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New gTLDs steal $5 million from Web.com’s top line

Kevin Murphy, November 6, 2014, Domain Registrars

Top registrar Web.com is seeing disappointing revenue from its domain business due to new gTLDs.

The “increased availability” of names has taken a chunk out of the company’s premium domain sales, CEO David Brown told analysts on the company’s third-quarter earnings call yesterday.

While we continue to expect the recently expanded top-level domain environment to increase our ability to sell domains over the medium to long term, the increased availability of names has had a near-term negative impact on domain-related revenue. This is primarily associated with non-core domain-related revenue such as sales of premium domain names and bulk domain sales.

As a result, the company has reduced its full-year 2014 revenue guidance from between $576 million and $579 million to between $566.7 million and $568.7 million

The company blamed about half of the reduction — about $5 million — on softness in its domain name business.

Brown explained that the new gTLD environment has seen domain investors exercise much more caution when it comes to buying premium names and buying names in bulk:

We’ve seen that market get soft…. The reason the softness is occurring is that this marketplace is looking at all of these new gTLDs coming into place, there are more options available for people and they’re kind of stepping back away, at least temporarily, to see how things settle out.

He said the company expects the market to come back after the uncertainty has passed.

Web.com yesterday reported third-quarter net income of $33.9 million, up from $29.3 million a year ago, on revenue that was up to $137.4 million from $125.2 million in 2013.

The company, which owns brands including Register.com and Network Solutions, announced a $100 million share repurchase at the same time, to prop up the inevitable hit its stock was to take.

Its shares are trading down 25% at time of publication.

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Battles for .chat, .style, .tennis, bingo and .sas over

Kevin Murphy, November 6, 2014, Domain Registries

Seven new gTLD contention sets have been formally resolved with application withdrawals this morning, five of which we haven’t previously reported on.

Most appear to have been settled by private auctions, with Donuts often the victor.

The standout, however, is .sas, an unusual case of a contention set of two would-be dot-brand registries being resolved.

The business software maker SAS Institute, which applied as Research IP, has prevailed over the Scandinavian airline holding company SAS AB for the .sas gTLD.

Both applicants had applied for closed, single-registrant namespaces.

On the regular, open gTLD front, .chat has gone to Donuts after withdrawals from Top Level Spectrum, Radix and Famous Four Media.

.style has also gone to Donuts, after Uniregistry, Top Level Design, Evolving Style Registry and Minds + Machines withdrew their applications.

.tennis is another Donuts win. Applications from Famous Four, Washington Team Tennis and Tennis Australia have been withdrawn, after a failed Community bid from Tennis Australia.

Donuts, finally, beat Famous Four to .bingo.

Afilias and Top Level Spectrum have officially withdrawn their .wine applications. As we reported earlier this week, this leaves Donuts as the sole remaining applicant.

Top Level Spectrum’s bid for .sucks has also been withdrawn, confirming DI’s report from earlier this week that the controversial gTLD has been won by Vox Populi Registry.

But Donuts failed to win .online, withdrawing its application today. Only two applicants — Radix and I-Registry — remain in this once six-way contention set.

We’ll know the winner (my money’s on Radix) in a matter of days, I expect.

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Donuts wins .wine auction

Kevin Murphy, November 4, 2014, Domain Registries

Donuts has become the only applicant for .wine and .vin after winning a private auction for .wine, according to sources familiar with the situation.

I gather that the auction, which saw Donuts knock out rival applicants Afilias and Famous Four, happened a couple of weeks ago. I don’t know what the winning bid was.

Neither losing application has yet been withdrawn, presumably because the whole contention set has been placed “On Hold” by ICANN pending talks about the protection of wine-making region names.

As we reported yesterday, ICANN seems to be currently acting as a middleman between Donuts, European governments and wine-makers that want so-called “geographic indicators” specially protected.

A letter (pdf) from ICANN CEO Fadi Chehade to the French government indicated that ICANN expects to make GIs protected, contractually, with the successful .wine and .vin applicants (now, it seems, Donuts).

