Windfalls still biggest money-spinner for M+M

Minds + Machines is still pulling in most of its cash from one-time new gTLD auction defeats, according to its latest trading update.
The company yesterday reported billings for 2015 of $7.92 million, up from $5.03 million in 2013.
But the company brought in $9.15 million by pulling out of private new gTLD auctions, where the winning bid is shared among the losers. That’s down from $37.5 million in 2014.
“Billings” is the money make at the point of sale, rather than audited revenue which is recognized over the life of the registration. Revenue numbers will come in April.
For the fourth quarter, sales of both premium and standard-fee names were up.
Premium names were up 215% at $1.52 million, which standard name billings were up 184% at $2.66 million.
The company said its registry business ended the year with 278,523 names under management, a 158% increase on year-ago numbers.
M+M met or beat its “key performance indicator” targets in terms of average revenue per name (both standard and premium) and sales growth.
However, the Chinese market boom caused it to miss its market share KPI.
It blamed missing the low end of its 3% to 5% new gTLD market share target by half a percentage point on the rapid growth of China.
The money being pumped into domain names from China in the second half of last year tends to favor the budget end of the new gTLD market, where names can be picked up for cents, whereas M+M’s TLD mix is skewed a little higher.
M+M said last week that it plans to open an office in China soon.

1 Comment Tagged: earnings, m+m, Minds + Machines, new gTLDs

$41m auction loser tries to slam brakes on .shop

Lawyer-happy gTLD applicant Commercial Connect has put GMO Registry’s $41 million purchase of the new gTLD .shop in jeopardy by filing an appeal with ICANN.
On January 26 — the day before the .shop auction — the Connecticut-based company filed an Independent Review Process complaint with ICANN, asking a panel of judges to enjoin ICANN from delegating .shop or even signing a registry contract with GMO.
It’s applied for “emergency” relief. Its full IRP complaint has yet to be filed.
GMO won a seven-way ICANN auction for .shop last week, agreeing to pay $41.5 million into ICANN coffers.
The IRP news will not be particularly surprising for anyone who has followed the .shop contention set closely.
Commercial Connect has deployed pretty much every legal avenue available to it in order to win .shop, which had eight competing applications.
It applied as a “community” applicant, but unsurprisingly failed to meet the stringent criteria that a Community Priority Evaluation requires.
It scored a measly 5 out of the 16 available CPE points, missing the 14-point target.
The company also spunked goodness knows how much cash filing 21 formal objections against other gTLD applicants — ridiculous complaints that “.supply” or “.セール” or “.services” were “confusingly similar” to .shop.
It actually managed to win two of its string similarity challenges, when panelists apparently decided to write their judgments before their morning coffee had kicked in.
It was probable that .shopping and .通販 would be confused with .shop in the mind of the average internet user, these panelists decided.
The .通販 decision was thrown out when sanity prevailed, but the .shopping decision stood. Only a recent back-room deal between Uniregistry and Donuts prevented the .shop auction being a head-explodingly confusing mess.
Now, with its IRP, Commercial Connect is claiming that the whole CPE system goes against ICANN rules.
According to its initial complaint, the fact that the CPE adjudicator, the Economist Intelligence Unit, came up with its own supplemental “CPE Guidelines” means that the the CPE system is not “ICANN policy” and should therefore be disregarded.
At first glance, it seems weak. But I said the same about the DotConnectAfrica IRP case, which DCA won.
IRP panels have been known to be somewhat “activist” (not necessarily a bad thing) recently, so it’s hard to call which way they will swing in any specific case.
But it does seem quite possible that the emergency relief that Commercial Connect requests — that is, no .shop contract until the IRP is over — will be granted.
For GMO, that means it’s just spent $41.5 million on a gTLD it probably won’t be able to launch for well over a year.
It’s perhaps interesting that Commercial Connect doesn’t seem to make any reference in its IRP to its original 2000-round application for .shop.
If that comes up in future filings, it could open up an entirely new can of worms.

