition, Endurance has also agreed to bankroll Directi’s new gTLD auctions to the tune of $62 million.

The acquisition is not final, and appears to depend on a number of targets related to the IPO and Directi’s revenue performance. Endurance’s S-1 filing with the US Securities and Exchange Commission reads:

In August 2013, we entered into a master share purchase agreement to acquire all of the outstanding capital stock of Directi from Directi Holdings, the seller, for an amount we estimate will be between $100 million and $110 million in cash or, at the election of the seller, a combination of cash and shares of our common stock, subject to the satisfaction or waiver of specified customary closing conditions and the achievement of specified financial targets.

The acquisition would close in the fourth quarter this year.

As well as running a top-ten registrar (and a few dozen others), Directi subsdiary Radix Registry has 29 active new gTLD applications, 26 of which are contested.

Endurance proposes to help Radix win these contention sets. On new gTLD auctions, the S-1 says:

in connection with our proposed acquisition of Directi, we entered into agreements with entities affiliated with Directi Holdings related to participation in the auction of new top level domain extensions and domain monetization activities, pursuant to which, among other things, we may be obligated to make aggregate cash payments of up to a maximum of approximately $62 million, subject to specified terms, conditions and operational contingencies.

Endurance is a complicated company. Its most familiar brands include Domain.com, iPage, FatCow, Homestead, Bluehost, HostGator, A Small Orange, iPower and Dotster.

But since December 2011 it has been controlled and majority owned by Warburg Pincus and Goldman Sachs, which paid a reported $975 million.

Its annual revenue for the last three calendar years has been $87.8 million, $190.3 million and $292.2 million. It’s currently not profitable, recording a net loss of $139.2 million in 2012.

It has seven million domains under management and had 3.4 million customers at the end of June 2013.

Judging by the S-1, the company has over a billion dollars of debt. Directi acquisition excluded, most of its IPO proceeds would go towards paying off some of that debt.

Six more LROs kicked out, most for “front-running”

Kevin Murphy, July 28, 2013, Domain Policy

Six more new gTLD Legal Rights Objections, six more rejected objections.

The World Intellectual Property Organization is chewing through its caseload of LROs at a regular pace now, made all the more easier by the fact that a body of precedent is being accumulated.

Objections rejected in decisions published last week cover the gTLDs .home, .song, .yellowpages, .gmbh and .cam.

All but one were thrown out, with slightly different panelist reasoning, because they had engaged in some measure of “front-running” — applying for a trademark just in order to protect a gTLD application.

Here’s a quick summary of each decision, starting with what looks to be the most interesting:

.yellowpages (hibu (UK) v. Telstra)

Last week somebody asked me on Twitter which LROs I thought might actually succeed. I replied:

Well, my initial hunch on .yellowpages was wrong, and I think I’m very likely to have been wrong about the other two also.

This case is interesting because it specifically addresses the issue of two matching trademarks happily living side-by-side in the trademark world but clashing horribly in the unique gTLD space.

The objector in this case, hibu, publishes the Yellow Pages phone book in the UK and has a big portfolio of trademarks and case law protecting its brand. If anyone has rights, it’s these guys.

But the “Yellow Pages” brand is used in several countries by several companies. In the US, there’s some case law suggesting that the term is now generic, but that’s not the case in the UK or Australia.

On the receiving end of the objection was the Australian telecoms firm Telstra, which is the publisher of the Aussie version of the Yellow Pages and, luckily for it, the only applicant for .yellowpages.

The British company argued that “no party should be entitled to register the Applied-for gTLD”, due to the potential for confusion between the same brand being owned by different companies in different countries.

The panel concluded that brands will clash in the new gTLD space, and that that’s okay:

It is inherent in the nature of the gTLD regime that those applicants who are granted gTLDs will have first-level power extending throughout the Internet and across jurisdictions. The prospect of coincidence of brand names and a likelihood of confusion exists.

The critical issue in this LRO proceeding is whether the Objector’s territorial rights in the term “YELLOW PAGES” (and the prospect of other non-objecting third parties’ territorial right) means that the applicant (or anyone else for that matter) should not be entitled to the Applied-for gTLD.

