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Rightside rejects Negari’s $5m new gTLD offer

Rightside has turned down Daniel Negari’s $5 million offer to acquire four of its new gTLDs, according to Negari.

The XYZ.com CEO told DI via email tonight:

I was looking forward to operating .Army, .Dance, .Dentist, and .Vet under the XYZ umbrella. I’m disappointed that Rightside didn’t entertain my offer, especially since I believe $5MM was more than fair. I believe these and other new TLDs are worth more to me than any other registry operator due to my growing enterprise. However, it’s understandable for Rightside to want to monetize on these assets.

Rightside has told him it had reviewed the offer and was not interested, he said.

The offer was made in a March 30 open letter to the company and Securities and Exchange Commission filing and expired last night, April 7.

There was some speculation about whether it was a genuine offer, just an attempt to boost Rightside’s share price, or both.

Negari and his COO, Mike Ambrose, own about 5% of Rightside between them, following an $8.5 million investment.

Rightside’s ability to grow revenue from its new gTLD portfolio has become the focus of attention due to the intervention of activist investor J Carlo Cannell of Cannell Capital, who reckons the company is paying too much attention to rubbish TLDs at the expense of its profitable registrar businesses.

Negari thinks he would be able to grow .army, .dance, .dentist, and .vet.

The largest of those gTLDs is .vet, with about 5,200 names in its zone file. It grew by 794 names in the last 90 days.

The other three are below 3,000 names, and are either shrinking or adding fewer than 10 names per day.

XYZ.com’s second-tier portfolio strings, such as .college, .rent and .theatre, are faring a little better, at least in terms of growth. But they are a little younger, and none are over 10,000 names.

ICANN refuses to play Ted Cruz’s game

Kevin Murphy, April 8, 2016, Domain Policy

ICANN has blown off US senator Ted Cruz by declining to answer a bunch of framed questions about its engagement with China.

In a letter (pdf) to Cruz and fellow senators Michael Lee and James Lankford, ICANN chair Steve Crocker testily explains that ICANN has offices and relationships all over the world, given the nature of its mandate.

There’s a suggestion that ICANN’s board resents the “insinuation” that talking to China means it’s ready to be captured by it or implement its censorship policies.

Crocker wrote:

ICANN does not endorse the views of any particular stakeholder, regardless of the organization’s engagement efforts, the composition of its advisory committees, and where it holds its meetings. In this sense, ICANN’s engagement with China as a global Internet stakeholder does not suggest any level of support for the nation’s government or its policies. Similarly, no endorsement of such matters could reasonably be inferred from the operations of the United States’ largest technology firms operating in China, including Cisco, Dell, HP, IBM, Intel, LinkedIn, Microsoft, Qualcomm and Uber. These firms, like ICANN, do not endorse the policies, laws, and regulations of China simply by operating there. As long as the U.S. Government has a policy of engagement with China, U.S. firms operate there without the insinuation that doing so makes them complicit in China’s censorship.

The letter was written in response to a bullet-pointed list of a few dozen question Cruz has posed in letters over the last couple of months.

The Cruz missives were a fairly obvious fishing expedition, with the senators apparently looking for sticks to beat ICANN with in the form of evidence that the organization is too friendly with the dreaded Chinese.

Some on the right wing of American politics seem to see the transition of ICANN/IANA partially away from US government oversight as a wedge issue they can use to show Obama is happily selling the ‘Murican constitution to China.

But Crocker ducks most of Cruz’s questions, preferring instead to present an alternative narrative.

He does not, for example, give answers to simple factual questions related to former CEO Fadi Chehade’s joining as co-chair of a committee of the China-led World Internet Conference.

Instead, he refers Cruz to a previous letter from Chehade, and notes that Chehade is no longer with ICANN.

He does not answer anything related to XYZ.com’s proposals related to selling .xyz domain names in China, which Cruz reckons could be used to censor the people of Hong Kong.

Neither does he confirm that ICANN pays government-affiliated CNNIC for collocated office space in Beijing, which wasn’t disclosed until it came out at a press conference last month.