6 Comments Tagged: .shop, commercial connect, community, cpe, ICANN, irp, new gTLDs

Donuts adds two millionth domain

Donuts today said that it has added its two millionth new domain name registration.
The domain in question was schedule.holiday, the company said.
The number appears to refer to fresh registrations, not including renewals, across all of its TLDs.
Its first batch of gTLDs launched about two years ago.
The registry currently has 192 new gTLDs, 185 of which are in general availability, according to DI records, making the average haul about 10,000 names per TLD.
If we were talking $20 per registration (an estimate, as Donuts doesn’t publish its registry fees), the company would have made $40 million from new regs.
That’s not including its sunrise fees, renewals, or recurring premium-fee domains, of course.
It spent almost $57 million just on ICANN application fees.
It expects to wind up with about 200 by the time the current application round ends.
Its best performer to date is .guru, one of its first to launch, which has about 65,000 names in its zone file today and, according to Donuts, over 67,000 names in total.

6 Comments Tagged: donuts, new gTLDs

UN group supports community .gay bid

An organization representing staff members of the United Nations has come out in support of dotgay LLC’s struggling community application for the .gay gTLD.
UN-GLOBE comprises UN employees who identify as “lesbian, gay, bisexual, transgender, and inter-sex”. Its primary goals are pushing for equal rights for these groups within the UN system.
In a letter to ICANN (pdf) earlier this month, the organization said it supports dotgay’s application, despite its Community Priority Evaluation being rejected twice.
The Economist Intelligence Unit’s judging panel has kicked out both of dotgay’s CPEs on the grounds that the applicant’s definition of “gay” includes straight people, and straight people aren’t gay.
But UN-GLOBE, echoing dotgay’s own view, wrote:

We also express our disagreement over the results of the Community Priority Evaluation of October 8, 2015 that rejected dotgay LCC’s community application based on its narrow analysis of the term gay. The term gay should be understood globally instead, as it is generally understood by the internationally diverse lesbian, gay, bisexual, transgender, queer, intersex, and ally (LGBTQIA) community represented in dotgay LLC’s application.

It might be worth noting that UN-GLOBE makes no mention of its own membership including “allies” — that is, people who are not LGBTQI but nevertheless support equal rights — in its letter or on its web site.
dotgay currently has an outstanding Request for Reconsideration against its latest CPE loss, which is expected to be decided by ICANN’s Board Governance Committee on Monday.
If ICANN closes the door on more appeals, the .gay contention set will go to auction where its rivals are Rightside, Top Level Design and Minds + Machines.
One way or another, there will be a .gay gTLD, the only question is whether it will be restricted to approved “gay community” members or open to all.

1 Comment Tagged: .gay, community, cpe, dotgay, ICANN, new gTLDs, un-globe

Terror fears prompt security crackdown for ICANN 55

ICANN is bringing in metal detectors, bag searches and ID checks at its forthcoming public meeting in Marrakech, Morocco.
The measures are being introduced despite ICANN’s assurances that it considers the chance of terrorism at ICANN 55 to be “LOW”.
In a statement today, ICANN meetings boss Nick Tomasso said:

we are in constant and on-going communication with our hosts and the Moroccan government, to assess any security concerns surrounding the upcoming meeting. In addition, we are working with a highly respected global security-consulting firm, which gives us on-going updates of potential risks. This firm has also assigned a senior level analyst to work with ICANN.
As of this date, the assessments of these various security experts is that there is only a LOW risk of any type of terrorist activity in Morocco.

The statement comes as some members of the ICANN community have been expressing concerns about visiting Morocco, in the light of recent ISIS/Daesh-linked terrorist attacks in North Africa.
Morocco itself has not been the target of any successful Daesh attacks, though members of the cell behind the November attacks in Paris are reported to have Moroccan links.
Marrakech was bombed by an Al Qaeda-linked group in 2011.
Several Western governments urge visitors to the country to exercise caution, saying there’s a high risk of terrorist attacks.
The UK government says, for example:

There is a high threat from terrorism in Morocco. Attacks could be indiscriminate, including in places visited by foreigners.

