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Famous Four VP goes solo, claims $400,000 sale

Kevin Murphy, September 22, 2016, Domain Services

Former Famous Four Media VP of sales Richard Downs has launched a new consultancy business aimed at new gTLD registry operators.

The new company, GTLD Systems is offering a multitude of services but is mainly a way for smaller registries to outsource their sales and marketing operations.

Downs told DI an early success was a recent $400,000 deal, selling a few FFM premiums (in .review and .download) to a single end user. He says he has a pipeline that he hopes will bring his total sales to $1 million before the end of the year.

He said he’s sold over $3 million in premiums over the last few years at FFM.

Spain-based Downs said that he has three employees, one a Chinese-speaker, in three different western-European countries.

Among the services on offer are premium list creation and sales, registrar channel management, Chinese regulatory approval consulting, supplier negotiations and marketing consulting.

Downs was with FFM for about three years. Before that, he was in digital recruitment.

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Watch: Hollywood actors trash Trump, promote .vote

Kevin Murphy, September 22, 2016, Domain Registries

Robert Downey Jr, Scarlett Johansson, James Franco, that bloke who plays the Hulk, and a “shit-ton of famous people” are starring in a new anti-Trump attack viral that promotes a .vote domain name.

The video, put together by cult director Joss Whedon, gently spoofs quick-cut celebrity-ensemble appeals, while making a serious point about US presidential candidate Donald Trump being a threat to domestic race relations and global security.

It directs viewers to, where they are encouraged to register to vote in the November 8 poll.

Here it is:

It’s probably the highest-profile “in the wild” spotting of a .vote domain to date.

While I doubt it will work magic on .vote registration volumes, it’s certainly no bad thing for the visibility of new gTLDs in general.

At time of writing, the video had received about 1.2 million views on YouTube, less than 24 hours after its release.

.vote is an Afilias gTLD with post-registration usage restrictions. It currently has about 1,800 names in its zone file but only one domain in the Alexa one million most-visited sites.

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Could ICANN reject Verisign’s $135m .web bid?

Kevin Murphy, September 21, 2016, Domain Registries

ICANN is looking into demands for it to throw out Verisign’s covert $135 million winning bid for the highly prized .web gTLD.

ICANN last week told the judge hearing Donuts’ .web-related lawsuit that it is “currently in the process of investigating certain of the issues raised” by Donuts through its “internal accountability mechanisms”.

Donuts is suing for $22.5 million, claiming ICANN should have forced Nu Dot Co to disclose that its .web bid was being secretly bankrolled by Verisign and alleging that the .com heavyweight used NDC as cover to avoid regulatory scrutiny.

ICANN’s latest filing (pdf), made jointly with Donuts, asked for an extension to October 26 of ICANN’s deadline to file a response to Donuts’ complaint.

It was granted, the second time the deadline has been extended, but the judge warned it was also the final time.

The referenced “internal accountability mechanism” would seem to mean the Cooperative Engagement Process — a low-formality bilateral negotiation — that Donuts and fellow .web bidder Radix initiated against ICANN August 2.

The filing states that the “resolution of certain issues in controversy may be aided by allowing [ICANN] to complete its investigation of [Donuts’] allegations prior to the filing of its responsive pleading.”

In other words, Donuts is either hopeful that ICANN may be able to resolve some of its complaints in the next month, or it’s not particularly impatient about the case progressing.

Meanwhile, fellow .web applicant Afilias has demanded for the second time that ICANN hand over .web to it, as the second-highest bidder, throwing out the NDC/Verisign application.

In a September 9 letter, published last night, Afilias told ICANN to “disqualify and reject” NDC’s application, alleging at least three breaches of ICANN rules.

Afilias says that by refusing to disclose Verisign’s support for its bid, NDC broke the rules and should have its application thrown out.

The company also confirmed on the public record for what I believe is the first time that it was the second-highest bidder in the July 27 auction.

Afilias would pay somewhere between $57.5 million and $71.9 million for the gTLD, depending on what the high bid of the third-placed applicant was.

In its new letter, Afilias says NDC broke the rule from the Applicant Guidebook that does not allow applicants to “resell, assign or transfer any of applicant’s rights or obligations in connection with the application”.

It also says that NDC was obliged by the AGB to notify ICANN of “changes in financial position and changes in ownership or control”, which it did not.

It finally says that Verisign used NDC as a front during the auction, in violation of auction rules.

