Latest news of the domain name industry

Recent Posts

Famous Four makes $175,000 from .webcam porn names

Kevin Murphy, June 9, 2014, Domain Sales

Famous Four Media has sold a package of 15 .webcam domain names to an unspecified buyer for a total of $175,000.

The deal included tube.webcam, asian.webcam and milf.webcam, which Famous Four described as “adult oriented”.

Whois records for the domains are not yet available.

The .webcam gTLD is due to go to general availability today, alongside .bid and .trade. Together, they’re the registry’s first three gTLDs to hit GA.

It’s not an explicitly adult-oriented gTLD, but “cam” sites are a pretty big deal in the world of porn nowadays, so it’s easy to guess where .webcam will get most of its action.

The $175,000 deal — almost the full new gTLD application fee — was brokered by HuntingMoon, which specializes in adult industry names, in collaboration with Media Options and Domain Broker UK.

The deal follows hot on the heels of the $3 million sale of sex.xxx.

How much are new gTLDs really costing trademark owners? We have some numbers.

If there’s one thing we’ve learned from the last six months of new gTLDs, it’s that predictions about massive levels of defensive registrations were way off the mark.

New gTLDs are not seeing anywhere near the same numbers of sales during sunrise periods as their predecessors.

I have managed to collate some data that I think gives a pretty accurate picture of how many sunrise registrations are being made and therefore how much new gTLDs are costing trademark owners.

About 128 gTLDs have finished their sunrise periods to date, and I have the sunrise sales figures for 101 of them. All of these numbers were provided by the respective registry operator.

The biggest sunrise, per these numbers, was for .clothing, which had 675 registrations. That’s 5.97% of the 11,301 overall names in the .clothing zone file today, over three months after launch.

At the other end of the scale is شبكة. (“.shabaka” or “.web” in Arabic), which sold just five names during its sunrise, the first of the program, which was restricted to Arabic trademarks.

The total number of sunrise sales across across all 101 gTLDs is 14,567, making for an average of 144.2 domains per new gTLD sunrise.

Sunrise currently accounts for 1.87% of all names in these 101 gTLDs, but that’s an artificially high number because some of the gTLDs I have sunrise numbers for are not yet in general availability.

But compare the real numbers to .co, which sold over 11,000 names at sunrise when it launched in summer 2010, or .xxx, which took 80,000 sunrise applications in late 2011.

Trademark owners are not defensively registering with anywhere near the same fervor as they once did.

If that 144.2 average names holds true for all 128 gTLDs that have completed sunrise, we can approximate that 18,461 names have been sold during sunrise periods to date.

I should point out that I’m assuming in these calculations that all sunrise registrations are “defensive” and that brand owners are not defensively registering during general availability.

Neither of those assumptions will be fully true.

Not all sunrise sales are made to genuine brand owners, of course. Some number of generic dictionary domains have been registered by people who obtained trademarks just in order to get the matching domain.

And only a psychic could know whether a GA registration is “defensive” or not at this stage.

But let’s assume that every sunrise reg went to a genuine brand owner. How much have they had to pay for these names?

It’s difficult to calculate a precise dollar value because each registry has a different pricing scheme and sometimes the price of a name can vary even within a specific given TLD.

I looked to the prices listed at 101domain, which has pretty exhaustive coverage of new gTLDs, for a guide.

The average first-year cost for a sunrise registration in the 75 or so new gTLDs currently being sold to trademark owners at 101domain is a little shy of $165.

Assuming that’s a good guide for pricing in sunrise periods that have already closed, we can calculate that 18,461 names at $165 a pop equals $3,046,089 out of the pockets of trademark owners in the first year.

But the sunrise fees are not the only costs, of course. In order to participate in a sunrise you must first register your mark in the Trademark Clearinghouse.

There are 30,251 marks registered in the TMCH, according to the TMCH itself. At $150 a pop — the minimum you can pay for a TMCH registration — that’s $4,537,650 spent on defensive measures.

