Battle for .web “far from over”, says Afilias lawyer

Altanovo Domains’ fight with Verisign and ICANN for the .web gTLD is not over, despite an adverse ruling late last month, according to a top lawyer for the company.

Altanovo, the company previously known as Afilias Domains No 3, has not thrown in the towel and left the path clear for Verisign to launch .web, Arif Ali of the law firm Dechert told DI last night.

“Bottom line: this matter is far from over and no, Verisign doesn’t ‘get to run .web after all;’ certainly if the Board does its job objectively and fairly,” he said in an email.

He said this just hours before ICANN published its latest, but by no means final, board resolution on the .web case.

Ali represented Afilias in its Independent Review Process complaint against ICANN’s decision to award .web to Verisign following a 2016 auction, which was won by a company called Nu Dot Co, secretly backed by $135 million of Verisign’s money.

Afilias technically won its IRP, with the panel ruling last May that ICANN broke its bylaws by shirking its duty to address Afilias’ claim that NDC broke new gTLD program rules. Afilias said ICANN should have forced NDC to disclose itself a Verisign pawn before the auction went ahead.

ICANN got close to signing a registry agreement for .web with NDC, despite it being an open question as to whether the auction was legit, the panel ruled. It ordered ICANN to pay Afilias its $450,000 in legal fees and $479,458 of IRP costs.

What the IRP did not do was void the Verisign/NDC bid, nor give Afilias rights to .web.

Instead, it instructed ICANN to stay the .web contract-signing until its board has formally “considered and pronounced upon the question of whether the [Verisign-NDC Domain Acquisition Agreement] complied with the New gTLD Program Rules”.

The board had held a secret, undocumented discussion about the case in November 2016 and decided to keep its mouth shut and just let the IRP play out, according to the IRP ruling, which essentially told the board to stop avoiding difficult questions and to actually make a call on the legitimacy of the Verisign play.

Before the board could do so, Afilias/Altanovo filed an unprecedented appeal with the IRP panel. Technically an “application for an additional decision and interpretation”, Afilias asked the IRP panel to definitively answer the question of whether Verisign broke the rules rather than merely passing the hot potato back to ICANN’s board.

But in a December 21 decision (pdf), the IRP panel denied Afilias’ request as “frivolous” in its entirely, writing:

The Panel has dismissed the [Afilias] Application in its entirety. In the opinion of the Panel, under the guise of seeking an additional decision, the Application is seeking reconsideration of core elements of the Final Decision. Likewise, under the guise of seeking interpretation, the Application is requesting additional declarations and advisory opinions on a number of questions, some of which had not been discussed in the proceedings leading to the Final Decision.

In such circumstances, the Panel cannot escape the conclusion that the Application is “frivolous” in the sense of it “having no sound basis (as in fact or law)”. This finding suffices to entitle the Respondent [ICANN] to the cost shifting decision it is seeking and obviates the necessity of determining whether the Application is also “abusive”.

The panel told Afilias to pay ICANN’s $236,884 legal fees and the panel’s costs of $140,335, leaving Afilias out of pocket and back to square one in terms of getting clarity on whether Verisign’s actions were kosher.

Afilias had basically accused the panel of shirking its duties and punting its decision on Verisign’s auction bid in much the same way as the panel decided that ICANN had shirked its duties and punted its decision on Verisign’s auction bid.

Nobody seems to want to make a call on whether the successful Verisign-NDC ploy to win the .web auction with a secretly bankrolled bid was legit.

On Sunday, the full ICANN board met to discuss the outcome of the IRP and — surprise surprise — it punted again, instructing a subcommittee to look more closely at the matter:

the Board asks the Board Accountability Mechanisms Committee (BAMC) to review, consider, and evaluate the IRP Panel’s Final Declaration and recommendation, and to provide the Board with its findings to consider and act upon before the organization takes any further action toward the processing of the .WEB application(s).

There’s not yet a publicly announced date for the next BAMC meeting. It tends to meet as and when needed, so we might not have too long to wait.

Once the committee has made a decision, it would be referred back to the full board for a final rubber stamp, and it seems that only after that would Afilias make its next move.

Ali, in an email sent to DI just a few hours before ICANN published its Sunday board resolution last night, said:

The [IRP] Panel also made it clear that the Board can’t just punt on the matter as it did previously, but must decide it, and that its decision is subject to review by a future IRP panel.

There’s nothing preventing Afilias filing another IRP to challenge the board’s ultimate decision, should it favor Verisign. Likewise, if it favors Afilias, Verisign could use IRP to appeal.

