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ROTD conducts first new gTLD auction as One.com wins .one

Kevin Murphy, February 25, 2014, Domain Sales

Danish registrar One.com has won the .one contention set in the first private auction carried out by new gTLD consultancy Right Of The Dot.

One.com beat Radix, the United Arab Emirates-based portfolio applicant, to the string. Radix withdrew its application last week. The price has not been disclosed.

ROTD, Mike Berkens and Monte Cahn-managed company, has been competing with Applicant Auction for contention set resolution services and this is its first win.

The .one auction was carried out using a “single sealed bid second price” methodology, in which all participants privately submit a single bid and the winner pays the second-highest losing bid.

In this case, One.com will have paid Radix whatever bid Radix had put forward, with ROTD and escrow partner Escrow.com taking their fees from the winning bid.

Applicant Auction uses an “ascending clock” method, where bids are set in increments by the auctioneer over the space of several rounds, with bidders choosing to stay in or drop out in each round.

Cahn said in a press release: “Our Single Sealed Bid Second Price auction method protects the participants from ‘auction fever,’ which often causes over-bidding as people get emotionally tied to the process of winning at any cost due to time committed and sometimes throw their budgets out the window.”

First eight gTLDs have 26,000 names so far

Kevin Murphy, February 6, 2014, Domain Registries

Well, we now have a new gTLD domain name market.

After n years of debate, policy-making, delay, application, testing, delegation and newfangled launch processes, there are eight new gTLDs that are open for business.

Donuts yesterday opened up its first seven gTLDs to their ‘proper’ general availability — by which I mean landrush pricing is no longer applicable.

At more or less the same time its second seven — .lighting, .equipment, .graphics, .photography, .camera, .estate, and .gallery exited their sunrise periods and went into their Early Access Program.

Meanwhile, dotShabaka Registry’s شبكة. (“.web” in Arabic) came out of its more opaque landrush period with several hundred new registrations.

Together, these 15 gTLDs have 26,199 registrations so far, based on the names active in their zone files today. The eight fully live gTLDs have 25,575, almost half of which belong to Donuts’ .guru.

TLDDomains
guru12,394
bike3,727
clothing2,856
singles2,071
ventures1,669
plumbing1,081
holdings963
شبكة. (.xn--ngbc5azd)814
equipment137
lighting137
estate85
photography73
graphics68
camera62
gallery62

The zone files are generated at about 0100 UTC and therefore do not represent the full first day of Donuts newly-GA gTLDs, but it’s clear that .guru is the domainer’s favorite so far.

The numbers are a long way off pretty much every new TLD launch we’ve seen to date.

Compare to .mobi, which had over 110,000 names at the end of its first week; .co, which sold 216,159 in its first 16 hours; or .xxx, which sold 55,367 names on day one.

Even Radix said it sold 4,000 .pw names in its first three hours and 50,000 in the first three weeks.

It should also be pointed out that none of the Donuts gTLD numbers include purchases of Domain Protected Marks List blocks, which do not show up in zone files.

That fact eliminates much of the noise from defensive registrations that we see in almost every other TLD.

For buyers (as opposed to blockers) market conditions are obviously different now too — a single TLD launching was once an event, the temporary alleviation of scarcity, whereas today Donuts alone expects to launch half a dozen every week for months.

And the Latin strings that have been launched so far don’t exactly capture the imagination, with .guru the possible exception.

Donuts’ portfolio, in my view, is based more on securing greenfield opportunities in vertical markets (plumbing, cameras, etc) rather than mining domain investors’ wallets on launch day.

One of the keys to the success of these things longer term is going to be how much use they get — when internet users start visiting new gTLD sites and seeing new gTLD URLs on billboards, momentum will build.

Directi joins Domain.com family in $100m deal

Kevin Murphy, January 29, 2014, Domain Registrars

Endurance International, the holding company behind brands such as Domain.com and HostGator has closed the acquisition of top ten registrar Directi and some related companies.