Add in the cost of the sunrise registrations and a generous $100,000 to cover the cost of the 50 Uniform Rapid Suspension cases that have been filed to date and the total cost to brand owners so far over the first 128 new gTLDs comes to $7,683,739.

Whether this is “a lot” or not probably depends on your perspective.

It’s certainly not the billions of dollars that were being predicted by some as recently as last year.

In September the Better Business Bureau and the Coalition Against Domain Name Abuse speculated that 600 “open” new gTLDs could lead to $10 billion being spent on defensive registrations.

That statement was made in a press release calling for stronger cybersquatting legislation in the US.

But if 101 open gTLDs leads to $3,046,089 being spent, 600 such gTLDs should lead to a total cost of about $18 million, not including the fixed TMCH costs (which probably won’t grow very fast in future).

That’s not the same ballpark, not the same league, not even the same sport.

Sex.xxx sells for $3m as PussyCash cites SEO value

Kevin Murphy, May 29, 2014, Domain Sales

ICM Registry has sold a package of 40 premium .xxx domain names with a total value of $5 million to Barron Innovations, operator of the PussyCash porn affiliate network.

The headline sale in the batch is sex.xxx, which carried a standalone $3 million price tag.

That’s the first .xxx name to sell for a seven-figure sum. The previous record for a single name was $500,000 for gay.xxx.

It’s also the highest-priced non-.com domain name ever sold, according to publicly available sale prices.

It beats shopping.de, which went for the euro equivalent of $2.85 million in 2008, making sex.xxx the 10th most-expensive domain we know about.

Sex.com is of course the highest priced domain ever sold, going for $13 million in 2010.

According to ICM, Barron bought cam.xxx, phone.xxx and black.xxx for undisclosed six-figure prices. The deal also included web.xxx, market.xxx, mate.xxx and education.xxx, the company said.

Barron is evidently affiliated with webcam-oriented porn sites ImLive.com and Webcamwiz.com, as well as the related lead-generation program PussyCash.com.

PussyCash was subject to this glowing review (NSFW) in the adult industry press recently and is apparently a bit of a big deal in that world.

ICM tells me Barron had been studying the search engine optimization performance of .xxx for some time before signing the deal. Shay Efron, spokesperson for the buyer, said in a press release:

We have studied the undeniably superior performance of .XXX domains in terms of SEO and conversion rates and decided to make a huge splash by acquiring the very best keyword generic names available. We evaluated SEX.xxx, the flagship domain, and decided it has the potential to became the leading brand in the entire adult industry, so it was an obvious part of a very large deal.

The company intends to develop the names, according to a press release.

This is pretty good news for ICM (because of the cash) but it’s also promising for new gTLDs as a whole.

I’m not privy to Barron’s research, but if it’s confident enough in the SEO benefits of .xxx to spend $3 million on one name, that might be a signal that other niche gTLDs could see the same benefits in future.

It might not happen overnight — ICM launched .xxx two and a half years ago — but premium names could appreciate in value, assuming new registries manage to get some actual users building sites.

Republicans introduce pointless ICANN bill

Kevin Murphy, March 28, 2014, Domain Policy

Three Republican Congressmen have introduced a bill that would prevent the US government removing itself from oversight of the DNS root zone.

For a year.

The inappropriately titled Domain Openness Through Continued Oversight Matters (DOTCOM) Act is designed to:

prohibit the National Telecommunications and Information Administration from relinquishing responsibility over the Internet domain name system until the Comptroller General of United States submits to Congress a report on the role of the NTIA with respect to such system.

Basically, the NTIA would be barred from walking away from root zone oversight until an analysis of the advantages and disadvantages of the transition was published, which would have to happen within a year.

The report would also have to include a definition of “multi-stakeholder”.

The three Republicans who introduced the bill — Representatives Todd Rokita, John Shimkus, and Marsha Blackburn — either have no idea what they’re talking about, or they’re being intellectually dishonest.

Blackburn said in a press release:

We can’t let the Internet turn into another Russian land grab. America shouldn’t surrender its leadership on the world stage to a “multistakeholder model” that’s controlled by foreign governments. It’s imperative that this administration reports to Congress before they can take any steps that would turn over control of the Internet.

