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SnapNames lawsuit: “halvarez” was chasing $1.5 million bonus

Howard Nelson Brady, the former SnapNames VP and alleged shill-bidder known as “halvarez”, was chasing a $1.5 million performance-related bonus, according to a lawsuit filed yesterday.

SnapNames and its parent, Oversee.net, have sued Brady for $33 million, claiming he used the pseudonym “Hank Alvarez” and his privileged access to SnapNames’ auction platform to artificially inflate the sale prices of auctioned domain names.

According to the complaint, Brady started his alleged shill-bidding in order to boost SnapNames’ revenues and boost his potential “earn-out” from the June 2007 acquisition of SnapNames by Oversee.

“The purchase of the SnapNames business was based almost entirely on projections extrapolated from past revenues of SnapNames, which had been artificially inflated by Defendant Brady’s shill-bidding,” the complaint says.

Oversee further claims that, following the acquisition, Brady set about embezzling money from the company by buying domains using his “halvarez” account and then refunding himself some of the purchase price.

The company alleges he made $175,000 that way, before suspicious activity was noticed on his account.

“Hank Alvarez” had a mail drop, a Paypal account, and sometimes sent emails to Brady, which were then forwarded to other members of staff, the lawsuit claims.

The lawsuit is seeking a mountain of cash. Clearly, Oversee and SnapNames are not pulling any punches when it comes to attempting to restore their reputation.

The bulk of the $33 million is made up of punitive damages, but Oversee also wants Brady’s entire salary and other compensation for the period while the alleged activities were taking place.

You can read the complaint in PDF format here.

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Bido going, going, gone

Kevin Murphy, May 4, 2010, Domain Sales

Budget domain name auction house Bido has said it will close its doors tomorrow.

“Bido is ceasing operation as of May 5, 2010. All transactions and accounts will be gracefully finalized and closed,” the company tweeted.

The FAQ on the company’s web site carries the same message.

There’s no word yet on why it’s closing down, but my bet would be it is a cashflow issue.

COO Jarred Cohen just emailed to say that “The reason is nothing beyond obvious, the volume wasn’t sufficient to warrant operation.”

Bido raised its minimum price from $28 to $38 a few days ago, suggesting that it wasn’t really happy with its revenue performance.

According to Bido sales I’ve been looking at recently, not much more than $50,000 a month was passing through its service.

Clearly Bido’s cut wasn’t enough to profitably sustain the company.

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Second-tier TLDs gain aftermarket traction

Kevin Murphy, May 4, 2010, Domain Sales

The average aftermarket selling price of domain names in second-tier TLDs is creeping up, according to the latest numbers from Sedo.

Sedo’s latest quarterly sales review shows that namespaces such as .biz, .info and .org are selling for far better money than they were a year ago.

In fact, the median selling price of .biz, .org, and .net domains is now higher than that of .com.

The price of .biz names, which only accounted for 1% of overall sales, has almost doubled in the last four quarters, up 97% at $537.

The .info namespace fared almost as well, recording a median price of $418, up 91% on the $219 recorded in the second quarter of 2009.

The long-established .org has also appreciated over the last 12 months. Its median price rose 45% to $550.

While there’s no doubt that .com is still where the high-end money is, the median price for a .com was only $510, a 24% increase over the same period.

Sedo has started reporting median prices because big one-off sales can have an impact on the mean averages it also reports.

Its full Q1 Domain Market Study report can be downloaded here.

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Iron Mountain gets into bed with CRS

Iron Mountain and Central Registry Solutions have made a deal to referrer prospective new gTLD applicants to each other’s services.

The companies said that Iron Mountain will refer wannabe registries to CRS for registry services and CRS will refer them to Iron Mountain for data escrow services.

It strikes me that the deal is probably better news for Iron Mountain, given that CRS is actively engaged in seeking out new TLD applicants to partner with whereas Iron Mountain, presumably, is not.

Iron Mountain already does a lot of work with registries and registrars that have to escrow their Whois information under the terms of their ICANN contracts.

Some of these contracts specify the company as the only escrow agent allowed, whereas the current Draft Applicant Guidebook for new gTLD applicants is less prescriptive.

CRS is a partnership of Network Solutions and CentralNIC, manager of the .la ccTLD and a handful of geographical second-level domains such as uk.com and us.com.

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China connection to Go Daddy WordPress attacks

Go Daddy’s hosting customers are under attack again, and this time it looks like it’s more serious.

Reports are surfacing that WordPress sites hosted at Go Daddy, and possibly also Joomla and plain PHP pages there, are being hacked to add drive-by malware downloads to them.

Go Daddy has acknowledged the attacks, blaming outdated WordPress installations and weak FTP passwords, and has put up a page with instructions for cleaning the infection.

Last week, I was told that the first round of attacks was very limited. Today, the attackers seem to have stepped it up a notch.

As a result, Go Daddy could find itself in a similar situation to Network Solutions, which had a couple of thousand customer sites hacked a few weeks back.

The attacks appear to be linked to a well-known crime gang with a Chinese connection.

According to Sucuri, when a Go Daddy-hosted WordPress page is hacked, JavaScript is injected that attempts to redirect surfers to a drive-by attack from the domain kdjkfjskdfjlskdjf.com (don’t go there).

This domain was registered with BizCN.com, an ICANN-accredited Chinese registrar, but its name servers appear to have been created purely for the attack.

The registrant’s email address is hilarykneber@yahoo.com. This connects the attack to the “Kneber” botnet, a successful criminal enterprise that has been operating since at least December 2009.

A Netwitness study revealed the network comprised at least 74,000 hacked computers, and that the bulk of Kneber’s command and control infrastructure is based in China.

Since Kneber is known to be operated by a financially motivated gang, and it’s by no means certain that they’re Chinese, it’s probably inaccurate to suggest there’s something political going on.

However, I will note that Go Daddy was quite vocal about its withdrawal from the .cn Chinese domain name registration market.

Network Solutions, while it was quieter, also stopped selling .cn domains around the same time as the Chinese government started enforcing strict registrant ID rules last December.

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