I imagine Cruz, in receipt of Crocker’s letter, is feeling much the same as I do when an interviewee waffles in response to simple questions.

Pissed off.

I doubt this exchange is over.

.top adds a quarter million names in a day

Kevin Murphy, February 17, 2016, Domain Registries

The new gTLD .top set a new record for one-day growth, adding almost a quarter million domains on Monday.

The February 16 .top zone file shows 1,343,665 domains, up 238,616 on the day, according to DI stats.

That’s the majority of the 287,950-name growth the whole new gTLD universe experienced that day.

It’s the second example of a single TLD growing by six figures in a day, following .xyz’s 131,000-name growth on February 6.

It seems that the majority of the names were registered via West.cn, a Chinese registrar that sells the names for CNY 4 ($0.60).

It seems we’re looking at a buying spree by a limited number of Chinese investors.

.top is run by Jiangsu Bangning Science & Technology and marketed primarily in Chinese.

It’s currently the second largest new gTLD by zone size, after .xyz.

New gTLDs top 12 million domains

Kevin Murphy, February 9, 2016, Domain Registries

The new gTLD universe passed 12 million domains for the first time today, according to zone files.

Today, we counted 12,001,346 domains across all the 2012-round gTLD zones, up by just under 60,000 names on the day.

Over 50,000 of the new names were split fairly evenly between .xyz and .club, which seem to be the beneficiaries of a domainer surge that’s been going on for the last four days.

As of today, .club has overtaken .wang to be the third-largest zone, with 638,565 names.

It’s taken less than one month for the new gTLDs to add their latest million names.

Our total zone file count topped 11 million on January 12.

.xyz alone has added over 380,000 names since then; .club another 90,000. Most of that growth has come in the last seven days.

Second-placed budget Chinese-run gTLD .top has added over 95,000 names in the last 30 days.

Zone files don’t take account of domains that are registered but don’t have name servers, so the actual number of registered names will be slightly higher.

.xyz passed two million names, growing like crazy

Kevin Murphy, February 9, 2016, Domain Registries

The .xyz gTLD at the weekend became the first new gTLD to pass the two million domains mark, as it experiences ridiculously fast growth.

Its zone file has grown by 274,315 domains in the last seven days, hitting 2,092,346 yesterday.

It added 130,000 names on Saturday alone.

That’s the kind of growth more usually associated with .com, and pre-2012 new TLD launch periods.

It’s reasonable to assume that the majority of these names are being registered for investment purposes. It seems Chinese registrars processed much of the spike.

But XYZ.com isn’t the only registry that saw a big spike over the weekend.

.CLUB Domains’ .club added almost 44,000 names to its zone between Saturday and Monday. Its usual daily add rate is around the 1,000 mark.

.security names priced at $3,000, .theatre at $750

Kevin Murphy, January 20, 2016, Domain Registries

XYZ.com may be best known for its budget .xyz gTLD, but its portfolio is increasingly leaning toward the super-premium end of the industry price range.

The company entered Early Access Period with its .security, .protection and .theatre gTLDs today, and they ain’t cheap.

.security and .protection are expected to carry retail prices of $3,000 a year, when they hit general availability a week from now.

Today, they’re $65,000 apiece, with the price reducing to $35,000, $15,000, $8,750 and $5,000 over the coming days.

Meanwhile, .theatre starts at $64,000, going down to $32,000, $14,000, $7,000 and $4,000 before finally settling at the GA RRP of $750.

All three gTLDs were acquired by XYZ.com from other applicants.

That was also the case for .cars, .car and .auto, which XYZ runs in a joint venture with Uniregistry, where retail prices are roughly $2,500.

In terms of competition, .security and .protection are probably up against .trust, while .theatre may well find itself in competition with .tickets, which has made inroads in Broadway.

.top gTLD tops a million as China goes domain nuts

Kevin Murphy, January 17, 2016, Domain Registries

China-based new gTLD .top has become only the second new gTLD to pass the one-million-domain milestone.