The US government is less alarmist:

The potential for terrorist violence against U.S. interests and citizens exists in Morocco. Moroccan authorities continue to disrupt groups seeking to attack U.S. or Western-affiliated and Moroccan government targets, arresting numerous individuals associated with international terrorist groups. With indications that such groups still seek to carry out attacks in Morocco, it is important for U.S. citizens to be keenly aware of their surroundings and adhere to prudent security practices such as avoiding predictable travel patterns and maintaining a low profile.

I’ve heard community members speculate that an ICANN meeting, with its broad international mix of delegates, some governmental, might be an attractive target.
Personally, I’m not convinced the risk is much greater than it would be in any Western capital. My mother is vacationing unaccompanied in Egypt around the same time, and I’m fine with that.
However, ICANN seems to be taking the concerns seriously.
Tomasso added the following, non-exhaustive list of new security measures for ICANN 55:

• Every delegate will now need a government-issued ID to pick up a badge at the registration desk.
• There will be increased security screening for those entering our meeting venue, which may include metal detectors, magnetic wands and bag checks.
• There will be advanced verification of delegate registration information by Moroccan authorities.
• Security will be increased at the hotels where delegates are staying.
• We are establishing a 24/7 operations center at the venue.

It’s not exactly TSA-levels of privacy invasion, but I can see some would-be delegates being put off by the extra hassle.
If ICANN were to cancel the Marrakech meeting, it would risk seriously pissing off African community members.
The Marrakech meeting was originally scheduled for 2015, but it was postponed due to fears about the Ebola virus, which at the time was running rampant in African countries thousands of miles away.
In 2010, ICANN was criticized for its handling of security concerns around a meeting in Kenya, where at least 74 delegates cancelled their registrations over terror fears.
ICANN also cancelled a planned 2011 meeting in Jordan due to Middle East security concerns.
ICANN 55 is scheduled for March 5 to 10.

6 Comments Tagged: ICANN, marrakech, morocco, terrorism

.shop gTLD sells for record $41.5 million

The nine-way fight for the .shop gTLD has raised $41.5 million at auction.
It’s the most-expensive reported new gTLD sale to date.
The victor was GMO Registry of Japan, which runs a few Asian geographic gTLDs and acts as service provider for over a dozen dot-brands.
GMO wanted .shop so badly it actually applied twice for the gTLD in the 2012 application round.
Only two bidders, GMO and an unidentified rival, were prepared to pay over $15 million, according to ICANN.
The previous record-holder for an ICANN gTLD auction was .app, which Google bought for a smidgen over $25 million last February.
Dozens of contention sets have “self resolved” via private auction, but the winning bids of those are typically not disclosed.
According to GMO’s .shop application, .shop will be an open, unrestricted namespace. The company seems to be planning to sell value-added e-commerce services in addition to domain names.
But domainers will not be welcome in the gTLD. GMO’s application reads:

Registration of a .SHOP domain name solely for the purpose of selling, exchanging, trading, leasing the domain name shall be deemed as inappropriate use or intent.

The company plans to do random spot checks to make sure no registrants are breaking this rule.
GMO is using CentralNic as its back-end registry services software provider, following a 2013 deal.
Radix, Famous Four, Donuts, Google, Amazon, 2000-round applicant Commercial Connect and a company called Beijing Jingdong 360 had all applied for .shop.
But according to ICANN only seven of the original applicants qualified for the auction.
One of the drop-outs was GMO itself. The company has actually applied for .shop twice — once as a regular applicant and once as a “community”.
The non-community application was the one that participated in the auction.
Unsuccessful community applicant Commercial Connect, which has been fighting for .shop since first applying for it in 2000, also did not participate.
On Tuesday, it filed a futile Request for Reconsideration (pdf) with ICANN, complaining about the fact that it lost its Community Priority Evaluation.
.shop was originally linked to .shopping, due to a badly decided String Similarity Objection, but that contention set was resolved separately by Donuts and Uniregistry last week.