Shimkus said:

In the month of March alone we’ve seen Russia block opposition websites, Turkey ban Twitter, China place new restrictions on online video, and a top Malaysian politician pledge to censor the Internet if he’s given the chance. This isn’t a theoretical debate. There are real authoritarian governments in the world today who have no tolerance for the free flow of information and ideas. What possible benefit could come from giving the Vladimir Putins of the world a new venue to push their anti-freedom agendas?

This is hysterical nonsense.

Not only has ICANN no intention of allowing the IANA function to be controlled by foreign governments, the NTIA has explicitly stated from the start that no governmental solution would be acceptable.

It’s also ironic that the only two governments to ever consider censoring the root zone were the European Commission and the United States, under the Republican Bush administration.

The current expectation, assuming community talks proceed as swiftly as hoped, is for stewardship of the IANA function to leave the NTIA’s hands when the current contract expires in October 2015.

Even if the DOTCOM (really?) Act were to be passed into US law this year, it shouldn’t have any serious impact on the timing of the root transition.

With that in mind, the three-page bill (pdf) looks quite a lot like an extended press release, rather than a serious attempt to keep the root in US hands.

Who runs the internet? An ICANN 49 primer

Kevin Murphy, March 24, 2014, Domain Policy

The ICANN 49 public meeting is kicking off here in Singapore right now, and control of the domain name system is going to be the hottest of hot topics for the next four days.

Two Fridays ago the US government announced its plan to remove itself from oversight of key internet functions currently managed by ICANN, causing a firestorm of controversy in the US.

A lot of the media commentary has been poorly informed, politically motivated and misleading.

According to this commentary, the move means that regimes more repressive that the United States government are going to take over the internet, killing off free speech.

Here I present a backgrounder on the issue, a primer for those who may not be familiar with the history and the issues. ICANN addicts may find the latter half of the piece interesting too, but first…

Let’s go back to basics

The issue here is control over the DNS root zone file. Basically, the root zone file is a 454K text file that lists all the top-level domains that are live on the internet today.

Each TLD is listed alongside the DNS name servers that it is delegated to and control it. So .com has some name servers, .uk has some name servers, .info has some name servers, etc.

If an internet user in San Francisco or London or Ulan Bator tries to visit google.com, her ISP finds that web site by asking the .com zone file for its IP address. It finds the location of the .com zone file (managed by Verisign) in turn by asking the root zone file.

The root zone files are served up by 13 logical root zone servers named A through M, managed by 12 different entities. Verisign runs two. ICANN runs one. Most are US-based entities.

Every root server operator agrees that Verisign’s root is authoritative. They all take their copies of the root zone file from this server. This keeps the data clean and consistent around the world.

So Verisign, in terms of actually sitting at a keyboard and physically adding, deleting or amending entries in the root zone file, has all of the power over the internet’s DNS.

Verisign could in theory assign .uk or .xxx or .com to name servers belonging to Canada or the Vatican or McDonalds or me.

But in practice, Verisign only makes changes to the root zone when authorized to do so by the US National Telecommunications and Information Administration, part of the Department of Commerce.

That’s because Verisign’s power to amend the root zone comes from its Cooperative Agreement with NTIA.

Amendment 11 (pdf) of this agreement dates from 1999, a time before Verisign acquired Network Solutions (NSI) and before ICANN had a name and was known as “NewCo”. It states:

NSI agrees to continue to function as the administrator for the primary root server for the root server system and as a root zone administrator until such time as the USG instructs NSI in writing to transfer either or both of these functions to NewCo or a specified alternate entity.

While NSI continues to operate the primary root server, it shall request written direction from an authorized USG official before making or rejecting any modifications, additions or deletions to the root zone file. Such direction will be provided within ten (10) working days and it may instruct NSI to process any such changes directed by NewCo when submitted to NST in conformity with written procedures established by NewCo and recognized by the USG.

