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TLDH raises $33.6m to fight new gTLD auctions

Kevin Murphy, January 31, 2014, Domain Registries

Top Level Domain Holdings has raised £21 million with an institutional investor share placement to help it win some new gTLD contention set auctions.

Its total war chest following the $33.6 million-ish placement will be about $63 million, albeit with $15 million of that earmarked for a single, as-yet-unspecified auction.

The company is currently in 43 contention sets, most of which it apparently wants to resolve via private auction. TLDH said in a statement:

The Company believes private auctions provide a significant opportunity for the Company both to increase the number of high-value gTLDs within its portfolio and to generate cash from those gTLDs which it chooses to relinquish. Under the private auction process, the winning bid is divided equally and paid to the losing applicants net of the auctioneer’s fees.

As part of TLDH’s transition from a revenue-free penny stock to a trading company, it’s going to change its name to Minds + Machines Limited, via a reverse takeover of its subsidiary of the same name.

The company said the move will help with “stakeholder communications and branding”.

Finally, TLDH said that founding director Guy Elliott is to leave its board of directors and be replaced by new non-executive director Elliot Noss. Noss is of course CEO of rival registry/registrar Tucows.

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First Donuts new gTLD sunrise periods looking tiny

Kevin Murphy, January 31, 2014, Domain Registries

It’s possible that fewer than 1,200 domain names were registered in Donuts’ first seven new gTLD sunrise periods, judging by the latest zone file data.

According to Donuts zone files dated January 31, just 1,164 proper domain names currently exist in .clothing, .bike, .guru, .ventures, .holdings, .singles and .plumbing.

By TLD, the names break down like this:

.clothing — 560
.holdings — 166
.bike — 146
.ventures — 125
.guru — 117
.singles — 50
.plumbing — 44.

As far as I can tell, based on sample Whois lookups, all the names were registered during the gTLDs’ respective sunrise periods, not during the currently ongoing Early Access Program.

On the face of it, these look like very small sunrise periods indeed (consider .co, which had 11,000 registrations during its sunrise in 2011) but there are number of important caveats here.

First, this data might be wrong. There have been hiccups and glitches in registry zone file provision for weeks, and this might be one of those cases. I don’t think it is, but you never know.

Second, the data might be still incomplete. Names were to be allocated after the conclusion of Donuts end-date sunrise, which was January 24. Not all of these domains might have been allocated yet.

Third, these numbers don’t reflect “dark” domains. These are domain names that are not configured with name servers and therefore won’t show up in DNS zone files.

Fourth, and most importantly, domain names that have been blocked by trademark holders under Donuts’ parallel Domain Protected Marks List service do not show up in zone files.

DPML is the Donuts offering to trademark owners that drastically reduces the cost of blocking a mark — potentially to just a few dollars per domain per year — across all of the company’s gTLDs.

We already know from a bit of Whois detective work by World Trademark Review that the likes of Microsoft, Apple, Wal-Mart and Samsung blocked their brands across all seven of these TLDs.

DPML is a bit of a bargain if you’re dead-set on blocking your brand in as many TLDs as possible, and it’s possible — maybe even likely — that the number of DPML subscriptions outstripped actual sunrise registrations.

It’s a given that most valuable brands are more interested in preventing misuse than they are in participating in the new gTLD expansions — Microsoft has no use for microsoft.plumbing.

Judging by the zone files, domains registered during sunrise are largely appropriate to the gTLD — .clothing and .bike are full of clothing and biking brands, with very little crossover between the two, for example.

But there are plenty of exceptions to that rule.

Some other stuff I noticed

I had a dig through the files and did a few Whois look-ups whenever I saw a name that piqued my interest.

There are no hugely obvious examples of widespread gaming to be seen but some arguably generic names did go to some domain industry folk who have inside knowledge of the new gTLD program.

Notably, several people associated with new gTLD applications managed by Beverly Hills IP lawyer Thomas Brackey of Freund & Brackey seem to have picked up nice-looking generic domains during sunrise.