The panelist uses the eight-criteria test in the Applicant Guidebook to make his decision, but he chose to highlight two words:

the Panel finds that the Objector has failed to establish, as it alleges, that the potential use of the Applied-for gTLD by the applicant… unjustifiably impairs the distinctive character or the reputation of the objector’s mark… or creates an impermissible likelihood of confusion between the applied for gTLD and the Objector’s mark.

Because Telstra has rights to “Yellow Pages” too, and because it’s promising to respect trademark rights at the second level, the panelist concluded that its application should be allowed to proceed.

It’s the third instance of a clash between rights holders in the LRO process and the third time that the WIPO panelist has adopted a laissez faire approach to new gTLDs.

And as I’ve said twice before, if this type of decision becomes the norm — and I think it will — we’re likely to see many more defensive applications for brand names in future new gTLD rounds.

The LRO is not shaping up to be an alternative to applying for a gTLD as a means to defend a legitimate brand. Applying for a gTLD matching your trademark and then fighting through the application process may turn out to be the only way to make sure nobody else gets that gTLD.

.cam (AC Webconnecting Holding v. United TLD Holdco)

Both sides of this case are applicants for .cam. United TLD is a Demand Media subsidiary while AC Webconnecting is a Netherlands-based operator of several webcam-based porn sites.

Like so many other applicants, AC Webconnecting applied for its European trademark registration for “.cam” and a matching logo in December 2011, just before the ICANN application window opened.

The panelist decided that its trademark was acquired in a bona fide fashion, he also decided that the company had not had enough time to build up a “distinctive character” or “reputation” of its marks.

That meant the Demand Media application could not be said to take “unfair advantage” of the marks. The panelist wrote:

Given the relatively short existence of these trademarks, it is unlikely that either [trademark] has developed a reputation.

In the Panel’s opinion, replication of a trademark does not, of itself, amount to taking unfair advantage of the trademark – something more is required.

the Panel considers that this something more in the present context needs to be along the lines of an act that has a commercial effect on a trademark which is undertaken in bad faith – such as free riding on the goodwill of the trademark, for commercial benefit, in a manner that is contrary to honest commercial practices.

What we’re seeing here is another example of a trademark front-runner losing, and of a panelist indicating that applicants need some kind of bad faith in order to lose and LRO.

.home (Defender Security Company v. DotHome Inc.)

Kicked out for the same reasons as the other Defender objections to rival .home — it was a transparent gaming attempt based on a flimsy, recently acquired trademark. See here and here.

DotHome Inc is the subsidiary Directi/Radix is using to apply for .home.

The decision (pdf) goes into a bit more detail than the other .home decisions we’ve seen to date, including information about how much Defender paid to acquire its trademarks ($75,000) and how many domains its bogus Go Daddy reseller site has sold (three).

.home (Defender Security Company v. Baxter Pike)

Ditto. This time the applicant was a Donuts subsidiary.

.song (DotMusic Limited v. Amazon)

Like the failed .home objections, the .song objection was based on a trademark acquired tactically in late 2012 by Constantine Roussos, whose company, CGR E-Commerce, is applying for .music.

This objection failed (pdf) for the same reasons as the same company’s objection to Amazon’s .tunes application failed last week — a trademark for “.SONG” is simply too generic and descriptive to give DotMusic exclusive rights to the matching gTLD.

Roussos has also filed seven LROs against his competitors for .music, none of which have yet been decided.

.gmbh (TLDDOT GmbH v. InterNetWire Web-Development)

Both objector and respondent here are applicants for .gmbh, which indicates limited liability companies in German-speaking countries.

TLDDOT registered its European trademark in “.gmbh” a few years ago.

Despite the fact that it was obviously acquired purely in order to secure the matching gTLD, the panelist in this case ruled that it was bona fide.

Despite this, the panelist concluded that for InternetWire to operate .gmbh in the generic, dictionary-word sense outlined in its application would not infringe these trademark rights.

Second .online gTLD bid and third ‘guardian’ dot-brand withdrawn

Directi appears to be the last man standing in the three-way tie-up for .online, following the latest new gTLD withdrawals.

Namecheap has dropped its .online application, closely following Tucows, which dropped its bid a couple of weeks ago.