Domains such as larioja.wine and bordeaux.vin seem set to enjoy some form of protection, reserved for use by eligible parties only, if these talks pan out the way Chehade expects them to.

Donuts was the only applicant for .vin.

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Ebola 1 – ICANN 0 as Marrakech dumped for Singapore

Kevin Murphy, November 4, 2014, Domain Policy

Ebola has claimed its first Moroccan victim, in the form of ICANN 52.

The organization confirmed overnight that its next public meeting will not be held in Marrakech next February after all.

Instead, the ICANN community will head to Singapore, and the now-familiar halls of the Raffles Convention Center.

ICANN had previously said it was reconsidering Marrakech due to the worry of African travel restrictions in light of the Ebola virus, which has infected over 13,000 people in West Africa.

While Morocco, thousands of kilometers away, has not recorded any cases, there’s concern that large international gatherings, such as the African Cup of Nations or ICANN 52, could import the disease.

ICANN did not mention Ebola in its announcement today, however.

Instead, it said that is relocating the meeting to Singapore due to the overworked community’s desire to stick to its three-meetings-per-year schedule.

It will head to Marrakech in early 2016 instead.

The Singapore meeting will be held on the same dates — February 8 to 12 — at a location that will be familiar to regular ICANN travelers. ICANNs 41 and 49 have been held there in the last few years.

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For only the second time, ICANN tells the GAC to get stuffed

Kevin Murphy, November 3, 2014, Domain Policy

ICANN’s board of directors has decided to formally disagree with its Governmental Advisory Committee for what I believe is only the second time in the organization’s history.

In a letter to new GAC chair Thomas Schneider today, ICANN chair Steve Crocker took issue with the fact that the GAC recently advised the board to cut the GNSO from a policy-making decision.

The letter kick-starts a formal “Consultation Procedure” in which the board and GAC try to reconcile their differences.

It’s only the second time, I believe, that this kind of procedure — which has been alluded to in the ICANN bylaws since the early days of the organization — has been invoked by the board.

The first time was in 2010, when the board initiated a consultation with the GAC when they disagreed about approval of the .xxx gTLD.

It was all a bit slapdash back then, but the procedure has since been formalized somewhat into a seven-step process that Crocker outlined in an attachment to his letter (pdf) today.

The actual substance of the disagreement is a bit “inside baseball”, relating to the long-running (embarrassing, time-wasting) saga over protection for Red Cross/Red Crescent names in new gTLDs.

Back in June at the ICANN 50 public meeting in London, the GAC issued advice stating:

the protections due to the Red Cross and Red Crescent terms and names should not be subjected to, or conditioned upon, a policy development process

A Policy Development Process is the mechanism through which the multi-stakeholder GNSO creates new ICANN policies. Generally, a PDP takes a really long time.

The GNSO had already finished a PDP that granted protection to the names of the Red Cross and Red Crescent in multiple scripts across all new gTLDs, but the GAC suddenly decided earlier this year that it wanted the names of 189 national Red Cross organizations protected too.

And it wasn’t prepared to wait for another PDP to get it.

So, in its haste to get its changing RC/RC demands met by ICANN, the GAC basically told ICANN’s board to ignore the GNSO.

That was obviously totally uncool — a slap in the face for the rest of the ICANN community and a bit of an admission that the GAC doesn’t like to play nicely in a multi-stakeholder context.

But it would also be, Crocker told Schneider today, a violation of ICANN’s bylaws:

The Board has concerns about the advice in the London Communiqué because it appears to be inconsistent with the framework established in the Bylaws granting the GNSO authority to recommend consensus policies to the Board, and the Board to appropriately act upon policies developed through the bottom-up consensus policy developed by the GNSO.

Now that Crocker has formally initiated the Consultation Procedure, the process now calls for a series of written and face-to-face interactions that could last as long as six months.

While the GAC may not be getting the speedy resolution it so wanted, the ICANN board’s New gTLD Program Committee has nevertheless already voted to give the Red Cross and Red Crescent the additional protections the GAC wanted, albeit only on a temporary basis.

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