The acquisition, which was announced last September is worth between $100 million and $110 million — $25.5 million in cash and the rest in shares and a promissory note.

The deal includes Directi properties BigRock (a registrar), ResellerClub (the reseller-focused registrar), LogicBoxes (the registrar management service) and webhosting.info.

It does not include Radix Registry, the company that applied for 31 new gTLDs, 28 of which applications are still active.

Directi CEO Bhavin Turakhia “has agreed to be closely involved in the integration of the two companies”, but it doesn’t sound like he’s taking on a permanent role at Endurance.

Endurance may not be a familiar brand in and of itself, but its businesses include Bluehost, HostGator, Domain.com, FatCow, iPage and Mojo Marketplace.

Donuts officially richer than God after winning three new gTLD auctions

Kevin Murphy, December 19, 2013, Domain Registries

Donuts has a clear path to being awarded the .church, .life and .loans new gTLDs, following a private auction managed by Innovative Auctions this week.

Life Covenant Church and CompassRose.life have already withdrawn their applications for .church and .life respectively, and others are expected to follow soon.

Life Covenant Church, which does business at LifeChurch.tv, was described as the largest multi-site church in the US last year, with 46,000 regular attendees across 15 locations.

A lucrative business, no doubt. But apparently not lucrative enough to beat Donuts.

In the three-way contention set for .life, Donuts beat CompassRose.life, which seems to be affiliated with a Canadian housing developer and Xiamen 35.com Technology.

In .loans, which still faces Governmental Advisory Committee advice, Donuts beat fellow portfolio applicant Radix.

The losing applicants will all receive pay-offs from Donuts as a result of losing the auctions.

Innovative has now helped resolve 21 contention sets.

Applicants call for new gTLD objections appeals process

Kevin Murphy, November 6, 2013, Domain Policy

Twelve new gTLD applicants, representing many dozens of applications, have called on ICANN to create an appeals process for when Community Objections have debatable outcomes.

Writing to ICANN and the International Chamber of Commerce this week, the applicants focus on the recent decision in the .sport case, which they said proves that ICC panelists don’t fully understand the Community Objection policy as laid out in ICANN’s Applicant Guidebook.

The letter points to five “glaring errors” in the “fatally flawed” .sport decision, in which Olympics-backed applicant SportAccord prevailed over Famous Four Media’s competing application.

The signatories — which include Radix, United TLD, Donuts, Famous Four, TLDH and others — say that the ICC panelist simply assumed SportAccord represented the “sport” community and failed to pinpoint any “likelihood of material detriment” that would be caused by Famous Four’s .sport going ahead.

It seems to me that the latter arguments are much more well-founded.

While the letter tries to pick holes in the panelist’s finding that SportAccord represents enough of the “sport” community to be able to win the objection, the arguments are pretty tenuous.

The applicants use an definition of “community” found elsewhere in the Guidebook, for example, to attempt to show that the panelist failed to follow the guidelines for establishing a community in a Community Objection.

The panelist’s actual ruling uses the definition of “community” from the relevant part of the Guidebook and seems to follow it fairly closely. The applicants make a poor job of questioning his logic.

However, on “detriment”, the letter seems to be on much firmer ground.

It argues that the panelist deliberately lowered the bar from “likelihood of material detriment” to “possibility of material detriment” in order to hand SportAccord a victory.

The letter states:

If the Expert’s current logic is followed, every application, including the Objector’s own application, creates “possible” damage. In this case, an allegation of material detriment against any application would be upheld because there is future “possible” damage.

It also makes reference to the fact that the panelist appears to in many cases have been weighing the Famous Four application against SportAccord’s, which was not his job.

It reads in part: “The Expert did not identify a single objectionable or lacking aspect in the application that creates a likelihood of material detriment.”

The applicants call on ICANN to immediately create an appeals mechanism for Community Objections, and to ensure that ICC panelists are given training before making any more decisions.