The gTLD, managed by Jiangsu Bangning Science & Technology Co, had 1,000,469 domains in its zone file on Saturday, an increase of 5,808 on the day.

The zone has grown by 453,833 domains in the last 90 days, according to DI PRO stats.

It’s growing just slightly faster, in percentage terms, than new gTLD volume leader XYZ.com’s .xyz.

The rapid growth can no doubt be attributed largely to price, feeding the current Chinese appetite for domain investment.

Its most successful registrar, West.cn (Chengdu West Dimension Digital Technology Co), is currently selling .top names prominently for CNY 4 for the first year. That’s just $0.60.

The registry says that registrants come from 231 countries and regions. On its web site, it highlights France’s Gandi.net and Gibraltar’s budget registrar AlpNames as key international partners.

However, the latest registry reports show that over 90% of its sales are coming from China-based registrars.

Despite .top being a Latin-script TLD, European and North America registrars seem to account for a very small number of registrations.

It’s not even carried by the likes of GoDaddy and eNom.

The third-place 2012-round new gTLD is currently .wang, another Chinese registry, which yesterday had 628,125 names in its zone file.

Number four is .win, which despite being run by Gilbraltar-based Famous Four Media is utterly dominated by sales via Chinese registrars.

At number five is .club, with 552,065 names and a much more international distribution of registrars.

Rightside to auction “xyz” domains at NamesCon

Kevin Murphy, January 5, 2016, Domain Sales

.xyz made a bit of a splash with domain investors in 2015, but is the meaningless string “xyz” inherently attractive? Even at the second level?

Rightside seems to think so.

The registry, which does not operate .xyz, is planning to auction at least four “xyz” domains during next Monday’s live auction at the NamesCon conference in Las Vegas.

Rightside today disclosed that xyz.sale, xyz.market, xyz.news and xyz.live will be among about a dozen registry-reserved short domain names– such as q.sale and z.pub — it will attempt to sell.

The only meaningful domain on its list is the absolutely fantastic, category-killing viral.video.

It’s difficult to see the “xyz” names as anything other than attempt to cash in on the popularity of .xyz domains among the investors, many of them Chinese, currently pumping money into the domain market.

XYZ.com’s .xyz gTLD has over 1.7 million domains in its zone file today, making it the largest-volume new gTLD by a considerable margin.

I’m not sure there’s any causal connection here, but it should probably be noted that Daniel Negari and Michael Ambrose, XYZ.com’s CEO and COO respectively, recently acquired a substantial chunk of Rightside.

The two men disclosed November 30 that they had paid over $8.5 million to buy almost 10 million shares — or roughly 5.2% of the company — on the open market.

The NamesCon auction kicks off at 1400 Pacific (2200 UTC) on Monday at the Tropicana in Vegas. It’s being managed by RightOfTheDot and Namejet.

Verisign warns about Chinese .com boom

Kevin Murphy, November 24, 2015, Domain Registries

Verisign has warned investors that the current boom in .com sales is largely coming from Chinese domainers and may not be sustainable.

The company has added an unprecedented 4.1 million domain in .com and .net so far during the fourth quarter.

“While there continues to be demand for domain names globally, the recent increased volume for Verisign’s top level domains, as well as top level domains of other registries, during the fourth quarter is coming largely through registrars in China,” the company said in a Securities and Exchange Commission filing.

It listed several factors that are likely responsible for the sudden uptick, but warned that renewal rates are typically not great.

In the past, Verisign has discussed many factors that affect the demand for domain names, including, but not limited to economic, social, and regulatory conditions, Internet adoption, Internet penetration, and increasing e-commerce. In addition to these factors affecting demand, Verisign is also evaluating additional potential factors unique to China that may also be responsible for the recent increased volume of new registrations in China.

In no particular order, these potential factors, or combination of factors, could include, but may not be limited to, government initiatives in China to develop their online economy such as ‘Internet Plus;’ registry and registrar regulatory requirements; cultural influences such as the popularity of numeric domain names; increasing competition amongst Chinese registrars; potential increases in domain name investment activity; and recent capital markets volatility and access to capital in China.

