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Donuts makes weird investment in startup

Donuts has made a surprising investment in a company that makes geolocation technologies.

The new gTLD registry operator announced yesterday that it has something called Donuts Labs, through which it will make “strategic investments” in “similar” companies.

Its first investment is in California tech startup GeoFrenzy, which operates in the emerging “geofences” space.

A geofence is a virtual perimeter around a defined geographic location.

Basically, GeoFrenzy has divided the world up into square-centimeter chunks and stores data about who owns these chunks in a registry database.

Using the GPS service you’ll find in all modern mobile devices, apps using the technology can figure out when you walk into or out of a registered, fenced-off area, triggering some behavior.

Such services are believed to have applications ranging from logistics to advertising. One example on the GeoFrenzy web site says that its database and software could be used to keep drones out of restricted airspace.

The terms of the deal with were not disclosed, but it’s surprising news for a couple of reasons.

First, Donuts appears to have cash to throw around on pet side-projects at a time when one would assume, as an early-stage company itself, it would be more focused on growing its fledgling new gTLD business.

Second, the press release makes out that there are technology synergies between the companies.

GeoFrenzy CEO Sean Eilers is quoted as saying: “Their expertise in managing a highly scalable registry and their experience with innovative DNS technologies makes Donuts an ideal fit as an investor and strategic partner.”

But to the best of my knowledge Donuts doesn’t have any experience managing a highly scalable registry. It outsources all of that kind of thing to Rightside, doesn’t it?

Donuts says it will be making more, similar investments in future.

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.shop lawsuit falling to pieces

Kevin Murphy, April 29, 2016, Domain Policy

Commercial Connect’s lawsuit against ICANN appears to be on its way out, as ICANN claims the .shop applicant has “abandoned” the case.

The company sued ICANN in January in an attempt to prevent .shop gTLD being sold off via an ICANN last-resort auction.

It failed, and the auction raised a $41 million winning bid from GMO Registry.

It transpired that the company didn’t bother telling its lawyer that it had signed an agreement not to sue when it applied for .shop, and the lawyer jumped ship less than two weeks after the complaint was filed.

The lawyer told the court the waiver had been “buried among thousands and thousands of documents on a USB drive” and that he hadn’t noticed it before filing the suit.

In a court filing (pdf) yesterday, ICANN said that Commercial Connect had failed to secure a new lawyer, had failed to formally serve ICANN with the complaint, and had missed its April 25 deadline to argue against ICANN’s motion to dismiss the case.

For these reasons, it said, the case should be chucked.

Commercial Connect applied for .shop in 2000 and again in 2012 and has used every appeals mechanism and legal tool at its disposal in order to disrupt competing bids.

GMO’s .shop is currently in pre-delegation testing.

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Verisign facing its own activist investor

Kevin Murphy, April 29, 2016, Domain Registries

While new gTLD registries Rightside and Minds + Machines have faced board-room challenges by activist investors in recent months, it seems industry heavyweight Verisign is contended with a similar problem.

John Chevedden, once described as an “economy class” activist due to his relatively small stakes, is attempting to give smaller Verisign shareholders the ability to propose directors for the company’s board.

Rather than attempting to gut the companies he invests in, he tries to make the odd incision into their corporate governance in order to give smaller investors a greater voice in their companies.

He’s filed a proposal, which will be voted on at Verisign’s June 9 annual general meeting, for a new “proxy access” bylaw.

Essentially, the proposal would allow an unlimited number of shareholders who collectively own over 3% of the company’s stock to propose two people for director elections (or 25% of the board, whichever is greater).

But Verisign’s current board is recommending that shareholders vote against the proposal, saying it’s “unnecessary”.

The company says that it plans to introduce its own proxy access bylaw that would be slightly different.

The Verisign alternative would limit the size of the nominating gang to 20 shareholders. That would mean that each individual investor would have to own much larger stakes, in order to pass the 3% threshold and nominate director candidates.

Verisign says Chevedden’s proposal, which does not limit the number of small shareholders involved, would be expensive and unwieldy to manage.

Chevedden reportedly has quite a decent success rate with these kinds of proposals.

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Two more dot-brands self-terminate

Kevin Murphy, April 29, 2016, Domain Registries

The dot-brand dead-pool is now up to three gTLDs.

FLSmidth, which supplies machinery to the cement industry, and Emerson Electric, which also makes industrial machinery, have both decided that they don’t need their new gTLDs.

The affected gTLDs are .flsmidth and .emerson.

Both companies have filed cursory notices of termination with ICANN, indicating that they no longer wish to have a new gTLD Registry Agreement.

Neither company has yet received a preliminary determination from ICANN, a step that will lead to a month-long public comment period before the contracts are terminated.

In Emerson’s case, .emerson has not been delegated so there will be no impact on the number of TLDs in the root.

FLSmidth’s dot-brand has been live since September 2014, but the company never made the transition away from its .com.

While registry reports show that six domains have been registered, its latest zone file shows only the obligatory nic.flsmidth domain is active.

The first new gTLD to cop out was .doosan, the dot-brand for Korean conglomerate Doosan. It took over four months from filing its notice last October to the TLD being retired.

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.web has an auction date

Kevin Murphy, April 29, 2016, Domain Registries

The .web gTLD will go to auction July 27, according to ICANN.

The organization released an updated auction schedule (pdf) on Wednesday night that also slates .kids/.kid for an auction on the same day.

Both auctions have confusing “indirect contention” elements, where two strings were ruled confusingly similar.

With .web, it’s lumped in with Vistaprint’s application for .webs, which lost a String Confusion Objection filed by Web.com.

Under ICANN rules, .webs is confusingly similar to to Web.com’s .web, but not to the other six .web applications.

This means that Vistaprint and Web.com basically are fighting a mini contention set auction to see who gets their applied-for gTLD.

If Web.com wins the auction for .web, Vistaprint cannot have .webs. However, if any other .web applicant wins, Vistaprint can go ahead with .webs.

Either way, there will be a .web delegated this year. Google, Donuts, Radix, Afilias, Schlund Technologies, Nu Dot Co are all contenders.

In the case of .kids/.kid, the one applicant for .kid — Google — won SCOs against DotKids Foundation and Amazon by default because both .kids applicants failed to respond to the complaints.

DotKids Foundation recently lost a Community Priority Evaluation, enabling the auction to go ahead.

Because Google is in contention with both .kids applicants, only one of the two strings will ultimately be delegated — .kids and .kid will not coexist.

The only other scheduled auction right now is that of .doctor, which is planned for May 25. Radix, Donuts and The Medical Registry will fight it out in this rather less complex battle.

It’s worth noting that if any of these contention sets unanimously choose to resolve their differences via private auction, none of the ICANN auctions will go ahead.

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