6 Comments Tagged: .shop, auction, gmo registry, ICANN, new gTLDs

ICANN tests emergency registry with dead dot-brand

ICANN is running a test of its Emergency Back-End Registry Operator program, using the dead dot-brand gTLD .doosan as its guinea pig.
Doosan Group, a large Korean conglomerate, decided to kill off its gTLD, .doosan, last September. ICANN revealed the news in October.
The dot-brand had never been put to productive use and really only ever had nic.doosan live.
As it’s a dot-brand, it’s protected by the part of the Registry Agreement that prevents it being transferred to another registry operator.
Rather than letting the gTLD slip away into the night, however, ICANN is taking it as an opportunity to test out its EBERO system instead. ICANN says:

Simulating an emergency registry operator transition will provide valuable insight into the effectiveness of procedures for addressing potential gTLD service interruptions. Lessons learned will be used to support ICANN’s efforts to ensure the security, stability and resiliency of the Internet and the Domain Name System.

EBERO is the process that is supposed to kick in when (or if, I guess) a gTLD with a significant number of third-party registrations goes out of business and no other registry wants to take it over.
The EBERO provider takes over the running of the TLD’s critical functions for a few years so it can be wound down in an orderly fashion, giving registrants enough time to migrate to other TLDs.
Nominet, one of the designated EBERO operators, has taken over .doosan for this test, which is only a temporary measure.
Its IANA record was updated today with Nominet named as the technical contact and ICANN as the sponsor and administrator. Its name servers have switched over to Nominet’s.
Right now, www.nic.doosan resolves to ICANN’s EBERO web page. The non-www. version doesn’t seem to do anything.
ICANN said it will provide updates when the test is over.

1 Comment Tagged: doosan, dot-brands, ebero, ICANN, new gTLDs, nominet

Two new gTLD registries open offices in China

Portfolio gTLD registries Famous Four Media and Minds + Machines have both announced that they’re formally entering the Chinese market.
Both companies are establishing “wholly foreign-owned enterprises” (WFOEs), a form of company that does not require local investment, on the mainland.
The moves are aimed at getting the registries’ respective gTLDs accredited by the Chinese government, something that is required before local registrants are allowed to use them.
In a press release, FFM senior legal counsel Oliver Smith said:

It was clear to us soon after launching our first domain registry that domain registrations from China comprised a strong proportion of the total. It was a natural progression of our strategy to build a physical presence in China. The accreditation process is complicated but well-structured and, thanks to the help of advice from the Chinese government, should be completed relatively quickly.

In some of Famous Four’s gTLDs, Chinese registrars are the overwhelming majority of the sales channel.
In .win, the registry’s biggest-seller, China was responsible for about 85% of registrations at the last count, for example.
Meanwhile, M+M is taking a slightly different route into the country.
It said today that while it also shortly plans to open a WFOE, it has also partnered with ZDNS, a local provider of proxy services for registries.
ZDNS was the company XYZ.com partnered with for its controversial launch into China. According to M+M, it’s also working with .CLUB Domains and some Chinese gTLD registries.
M+M is also using the specialist consultancy Allegravita for its marketing there.
Its local entity will be called Beijing Ming Zhi Mo Si Technology Company Limited (which may or may not translate to something like “Wise Mediation”).
M+M’s first Chinese launches will be .beer, .fashion, .fit, .law, .wedding, .work and .yoga, with .vip and .购物 (“.shopping”) coming later in the year.