Verisign cannot predict if or how long this increased pace of gross additions will continue and we cannot at this time predict what the renewal rate for these domain names will be. Verisign has noted in the past that renewal rates for domain names registered in emerging markets, such as China, have historically been lower than those registered in more developed markets.

It’s difficult to imagine that Chinese investors have managed to find four million unregistered domains worth keeping.

There are currently 123,497,852 domains in the .com zone file, according to Verisign’s web site.

Verisign is not the only registry that appears to be benefiting from a deluge of registrations from China.

XYZ.com has seen over 440,000 domains added to its .xyz zone file in the last three weeks, bringing its total to over 1.5 million, which appear to be largely coming through Chinese registrars.

Verisign v XYZ judge confirms both companies suck

Kevin Murphy, November 21, 2015, Domain Registries

Verisign and XYZ.com have both come out of a US lawsuit looking like scumbags.

Explaining his dismissal of Verisign’s false advertising lawsuit against .xyz registry XYZ.com, Virginia judge Claude Hilton today said that XYZ.com’s statements about its registration numbers were “verifiably true”.

At the same time, he confirmed that they came about as a result of a bullshit deal with Network Solutions to bolster .xyz’s launch numbers.

The judge’s ruling confirms for the first time the financial details of the deal between XYZ and Web.com (Network Solutions) that saw .xyz’s registration volume rocket in its first few weeks of general availability. He wrote:

Web.com purchased 375,000 domain names for a price of $8 each totaling $3 million dollars. In exchange, XYZ purchased advertising from Web.com in the form of 1,000 impressions for $10 each, at a total cost of $3 million dollars. Instead of cash exchanging hands, advertising credit was given to XYZ and the .xyz domain names were given to Web.com, who subsequently gave them away as free trials to their subscribers.

In other words, XYZ bought $10,000 of advertising for $3 million and paid for it with $3 million of free .xyz domains — 375,000 of them.

That bogus deal enabled XYZ to report big reg volume numbers without actually, legally, lying,

“The statements regarding Defendants’ revenue and number of registrations are statements of fact that are verifiably true,” the judge wrote.

When the Defendants [XYZ.com] stated they were a market leader in new TLD’s and that they had the most new registrations than any other TLD, they were basing that information off of an accurate zone file. Further, the zone file confirms that there are over 120 million .com registrations and one {1) million .xyz registrations. These statements are also true.

The judge said he was dismissing the suit not just because XYZ wasn’t lying, but also because Verisign couldn’t show that it had been harmed.

The number of .com registrations has actually been going up, he noted.

Much of Verisign’s complaint centered on this ad:

Verisign said the ad lied about the availability of .com domains, which XYZ denied.

The judge said:

The video posted to YouTube is puffery and opinion. It displays no actual domain names, and communicates a subjective measure of value and superiority, not capable of being proven false.

“Puffery” is a term with legal weight in false advertising cases under US law. It basically means that advertisers are allowed to exaggerate. XYZ had in fact used the “puffery” defense.

The judge seems to have relied heavily on zone file analysis to reach his conclusions. He wrote.

according to Plaintiff’s [Verisign’s] own data, .com names are largely unavailable. In a given month, Plaintiff reports that it receives about two (2) billion requests to register <.com> domain names, yet fewer than three (3) million are actually registered.

I believe that “two billion” number refers to how many “attempted adds” Verisign gets every month for .com domains, as reported in its monthly reports with ICANN.

That number would include every automated attempt to register a dropping domain by every registrar.

It’s not a reflection of how many actual human beings attempt and fail to register .com domains and, in my view, it’s worrying that the judge took it to mean that.

In summary, the lawsuit managed to unearth the dirty reality behind XYZ’s launch “success”, whilst also making Verisign look like a petty, petulant, child.

Everybody loses.

Except the lawyers, obviously, who have been paid millions.