Luxury Partners of .luxury managed to get its hands on domains including luxury.clothing, for example, while What Box?, which applied for six gTLDs, grabbed realestate.guru and wedding.guru.

That’s right, apparently there are trademarks on “real estate” and “wedding” somewhere out there, and domain registry What Box? was able to provide the required proof that it’s using them in commerce.

Brackey himself is listed as the registrant of cloud.guru and direct.[tld] across the seven gTLDs, among others.

George Minardos of .build applicant Minardos Group acquired build.guru during sunrise too.

I wonder if any sunrise names will be challenged under Donuts’ Sunrise Dispute Resolution Policy.

While .guru has only attracted 117 registered names so far, it does appear to be the one place notoriously domain-shy Apple decided to actually play, presumably due to the support “gurus” it employs in its stores — ipad.guru, mac.guru and iphone.guru all went to the company.

There’s a “religious” flavor to some of the registrations there too — scientology.guru and darshan.guru were both registered by their respective organizations.

Amazon appears to be the most sunrise-happy of all registrants, grabbing dozens of (probably) useless names including kindle.plumbing, prime.ventures and aws.bike.

Some porn publishers seem to have gone a bit crazy too, with names such as m4m.plumbing and cam4.clothing making an appearance.

I found a few domains on my trawl that appear to have empty Whois records — christ.holdings and ghost.bike to name two amusingly appropriate examples — which doesn’t seem to be in the spirit of sunrise.

So there are definitely some oddities out there, but so far it does not appear to me based on my first look that massive numbers of trademark owners have been held to ransom, nor does there appear to have been any wholesale gaming of the system.

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Directi joins Domain.com family in $100m deal

Kevin Murphy, January 29, 2014, Domain Registrars

Endurance International, the holding company behind brands such as Domain.com and HostGator has closed the acquisition of top ten registrar Directi and some related companies.

The acquisition, which was announced last September is worth between $100 million and $110 million — $25.5 million in cash and the rest in shares and a promissory note.

The deal includes Directi properties BigRock (a registrar), ResellerClub (the reseller-focused registrar), LogicBoxes (the registrar management service) and webhosting.info.

It does not include Radix Registry, the company that applied for 31 new gTLDs, 28 of which applications are still active.

Directi CEO Bhavin Turakhia “has agreed to be closely involved in the integration of the two companies”, but it doesn’t sound like he’s taking on a permanent role at Endurance.

Endurance may not be a familiar brand in and of itself, but its businesses include Bluehost, HostGator, Domain.com, FatCow, iPage and Mojo Marketplace.

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EU body tells ICANN that 2013 RAA really is illegal

Kevin Murphy, January 29, 2014, Domain Registrars

A European Union data protection body has told ICANN for a second time — after being snubbed the first — that parts of the 2013 Registrar Accreditation Agreement are in conflict with EU law.

The Article 29 Data Protection Working Party, which is made up of the data protection commissioners in all 28 EU member states, reiterated its claim in a letter (pdf) sent earlier this month.

In the letter, the Working Party takes issue with the part of the RAA that requires registrars to keep hold of customers’ Whois data for two years after their registrations expire. It says:

The Working Party’s objection to the Data Retention Requirement in the 2013 RAA arises because the requirement is not compatible with Article 6(e) of the European Data Protection Directive 95/46/EC which states that personal data must be:

“kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the data were collected”

The 2013 RAA fails to specify a legitimate purpose which is compatible with the purpose for which the data was collected, for the retention of personal data of a period of two years after the life of a domain registration or six months from the relevant transaction respectively.

Under ICANN practice, any registrar may request an opt out of the RAA data retention clauses if they can present a legal opinion to the effect that to comply would be in violation of local laws.

The Working Party told ICANN the same thing in July last year, clearly under the impression that its statement would create a blanket opinion covering all EU-based registrars.