So the power to amend the root zone — and therefore decide which TLDs get to exist and who gets to run them — actually lies in NTIA’s hands, the hands of the US government.

NTIA says its role is “largely symbolic” in this regard.

That’s because the power to decide what changes should be made to the root zone has been delegated to ICANN via the “IANA functions” contract.

What you’re looking at here is a diagram, from the latest IANA contract, showing that whatever changes ICANN proposes to make to the root (such as adding a new gTLD) must be authorized by NTIA before somebody at Verisign sits at a keyboard and physically makes the change.

In the diagram, “IANA Functions Operator” is ICANN, “Administrator” is NTIA, and “Root Zone Maintainer” is Verisign.

What NTIA now proposes is to remove itself from this workflow. No longer would ICANN have to seek a US government rubber stamp in order to add a new TLD or change ownership of an existing TLD.

It’s possible that Verisign will also be removed from the diagram. ICANN runs a root server already, which could replace Verisign’s A-root as the authoritative one of the 13.

NTIA says that the Cooperative Agreement and the IANA contract are “inextricably intertwined” and that it will “coordinate a related and parallel transition in these responsibilities.”

If this all sounds dry and technical so far, that’s because it is.

So why is it so important?

An entry in the DNS root zone has economic value. The fact that the record for .com points to Verisign’s name servers and not yours means that Verisign is worth $7 billion and you’re not.

Whoever has power over the root therefore has the ability to dictate terms to the entities that want their TLD listed.

ICANN’s contract with Verisign makes Verisign pay ICANN $0.25 for every .com name sold, for example.

The contract also forces Verisign to only sell its names via registrars that have been accredited by ICANN.

This gives ICANN, by indirect virtue of its control of the root, power over registrars too.

The Registrar Accreditation Agreement contains terms that require registrars to publish, openly, the names and addresses of all of their customers, for example.

Suddenly, control of the root is not only about lines in a database, it’s about consumer privacy too.

The same goes for other important issues, such as free speech.

Should people have the right to say that a company or a politician “sucks”? Most of us would agree that they should.

However, if they want to register a .sucks domain name in future they’re going to have to abide by rules, developed by ICANN and its community, that protect trademark owners from cybersquatting.

Over the course of many years, ICANN has decided that trademark owners should always have the right to preemptively register any domain name that matches their brands. This will apply to .sucks too.

If I, militant vegetarian that I am, wanted to register mcdonalds.sucks after .sucks becomes available, there’s a significant probability that I’m not going to get the opportunity to do so.

Of course, there’s nothing stopping you and I publishing our opinion of a worthless politician or corrupt company in other ways using other domain names, but it remains true that ICANN has essentially prioritized, for very good reasons, the rights of trademark owners over the rights of other internet users.

Theoretically, at some point in the future, ICANN could amend the Registrar Accreditation Agreement to require registrars to, for example, always deactivate a domain name when they receive a cease and desist letter, no matter how unfounded or spurious, from a trademark lawyer.

Suddenly, the web belongs to the IP attorneys, free speech is damaged, and it’s all because ICANN controls the DNS root.

I’m not saying that’s going to happen, I’m just using this as an example of how ruling the root has implications beyond adding records to a database.

What does US oversight have to do with this?

The question is, does the US removing itself from the root zone equation have any impact on what ICANN does in future? Has the US in fact been a good custodian of the root?

Commentators, many of them Republicans apparently seizing on the NTIA’s move as the latest opportunity to bash President Obama’s administration, would have you believe that the answer is yes.

I’m not so sure.

The US in fact has a track record of using its power in ways that would reduce free speech on the internet.

Back in 2005, there was a controversy about ICANN’s decision to add .xxx — a top-level domain for pornography — to the root zone. Whatever you think about porn, this is undeniably a free speech issue.

The US government, under the Bush administration, was initially ambivalent about the issue. Then a bunch of right-wing religious groups started lobbying the NTIA en masse, demanding .xxx be rejected.