Comment Tagged: china, Famous Four Media, Minds + Machines, new gTLDs

Fox promises dot-brand will be “the next big thing”

Fox seems set to become an unexpectedly early adopter of its dot-brand gTLD, .fox.
The only live .fox web site, nic.fox, is currently promising that the gTLD will become “the next big thing” in “Spring 2016”.
On the site, a glossy, quick-cut show-reel of Fox media carries the text:

Cue the lights. Roll the cameras. The next big thing is coming. And you’re invited. Welcome to .FOX. Spring 2016.

.fox will be a “a trusted digital space for everything you love about Fox” the site promises.
It suggests that Fox content in DVD, Blu-ray and Digital HD formats will be available via .fox web sites.
.fox has only been in the root since late November; its owners have not so far appeared to be champing at the bit to get their dot-brand online, and Fox has not exactly been enthusiastic about new gTLDs.
Its IP lawyers were some of the most outspoken critics of the program in its early days, estimating they would have to spend millions of dollars on defensive registrations.
Not only has that not happened, but Fox now seems to be grasping the “trusted source” dot-brand sales pitch with both hands.
It’s going to be interesting to see not only what the company has up its sleeve, but also how extensively it is promoted.

9 Comments Tagged: dot-brand, fox, ICANN, new gTLDs

Patent troll hits registrars with $60m shakedown

A patent troll that claims it invented email reminders has launched a shakedown campaign against registrars that could be worth as much as $62 million.
WhitServe LLC, which beat Go Daddy in a patent lawsuit last year, is now demanding licenses from registrars that could add as much as $0.50 to the cost of a domain name.
According to registrar sources, registrars on both sides of the Atlantic have this month been hit by demands for hundreds of thousands or millions of dollars in patent licensing fees.
The legal nastygrams present thinly veiled threats of litigation if the recipients decline to negotiate a license.
WhitServe is a Connecticut-based IP licensing firm with connections to NetDocket, which provides software for tracking patent license annuities.
It owns US patents 5,895,468 and 6,182,078, both of which date back to the late 1990s and cover “automating delivery of professional services”.
Basically, the company reckons it invented email reminders, such as those registrars send to registrants in the weeks leading up to their domain registration expiring.
Three years ago, GoDaddy, defending itself against WhitServe’s 2011 patent infringement lawsuit, compared the “inventions” to the concept putting “Don’t forget to pick up milk” notes on the fridge: utterly obvious and non-patentable.
In December 2012, GoDaddy implied WhitServe used its patent expertise and exploited a naive 1990s USPTO to obtain “over-broad” patents.
It was trying “to monopolize the entire concept of automatic Internet reminders across all industries, including domain name registrars”, according to a GoDaddy legal filing.
But the market-leading registrar somehow managed to lose the case, opting to settle last August after its last defense fell apart, for an undisclosed sum.
Now, WhitServe is using that victory to shake loose change out of the pockets of the rest of the market.
It’s told registrars that GoDaddy and Endurance International (owner of Domain.com, BigRock and others) are both currently licensing its patents.
The deal it is offering would see registrars pay $0.50 for every domain they have under management, a number that seems to be based on .com registry numbers reported by Verisign.
The fee would be reduced to $0.30 per name for each name over one million, and $0.20 for each name over five million, I gather. That’s still more than registrars pay in ICANN fees.
If WhitServe were to target every .com registrar (which I do not believe it has, yet) its demands could amount to as much as $62 million industry-wide, given that .com is approaching 125 million names right now.
It’s not clear whether these fees are expected to be one-time payments or recurring annual fees.
It’s a trickier predicament for registrars than the usual patent shakedown, because registrars are legally obliged under their contracts with ICANN to send email reminders in a variety of circumstances.
The Expired Registration Recovery Policy requires them to email renewal reminders to customers at least twice before their registrations expire.
There’s also the Whois Data Reminder Policy, which obliges registrars to have their customers check the accuracy of their Whois once a year.
These are not services registrars are simply able to turn off to avoid these patent litigation threats.
Whether registrars will take this lying down or attempt to fight it remains to be seen.

11 Comments Tagged: ICANN, patents, reminder, renewal, whitserve, whois