Here’s the full list of signatories: Radix, United TLD, DotClub Domains, Top Level Design, Donuts, Top Level Domain Holdings, Priver Nivel, Fegistry, Employ Media, Famous Four Media, Merchant Law Group, DotStrategy.

TLDH raises $5 million from gTLD auctions

Kevin Murphy, October 25, 2013, Domain Registries

Top Level Domain Holdings made almost $5 million by losing auctions for the .lawyer and .website gTLDs this week, according to the company.

The London-listed company told the markets today that it has added £2.97 million ($4.81 million) to its coffers as a result of the auctions, in which Radix won .website and Donuts won .lawyer.

The number is net of the 4% cut taken by Innovative, which conducted the auctions, and the two $65,000 refunds TLDH will receive from ICANN when it withdraws the applications.

Some portion of the $4.8 million TLDH will have received from Donuts, where .lawyer was a two-horse race.

Radix’s winning bid for .website will have been split evenly between TLDH and Donuts.

At least one of these TLDs seems to have sold for significantly more than the average private auction selling price, which was $1.33 million after the first 14 Innovative auctions.

Innovative has managed auctions for 18 strings, but we don’t know the total price of the latest four.

The .website and .lawyer deals means TLDH now has £10.1 million ($16.3 million) in cash reserves, according to a company press release.

It still has 43 contested applications, however. On a $16 million budget — quite a lot less than some of its portfolio rivals — the company is going to have to make some smart tactical moves to maximize its gTLD portfolio.

“Our strategy remains to best monetise those applications where we see least value so that we can maximise our ability to acquire those names in which we see greatest value,” chairman Fred Krueger said in the press release.

It still has stakes in 25 uncontested gTLDs.

NOTE: An earlier version of this story contained inaccurate statements — failing to take into account that .website was a three-way contest — about the average selling price of new gTLDs at auction.

Donuts wins three new gTLD auctions

Kevin Murphy, October 24, 2013, Domain Registries

Donuts has added .lawyer, .fish and .discount to its portfolio of new gTLDs, having won private auctions against its competitors for the strings this week.

It beat Top Level Domain Holdings for .lawyer and WhatBox for .fish and .discount, according to a blog post from Innovative Auctions, which managed the auction.

The winning bids were, as usual, not disclosed. The losing bidders receive most of the cash the winning bidder was willing to pay.

The three auctions were part of a surprisingly small batch that included .website, where Radix beat TLDH yesterday. Innovative says it has settled 18 contention sets to date.

The gTLD strings .discount and .lawyer are still subject to Governmental Advisory Committee “Category 1” advice, meaning the GAC wants them to be regulated for consumer protection reasons.

Directi’s Radix wins .website gTLD auction

Kevin Murphy, October 23, 2013, Domain Registries

Directi-affiliated TLD registry Radix, has won the private auction for the .website gTLD, according to Radix.

The company beat rival portfolio applicants Donuts and Top Level Domain Holdings to the string, in an auction that was managed by Innovative Auctions, likely one of several going on this week.

There’s no outstanding Governmental Advisory Committee advice or objections to the Radix application, so its path to contracting and eventual delegation should be relatively uncontroversial now.

The price was undisclosed, Innovative’s standard terms.

Directi is in the process of being acquired by Endurance International, owner of Domain.com, which promised Radix up to $62 million to help with its gTLD auctions.

Domain.com owner files for $400m IPO, to spend $110m buying Directi

Kevin Murphy, September 10, 2013, Domain Registrars

Endurance International, owner of Domain.com and HostGator, plans to raise up to $400 million in a Nasdaq IPO, and said it will spend up to $110 million of that buying Directi, India’s largest domain registrar.

As part of the proposed acquisition, Endurance has also agreed to bankroll Directi’s new gTLD auctions to the tune of $62 million.