The NTIA suddenly switched its position, and actually considered (ab)using its power over the root zone to block .xxx’s approval and therefore appease the Republican base.

This all came out due to .xxx operator ICM Registry’s Freedom of Information Act requests, which were detailed in the the declaration (pdf) of an Independent Review Panel — three neutral, respected judges — that oversaw ICM’s appeal against ICANN:

Copies of messages obtained by ICM under the Freedom of Information Act show that while officials of the Department of Commerce concerned with Internet questions earlier did not oppose and indeed apparently favored ICANN’s approval of the application of ICM, the Department of Commerce was galvanized into opposition by the generated torrent of negative demands, and by representations by leading figures of the so-called “religious right”, such as Jim Dobson, who had influential access to high level officials of the U.S. Administration. There was even indication in the Department of Commerce that, if ICANN were to approve a top level domain for adult material, it would not be entered into the root if the United States Government did not approve

US lobbying via ICANN’s Governmental Advisory Committee and other channels had the effect that ICANN rejected ICM’s .xxx application. It’s only because ICM was prepared to spend years and millions of dollars appealing the decision that .xxx was finally added to the root.

When you read an article claiming that the US government relinquishing its root oversight role will have a negative effect on free speech, ask yourself what the record actually shows.

The .xxx case is the only example I’m aware of the US leveraging or preparing to leverage its oversight role in any way. On free speech, USG is 0 for 1.

The US is also a powerful member of the Governmental Advisory Committee, the collection of dozens of national governments that have a strong voice in ICANN policy-making.

Under the rules of the new gTLD program, the GAC has right to veto any new gTLD — prevent it being added to the DNS root zone — if all the governments on the GAC unanimously agree to the veto.

Currently, there’s a controversy about the proposed gTLD .amazon, which has been applied for by the online retail behemoth Amazon.

Latin American countries that count the Amazonia region and Amazon river as part of their territories don’t want it approved; they believe they have the better rights to the .amazon string.

Despite this outrage, the GAC initially could not find unanimous consensus to veto .amazon. It transpired that the US, no doubt protecting the interests of a massive US-based corporation, was the hold-out.

Last July, NTIA decided to drop its opposition to the veto, leading to a GAC consensus that .amazon should be rejected.

In its position paper (pdf) announcing the .amazon veto block reversal, NTIA said the US “affirms our support for the free flow of information and freedom of expression”.

By its own definitions, the US made a decision that harmed free expression (not to mention Amazon’s business interests). It seems to have done so, again, in the name of political expediency.

I’m not saying that the US decision was right or wrong, merely that the record again shows that it’s not the great protector of free speech that many commentators are making it out to be.

What should replace the US?

The question for the ICANN community this week in Singapore and over the coming months is what, if anything, should replace the US in terms of root zone oversight.

The NTIA has been adamant that a “multi-stakeholder” solution is the way to go and that it “will not accept a proposal that replaces NTIA’s role with a government-led or an inter-governmental solution.”

The weirdness in this statement, and with the whole transition process in general, is ICANN is already a multi-stakeholder system.

In light of the US’ longstanding “hands off” approach (with the aforementioned exception of .xxx), does ICANN even need any additional oversight?

Today, legislative power in ICANN resides with its board of directors. The ICANN staff wield executive control.

In theory and under ICANN’s extensive governance rules, the board is only supposed to approve the consensus decisions of the community and the staff are only supposed to execute the wishes of the board.

In practice, both board and staff are often criticized for stepping beyond these bounds, making decisions that do not appear to have originated in the community policy-making process.

The ruling on vertical integration between registries and registrars, where the community could not even approach consensus, appears to have originated with ICANN’s legal department, for example.

There has also been substantial concern about the extent of the power handed to hand-picked advisory panels created by CEO Fadi Chehade recently.

In that light, perhaps what ICANN needs is not oversight from some third party but rather stronger community accountability mechanisms that prevent capture and abuse.

That’s certainly my view today. But I don’t have any particularly strong feelings on these issues, and I’m open to have my mind changed during this week’s discussions in Singapore.

:)