The three companies announced a deal in March to see them cooperate to win the contested TLD, but at the time it wasn’t clear which applicants would pull out.

Directi’s bid (filed by DotOnline Inc under the Radix brand) remains. It has already passed Initial Evaluation, which may be part of the reason its application was chosen as the “winner”.

The gTLD is still contested, however. Directi is competing with Donuts, I-Registry and Dot Online LLC.

Separately today, a curious two-way dot-brand battle seems to have had its final twist, with Guardian Life Insurance’s withdrawal of its application for .guardianlife.

The insurance company and newspaper publisher Guardian News and Media had both applied for gTLDs containing the string “guardian”. There were originally five, but only two remain.

It now looks like Guardian News will get .theguardian, having previously conceded .guardian to its brand rival and dropping its bid for .guardianmedia.

It appears that there’s been more than a bit of strategic applying, and maybe some deal-making, here.

Neither remaining application is contested, and neither have objections. It’s likely that .guardian is captured by the Governmental Advisory Committee’s advice against “closed generics”, however.

.pw claims 50,000 domains registered in three weeks

Kevin Murphy, April 23, 2013, Domain Registries

Directi’s recently relaunched .pw top-level domain has racked up 50,000 domain name registrations after just three weeks of general availability, according to the company.

The number, which will put a smile on the faces of many new gTLD applicants, relates to GA only and does not include defensive registrations made during the ccTLD’s sunrise period, Directi confirmed to DI.

“Our goal was 100,000 names for the first year,” Directi CEO Bhavin Turakhia said in a press release. “The feeling of achieving 50% of the goal within the first three weeks is surreal.”

As previously reported, there were 4,000 .pw domains registered during the first half hour of GA.

Directi (running .pw as .PW Registry and/or Radix Registry) signed up 120 registrars to sell .pw names, which it brands as “Professional Web”.

It’s really the ccTLD for Palau, a small nation in the Pacific.

The registry is going for budget buyers, with registry fees and retail prices coming in a little lower than .com.

Australia leads the charge as governments file 242 new gTLD warnings

Kevin Murphy, November 21, 2012, Domain Registries

Governments of the world have filed 242 warnings on new gTLD applications, more than half of which came from Australia.

Warnings were filed against 145 strings in total, and in most cases governments issued the same warnings against all competing applications in a given contention set.

Australia was responsible for 129 warnings, accounting for most of the 49 warnings received by Donuts.

There are some surprises in there.

Notably, there were no warnings on any of the strings related to sex, sexuality or porn.

Given the amount of effort the GAC put into advising against .xxx, this is a big shock. Either governments have relaxed their attitudes, or none were willing to single themselves out as the anti-porn country.

No government warned on .gay.

The largest single recipient of warnings, with 49, was Donuts, the largest portfolio applicant.

The most-warned application, with 17 warnings, was DotConnectAfrica’s .africa. The company is contesting the gTLD without government support, and African nations objected accordingly.

Nigeria also warned Delta Airlines about its proposed .delta dot-brand,

The string “delta” is a protected ISO 3166 sub-national place name, as Delta is likely to discover when the Geographic Names Panel delivers the results of its evaluation.

Australia objected to .capital on the same grounds.

Top Level Domain Holdings was hit with warnings from Italy and South Africa based on a lack of government support for its geographic applications .roma and .zulu.

Remarkably, Samoa warned the three applications for .website on the grounds that they would be “confusingly similar” to its own ccTLD, .ws, which is marketed as an abbreviation for “website”.

The US warned on all 31 of Radix Registry’s applications, saying that the Directi company inappropriately included an email from the FBI in its bids, suggested an endorsement when none exists.

Australia, among its 129 warnings, appears to have won itself a lot of friends in the intellectual property community.

It’s objected to .fail, .sucks, .gripe and .wtf on the grounds that they have “overly negative connotations” and a lack of “sufficient mechanisms to address the potential for a high level of defensive registrations.”

It also issued warnings to applicants planning gTLDs covering “regulated sectors”, including .accountant, .architect and .attorney, without sufficient safeguards to protect consumers.

Generic strings with single-registrant business models — such as Google’s .app and .blog bids — are also targeted by Australia on competition grounds.