The acquisition is not final, and appears to depend on a number of targets related to the IPO and Directi’s revenue performance. Endurance’s S-1 filing with the US Securities and Exchange Commission reads:

In August 2013, we entered into a master share purchase agreement to acquire all of the outstanding capital stock of Directi from Directi Holdings, the seller, for an amount we estimate will be between $100 million and $110 million in cash or, at the election of the seller, a combination of cash and shares of our common stock, subject to the satisfaction or waiver of specified customary closing conditions and the achievement of specified financial targets.

The acquisition would close in the fourth quarter this year.

As well as running a top-ten registrar (and a few dozen others), Directi subsdiary Radix Registry has 29 active new gTLD applications, 26 of which are contested.

Endurance proposes to help Radix win these contention sets. On new gTLD auctions, the S-1 says:

in connection with our proposed acquisition of Directi, we entered into agreements with entities affiliated with Directi Holdings related to participation in the auction of new top level domain extensions and domain monetization activities, pursuant to which, among other things, we may be obligated to make aggregate cash payments of up to a maximum of approximately $62 million, subject to specified terms, conditions and operational contingencies.

Endurance is a complicated company. Its most familiar brands include Domain.com, iPage, FatCow, Homestead, Bluehost, HostGator, A Small Orange, iPower and Dotster.

But since December 2011 it has been controlled and majority owned by Warburg Pincus and Goldman Sachs, which paid a reported $975 million.

Its annual revenue for the last three calendar years has been $87.8 million, $190.3 million and $292.2 million. It’s currently not profitable, recording a net loss of $139.2 million in 2012.

It has seven million domains under management and had 3.4 million customers at the end of June 2013.

Judging by the S-1, the company has over a billion dollars of debt. Directi acquisition excluded, most of its IPO proceeds would go towards paying off some of that debt.

Six more LROs kicked out, most for “front-running”

Kevin Murphy, July 28, 2013, Domain Policy

Six more new gTLD Legal Rights Objections, six more rejected objections.

The World Intellectual Property Organization is chewing through its caseload of LROs at a regular pace now, made all the more easier by the fact that a body of precedent is being accumulated.

Objections rejected in decisions published last week cover the gTLDs .home, .song, .yellowpages, .gmbh and .cam.

All but one were thrown out, with slightly different panelist reasoning, because they had engaged in some measure of “front-running” — applying for a trademark just in order to protect a gTLD application.

Here’s a quick summary of each decision, starting with what looks to be the most interesting:

.yellowpages (hibu (UK) v. Telstra)

Last week somebody asked me on Twitter which LROs I thought might actually succeed. I replied:

Well, my initial hunch on .yellowpages was wrong, and I think I’m very likely to have been wrong about the other two also.

This case is interesting because it specifically addresses the issue of two matching trademarks happily living side-by-side in the trademark world but clashing horribly in the unique gTLD space.

The objector in this case, hibu, publishes the Yellow Pages phone book in the UK and has a big portfolio of trademarks and case law protecting its brand. If anyone has rights, it’s these guys.

But the “Yellow Pages” brand is used in several countries by several companies. In the US, there’s some case law suggesting that the term is now generic, but that’s not the case in the UK or Australia.

On the receiving end of the objection was the Australian telecoms firm Telstra, which is the publisher of the Aussie version of the Yellow Pages and, luckily for it, the only applicant for .yellowpages.

The British company argued that “no party should be entitled to register the Applied-for gTLD”, due to the potential for confusion between the same brand being owned by different companies in different countries.

The panel concluded that brands will clash in the new gTLD space, and that that’s okay:

It is inherent in the nature of the gTLD regime that those applicants who are granted gTLDs will have first-level power extending throughout the Internet and across jurisdictions. The prospect of coincidence of brand names and a likelihood of confusion exists.

The critical issue in this LRO proceeding is whether the Objector’s territorial rights in the term “YELLOW PAGES” (and the prospect of other non-objecting third parties’ territorial right) means that the applicant (or anyone else for that matter) should not be entitled to the Applied-for gTLD.

