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Demand Media in rumored IPO

Kevin Murphy, April 16, 2010, Domain Registrars

Demand Media, which owns number-two domain registrar eNom, could file to go public this summer, the Financial Times has reported.

Widely thought of as a “content mill”, Demand is in the business of mining search and domain data and pumping out content which it can sell ads against.

The FT, using anonymous sources, reports that an IPO, which could happen by November, would value the firm at $1.5 billion. Revenue is estimated to be around $250 million a year.

While selling domain names does not appear to be Demand’s core business, other domain name registrars have a rocky record when it comes to public listings.

Register.com, which used its early-mover advantage to IPO at the tail end of the dot-com boom, ended up going private after low-cost registrars like Go Daddy started eating its lunch.

Go Daddy itself gave the world a glimpse at its finances when it filed its S-1 back in 2006, but CEO Bob Parsons yanked the IPO at the eleventh hour, citing poor market conditions and his inability to keep his mouth shut during the traditional pre-offering Quiet Period.

Parsons said at the time that it’s hard to show a profit under GAAP as a growing registrar, due to the way registrations are accounted for.

Tucows, meanwhile, has managed to tick along quietly with a listing on the small-cap markets for years.

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Porn group starts anti-XXX campaign

Kevin Murphy, April 15, 2010, Domain Registries

Now that the Christians appear to have quietened down, the adult entertainment industry has unleashed its own letter-writing campaign aimed at crippling ICM Registry’s bid for the .xxx TLD.

The Free Speech Coalition has started urging its members to lobby ICANN with emails demanding that the .xxx proposal is rejected.

The front page of its web site started carrying the call to action earlier today, already resulting in over a dozen form complaints.

The anti-porn complaints that have flooded ICANN’s forums for the last week focussed largely on the alleged harmful effects of porn, and will probably be politely ignored.

But unlike the Christians, the FSC has read the background documents – which request comments on how ICANN should process ICM’s application – and its letters are therefore on-topic

They urge ICANN to “Adopt Option #3” by agreeing with the dissenting minority view of the Independent Review Panel that recently ruled ICANN was unfair to reject ICM back in 2007.

“Regardless of the option chosen, I ask that ICANN continue to consider the widespread opposition of the sponsored community in any further decisions concerning a .XXX sTLD,” the letters add.

The campaign is not unexpected, but it won’t make ICANN’s board of directors’ decision any easier. After all, .xxx is ostensibly a “sponsored” TLD, and a significant voice within its potential customer base does not appear to want it.

There may also be other power games at play.

ICM president Stuart Lawley claimed during his IRP cross-examination in September that the FSC had offered to support ICM in 2003, but only if it could control the sponsoring organization and collect the associated $10 per domain per year.

The ICANN comment period runs until May 10. The FSC’s own comments, from boss Diane Duke, are here.

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TLDH sells off domain portfolio, waits for new TLDs

Kevin Murphy, April 15, 2010, Domain Registries

Top Level Domain Holdings has reported blah revenue for its fiscal 2009, as it reorganized itself in preparation for ICANN’s forthcoming new gTLD round.

The company, which owns registry services firm Minds + Machines and has interests in dotNYC and DotEco, is listed on London’s low-cap AIM market.

It today reported revenue for the 12 months to October 31, 2009 of £315,000 ($487,000), up from £232,000 ($358,000) a year earlier, with an operating loss of £1.4 million, ($2.2 million) down from £1.5 million ($2.3 million).

TLDH also revealed that it sold off its entire parked domain name portfolio for $250,000 last November, after the end of its financial year, after it found parking revenue on the decline:

The Company’s domain name portfolio comprising mainly German and other European parked domain names that receive direct navigation and search traffic which can be monetized through search links to generate click-through advertising revenues generated a lower revenue in the period and were subsequently sold following the period end for US$250,000 in cash.

TLDH recorded an impairment charge of £154,000 ($238,000) for this transaction, suggesting the company sold its portfolio for approximately half of its previously reported paper value.

The firm says its strategy is “to build a portfolio of gTLD applicants and infrastructure technologies”, and believes ICANN’s recent Nairobi meeting decisions continued “a trend of increasing the barriers to application for non-experts”.

TLDH still looks like it has more than enough cash on hand to see it through to when ICANN begins officially accepting new TLD applications, barring further delays, with £4.3 million ($6.6 million) in the bank at the end of October.

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ICANN publishes Whois reform wish-list

Kevin Murphy, April 14, 2010, Domain Policy

ICANN’s latest stab at reforming Whois could lead to lots of useful new features, from more comprehensive search to more uniform privacy services.

The organization has released a staff report, “Inventory of WHOIS Service Requirements”, outlining 12 technical areas where Whois could be improved.

If the ideas were implemented, Whois records could one day contain your Twitter address or instant messaging screen name, as well as the current set of data.

The proposals could also lead to registrant search features in Whois as standard, allowing users to pull up a list of all the domains registered by any given individual.

That kind of service is only currently available at a premium price from the likes of DomainTools. The ICANN proposals could bake it into the spec.

The new paper, apparently released yesterday, was designed to outline technical requirements that might be needed to support future policies on Whois.

So while it’s not policy, it’s a good indicator of where ICANN thinks policy may head.

It concludes with a list of 12 “possible requirements” for the GNSO and other stakeholders to consider over the next couple of months before the Brussels meeting.

Here are the highlights: …continue reading

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WordPress founder criticizes NSI’s security

Kevin Murphy, April 13, 2010, Domain Registrars

WordPress founder Matt Mullenweg had a few harsh words for top-five domain registrar Network Solutions today, after a whole bunch of NSI-hosted blogs were hacked over the weekend.

It appears that NSI’s web hosting operation, which includes a one-click WordPress installation service, was failing to adequately secure database passwords on shared servers.

Or, as Mullenweg blogged: “A web host had a crappy server configuration that allowed people on the same box to read each others’ configuration files.”

WordPress, by necessity, stores its database passwords as plaintext in a script called wp-config.php, which is supposed to be readable only by the web server.

If the contents of that file are viewable by others, a malicious user could inject whatever content they like into the database – anything from correcting a typo in a blog post to deleting the entire site.

That appears to be what happened here: for some reason, the config files of WordPress blogs hosted at NSI gave read permissions to unauthorized people.

The cracker(s) who noticed this vulnerability chose to inject an HTML IFrame into the URL field of the WordPress database. This meant visitors to affected blogs were bounced to a malware site.

Mullenweg is evidently pissed that some news reports characterized the incident as a WordPress vulnerability, rather than an NSI vulnerability.

NSI appears to have corrected the problem, resetting its users’ database passwords as a precaution. Anybody making database calls in custom PHP, outside of the wp-config.php file, is going to have to go into their code to update their passwords manually.

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