Australia more than any other governments appears to be trying to use its warnings as a way to enter into talks with applicants, with a view to remedial action.

Whether this will be permitted — applicants are essentially banned from making big changes to their applications — is another matter entirely.

The full list of warnings can be found here.

Indian domain conference attracts 4,000

Kevin Murphy, October 31, 2012, Domain Services

While US domain conferences are reportedly becoming sedate affairs, a domain-heavy summit that kicks off tomorrow in Mumbai has more than 4,000 signed-up attendees, according to organizers.

The two-day ResellerClub Hosting Summit, organized by Directi, may have “hosting” in the title, but its sponsors and agenda reveal a strong presence from the domain name industry.

Verisign is the major sponsor, plugging its .com and .net TLDs. Other sponsors include .org, .biz, .co, .asia and .pw.

The agenda features speakers from Public Interest Registry, ICANN, NameMedia and Directi new gTLD applicant Radix.

Directi expects all 31 of its gTLDs to be contested

Directi has applied for 31 new top-level domains and expects all 31 of them to be contested, according to CEO Bhavin Turakhia.

The company has budgeted $30 million for its unashamedly mainstream portfolio of applications – which includes the likes of .web – but that’s not including what it expects to spend at auction.

“I expect there to be contention in all of them,” he said. “Whether they will end up going to auction… we’re completely open to strategic partnerships with other industry players who we believe can add value and join hands with us, based on merit. We’ll be evaluating this on a case by case basis.”

“Something like a .web, there’ll be enough competitors out there that it will certainly go to auction, no matter what,” he said, adding that he expects at least 10 rivals for .web.

Directi has applied for: .web, .shop, .bank, .law, .music, .news, .blog, .movie, .baby, .store, .doctor, .hotel, .play, .home .site, .website, .click, .online, .one, .ping, .space, .world, .press, .chat, .city, .deals, .insurance .loans, .app, .host, and .hosting.

The company is applying via its new business unit, Radix, using ARI Registry Services as its back-end registry provider.

Turakhia said he expects to use a traditional registry-registrar model for most of the domains, assuming Directi wins its contention sets.

“The strings that we have gone for are strings that are relevant to all registrars so we expect there to be significant adoption,” he said.

“If eNom were to apply for .web and .shop – and they probably will – and if they were to win those TLDs, then our registrar businesses would definitely carry them irrespective of the fact that we have our own TLDs,” he said. “There are only so many good viable strings out there.”

Most of Directi’s gTLDs, if approved, will be completely unrestricted.

For .movie, .law, .doctor and .bank there will be some tight restrictions, Turakhia said. (UPDATE: he later added that .insurance and .loans will also be restricted).

Some will also have additional rights protection mechanisms that go above and beyond what ICANN mandates in its standard registry contracts.

But none of its applications are “community” applications, the special category of application defined by ICANN.

Turakhia said he doesn’t think some of the applicants trying to “sneak through” as community applications will be successful.

“We’re treating these as all generic strings for anyone to register domains in,” he said. “.music for me does not represent a community. I could be a bathroom singer and want a .music domain name.”

“If you treat music lovers as a community then 100% of the world is part of that community.”

Directi emerges as new gTLD applicant

The India-based domain name registrar Directi plans to apply for a bunch of new generic top-level domains, using ARI Registry Services as its back-end registry provider.

Directi has set up a new entity, Radix, to handle its applications and registry business.

The number and nature of the gTLDs in Radix’s plans have not been revealed, but the company uses words like “entrepreneurial” and “ambitious” to describe the move.

Reading between the lines, I’m going to lump Radix in with the like of Minds+Machines, Donuts, and Demand Media as one of the few companies to reveal big multiple-gTLD investment plans.

These “domainer” applicants (as opposed to focused, single-string applicants) are the guys to watch post-May 1, when the list of applications is published by ICANN.

In addition to Radix, Directi owns ResellerClub, LogicBoxes, BigRock and WebHosting.info.

According to Whois, radix.com belongs to a Brazilian investment company. It does not currently resolve.

Assuming there’s no affiliation with Directi, I think this officially means that Andrew Allemann is no longer allowed to mock companies that launch services before they own the matching .com domain.