The panelist uses the eight-criteria test in the Applicant Guidebook to make his decision, but he chose to highlight two words:

the Panel finds that the Objector has failed to establish, as it alleges, that the potential use of the Applied-for gTLD by the applicant… unjustifiably impairs the distinctive character or the reputation of the objector’s mark… or creates an impermissible likelihood of confusion between the applied for gTLD and the Objector’s mark.

Because Telstra has rights to “Yellow Pages” too, and because it’s promising to respect trademark rights at the second level, the panelist concluded that its application should be allowed to proceed.

It’s the third instance of a clash between rights holders in the LRO process and the third time that the WIPO panelist has adopted a laissez faire approach to new gTLDs.

And as I’ve said twice before, if this type of decision becomes the norm — and I think it will — we’re likely to see many more defensive applications for brand names in future new gTLD rounds.

The LRO is not shaping up to be an alternative to applying for a gTLD as a means to defend a legitimate brand. Applying for a gTLD matching your trademark and then fighting through the application process may turn out to be the only way to make sure nobody else gets that gTLD.

.cam (AC Webconnecting Holding v. United TLD Holdco)

Both sides of this case are applicants for .cam. United TLD is a Demand Media subsidiary while AC Webconnecting is a Netherlands-based operator of several webcam-based porn sites.

Like so many other applicants, AC Webconnecting applied for its European trademark registration for “.cam” and a matching logo in December 2011, just before the ICANN application window opened.

The panelist decided that its trademark was acquired in a bona fide fashion, he also decided that the company had not had enough time to build up a “distinctive character” or “reputation” of its marks.

That meant the Demand Media application could not be said to take “unfair advantage” of the marks. The panelist wrote:

Given the relatively short existence of these trademarks, it is unlikely that either [trademark] has developed a reputation.

In the Panel’s opinion, replication of a trademark does not, of itself, amount to taking unfair advantage of the trademark – something more is required.

the Panel considers that this something more in the present context needs to be along the lines of an act that has a commercial effect on a trademark which is undertaken in bad faith – such as free riding on the goodwill of the trademark, for commercial benefit, in a manner that is contrary to honest commercial practices.

What we’re seeing here is another example of a trademark front-runner losing, and of a panelist indicating that applicants need some kind of bad faith in order to lose and LRO.

.home (Defender Security Company v. DotHome Inc.)

Kicked out for the same reasons as the other Defender objections to rival .home — it was a transparent gaming attempt based on a flimsy, recently acquired trademark. See here and here.

DotHome Inc is the subsidiary Directi/Radix is using to apply for .home.

The decision (pdf) goes into a bit more detail than the other .home decisions we’ve seen to date, including information about how much Defender paid to acquire its trademarks ($75,000) and how many domains its bogus Go Daddy reseller site has sold (three).

.home (Defender Security Company v. Baxter Pike)

Ditto. This time the applicant was a Donuts subsidiary.

.song (DotMusic Limited v. Amazon)

Like the failed .home objections, the .song objection was based on a trademark acquired tactically in late 2012 by Constantine Roussos, whose company, CGR E-Commerce, is applying for .music.

This objection failed (pdf) for the same reasons as the same company’s objection to Amazon’s .tunes application failed last week — a trademark for “.SONG” is simply too generic and descriptive to give DotMusic exclusive rights to the matching gTLD.

Roussos has also filed seven LROs against his competitors for .music, none of which have yet been decided.

.gmbh (TLDDOT GmbH v. InterNetWire Web-Development)

Both objector and respondent here are applicants for .gmbh, which indicates limited liability companies in German-speaking countries.

TLDDOT registered its European trademark in “.gmbh” a few years ago.

Despite the fact that it was obviously acquired purely in order to secure the matching gTLD, the panelist in this case ruled that it was bona fide.

Despite this, the panelist concluded that for InternetWire to operate .gmbh in the generic, dictionary-word sense outlined in its application would not infringe these trademark rights.