“In these circumstances, we submit that ICANN should disqualify NDC’s bid and offer to accept the application of Afilias, which placed the second highest exit bid,” Afilias general counsel Scott Hemphill wrote (pdf).

Hemphill told ICANN to defer from signing a Registry Agreement with NDC or Verisign, strongly implying that Afilias intends to invoke ICANN accountability mechanisms (presumably meaning the Request for Reconsideration process and/or Independent Review Process).

While Afilias and Donuts are both taking issue with the secretive nature of Verisign’s acquisition of .web, they’re not necessarily fighting the same corner.

Donuts is looking for $22.5 million because that’s roughly what it would have received if the .web contention set had been resolved via private auction and $135 million had been the winning bid.

But Afilias wants the ICANN auction outcome to stand, albeit with NDC’s top bid rejected. That would mean Donuts, Radix, and the other applicants would still receive nothing.

There’s also the question of other new gTLD applications that have prevailed at auction and been immediately transferred to third-party non-applicants.

The most notable example of this was .blog, which was won by shell company Primer Nivel with secretive backing from WordPress maker Automattic.

Donuts itself regularly wins gTLD auctions and immediately transfers its contracts to Rightside under a pre-existing agreement.

In both of those cases, the reassignment deals predated, but were not disclosed in, the respective applications.

There’s the recipe here for a messy, protracted bun fight over .web, which should come as no surprise to anyone.

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Chinese investor pumps $7 million into M+M as .vip pushes firm into profit

Kevin Murphy, September 20, 2016, Domain Registries

Minds + Machines made a profit, kinda, in the first half of the year, due to the popularity of .vip in China.

The company today announced a loss of $1.9 million for the six months to June 30, compared to a $1.6 million loss in the comparable 2015 period, on revenue that was up 115% at $7.4 million.

But factoring out discontinued operations — M+M started to close its registrar and registry back-end businesses during the half — it actually managed to sneak a profit of $56,000.

Its revenue was also unaffected by one-time gains from gTLD auction losses, something which had pumped up its top line regularly for the last few years.

Chairman Guy Elliot said in a statement to the markets that M+M “has successfully been navigated out of troubled waters”.

The turnaround is due in no small part to the success of .vip, which racked up over 400,000 registrations in its first month (back in May), the large majority of which were sold to Chinese investors.

The company said that $5.5 million of the $8 million in H1 billings were made in the first 21 days of .vip’s availability.

Having started 2016 with no sales in Asia whatsoever, it expects 45% of its revenue to come from China by the end of the year.

As a direct consequence of .vip’s sales, M+M has received a £5.5 million ($7.2 million) investment from Goldstream Capital Master Fund I, a Cayman Islands shell company owned by Chinese private equity firm Hony Capital.

Hony, which manages $10 billion in assets, is perhaps best known for owning the pizza restaurant chain Pizza Express, which it acquired for $1.54 billion in 2014.

According to its web site, Hony’s own investors include three large Chinese state-owned investment vehicles.

The investment deal includes clauses preventing Hony from trying to get a director on M+M’s board and/or launching a hostile takeover bid.

It will own 7.17% of M+M after buying 50 million shares at £0.13 each, assuming M+M’s simultaneously announced £13 million ($17 million) share buyback is fully subscribed.

M+M opened a subsidiary in China (a Wholly-Owned Foreign Enterprise) during the half, in order to better serve the Chinese market and comply with Chinese government regulations.

It simultaneously laid off 44% of its staff in the US — engineers no longer needed due to the shift into an almost entirely marketing-focused business — and expects to end the year with only 13 employees there.

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Barcelona picked for ICANN 63

Kevin Murphy, September 20, 2016, Domain Policy

ICANN will head to Barcelona, Spain for its 63rd public meeting, the organization’s board of directors has decided.

ICANN 63, that year’s Annual General Meeting, is due to take place October 20 to October 26, 2018. The specific venue has not yet been revealed.

That’s quite a way in the future. Venues have not yet been selected for the first two meetings of 2018, which will take place in ICANN’s North America and Latin America and Caribbean regions.

We’re currently up to ICANN 57, which is due to start in about six weeks in Hyderabad, India (start looking into visas today if you haven’t already).

Next year, meetings will be held in Copenhagen in March, Johannesburg in June and Abu Dhabi in October.

Barcelona was selected for 63 at an ICANN board meeting last week.

The city, Spain’s second most populous, is in the Catalonia region of Spain and is home to the .cat sponsored gTLD.

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