But a week later ICANN VP Cyrus Namazi told ICANN’s Governmental Advisory Committee that the Working Party was “not a legal authority” as far as ICANN is concerned.

The Working Party is clearly a bit miffed at the snub, telling ICANN this month:

The Working Party regrets that ICANN does not acknowledge our correspondence as written guidance to support the Waiver application of a Registrar operating in Europe.

the Working Party would request that ICANN accepts the Working Party’s position as appropriate written guidance which can accompany a Registrar’s Data Retention Waiver Request.

It points out that the data protection commissioners of all 28 member states have confirmed that the letter “reflects the legal position in their member state”.

ICANN has so far processed one waiver request, made by the French registrar OVH, as we reported earlier this week.

Weirdly, the written legal opinion used to support the OVH request is a three-page missive by Blandine Poidevin of the French law firm Jurisexpert, which cites the original Working Party letter heavily.

It also cites letters from CNIL, the French data protection authority, which seem to merely confirm the opinion of the Working Party (of which it is of course a member).

EU registrars seem to be in a position here where in order to have the Working Party’s letter taken seriously by ICANN, they have to pay a high street lawyer to endorse it.

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Moment of truth as first seven new gTLDs go on sale

Kevin Murphy, January 29, 2014, Domain Registries

We’re finally going to see if there’s any demand for new gTLD domain names.

The first seven new gTLDs — .bike, .clothing, .guru, .holdings, .plumbing, .singles and .ventures, all operated by Donuts — hit first-come, first-served general availability this afternoon.

I understand that the precise time they’re due to become available is 1600 UTC.

But these are going to be unlike any new TLD launches we’ve seen to date.

We’re unlikely to see the kind of mad gold-rush that was enjoyed by the likes of .mobi and .co in their first 24 hours, largely due to the high prices Donuts intends to charge for early adopters.

Under its Early Access Program, any domain registered in these TLDs on day one is going to cost over $10,000 for the first year. The price will come down to $2,500+ tomorrow and will be reduced each day until settling at regular pricing a week from now.

Go Daddy, which commands about half of the retail market, has previously indicated that its day one pricing for Donuts’ gTLDs will be $12,539.

Judging by the Go Daddy web site today, it’s treating EAP as one of its “priority pre-registration” phases distinct from general availability, which it says will kick off February 5.

The EAP is Donuts’ alternative to the landrush-with-auctions model we’ve become accustomed to in previous TLD launches.

The questions are whether this will affect domain investors’ willingness to dive in and grab some premium real estate and whether it will encourage actual end-users to register early.

It seems pretty obvious that while day one of GA for Donuts’ gTLDs is the first big test of its pricing strategy, it’s not going to be the yardstick for volume performance that we’ve seen in previous launches.

I think it’s a pretty safe bet that today’s volumes for Donuts will not come close to GA-day numbers for the likes of .co, .xxx or .mobi, which were in the five or six-figure range.

But with pricing for .bike et al today literally 200 times more expensive than .xxx’s GA pricing, Donuts doesn’t need to sell a great many names to have made a nice return.

ICM Registry said it sold 55,367 .xxx domains in the first 24 hours of GA back in December 2011. With a registry fee of $62, that’s revenue of $3.43 million to the company.

To make the same amount of money from a single gTLD such as .guru, with its $10,000 (I believe) registry fee, Donuts only needs to sell 343 domains today.

.CO Registry sold 194,000 domains in its first 24 hours, at a registry fee I believe was $20, for approximately $3.88 million in revenue. Donuts would only need to sell 388 .clothing domains to make the same return.

These might be achievable numbers. .CO, which operated a landrush-with-auctions period, sold at least 38 domains for over $10,000 and 227 for over $2,500, based on its published results.

Volume matters for the long-term health of a gTLD with public visibility and an aftermarket, but not so much anymore for the financial health of the registry itself.

UPDATE: An earlier version of this story reported that the premium EAP prices recur for every year of the registration. They actually revert back to standard Donuts pricing in the second year.

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