Verisign has been pursuing a counter-claim against Afilias, albeit so far only in the court of public opinion, accusing the company of breaking ICANN’s rules by trying to secretly “rig” the .web auction during a communications blackout period.

Ali calls this a “red herring”, among other things.

In my view, whichever way ICANN’s board goes, it’s going to wind up back in an IRP.

With IRP proceedings typically measured in years, and no indication that Afilias or Verisign are ready to back down, it seems the .web saga may still have some considerable time left on the clock.

If you’re desperate to register a .web domain, don’t hold your breath.

Note: most of Afilias was acquired by Donuts a year ago, but the .web application was not part of the deal. The IRP proceedings have continued to refer to “Afilias” interchangeably with “Altanovo”, and I’m doing the same in my coverage.

First UNR gTLD buyer outs itself

A company from outside the domain industry with no revenue last year and doubts about its survival has announced itself as the buyer of one of UNR’s gTLDs, which were sold off earlier this year.

Digital Asset Monetary Network Inc issued a press release stating that it has “acquired a TLD”. It didn’t name the TLD, or the seller, but gave enough information for us to narrow it down to UNR:

The gTLD acquired by DigitalAMN was originally slated to be part of an auction recently conducted by a large retail registry and was mistakenly listed with the registry’s available inventory for auction. However, the Company and its domain industry partners were able to secure this digital asset completely outside of that auction.

UNR had listed these 23 gTLDs for sale at the April 28 auction: .audio, .blackfriday, .christmas, .click, .country, .diet, .flowers, .game, guitars, .help, .hiphop, .hiv, .hosting, .juegos, .link, .llp, .lol, .mom, .photo, .pics, .property, .sexy and .tattoo.

It’s not clear which of these was “mistakenly listed” and bought separately by DigitalAMN. When UNR announced the closure of the auction, it only said that it had sold “20+” of the names in its portfolio, though the company later confirmed to DI that all 23 had been sold.

The identities of the buyers, which may number as many as 17, have not yet been revealed. All 23 contracts appear to be still subject to ICANN’s regulatory scrutiny, even six months after the auction.

In a press release today, DigitalAMN CEO Ajene Watson said:

We believe this venture continues to support our ethos and mantra. Especially given the name of this gTLD, what it may represent culturally to a multi-billion-dollar global marketplace, and the anticipated financial literacy initiatives that could potentially be born from it.

Which strings does “financial literacy initiatives” suggest? .llp? .property? Your guess is as good as mine.

The press release states that DigitalAMN has two domain industry partners in its new venture. Again, they’re not named, but we can probably assume one’s a back-end registry provider.

DigitalAMN is listed on the over-the-counter markets in the US. It reported $145,000 of consulting revenue in the six months to June 30, but was burning cash and said it needed another $2 million to survive the next 12 months.

It calls itself a Public Accelerator Incubator (PAI) company, which appears to be a term of its own invention. It says it “operates an ecosystem that fosters growth opportunities for entrepreneurs looking to build their businesses”.

This seems to mean it tries to get start-ups investment through means such as crowdfunding and access to capital markets through “mini-IPOs” made possible through the US JOBS Act of 2012.

The company is possibly one of the “blockchain companies” that UNR referred to when it announced the auction results back in May.

DigitalAMN says it intends to introduce “new value-added services, leveraging the newest technologies incorporated in digital wallets and crypto currencies” to its new gTLD.

It’s going to be interesting to see what the company has in mind.

UPDATE: this article was updated November 5, 2021, to remove an inaccurate reference to the company’s Bitcoin position.

Afilias appeals .web ruling, Verisign responds with “rigging” claims

Afilias has filed an unusual and unprecedented appeal against the May ruling that found ICANN broke its bylaws by awarding the .web gTLD to a Verisign affiliate.

The company is arguing that the Independent Review Process panel that decided the .web case shirked its duties, by not actually resolving the major disputes placed before it.

Verisign, in response, has accused Afilias of asking for a “do-over”, which it said is against the rules, and published information it said showed the company had tried to “rig” the .web auction.

The IRP followed the 2015 ICANN last-resort auction, which saw Verisign secretly fund a shell applicant called Nu Dot Co to win with a $135 million bid, on the basis .web would later be transferred to its custody.

Afilias was the runner-up, and argued that ICANN should have voided the NDC bid because Verisign’s involvement was not disclosed.

But the IRP panel merely found that ICANN had breached its bylaws by failing to have the courage to actually rule on the legitimacy of Verisign’s tactics, and threw it back to ICANN to make a decision.

ICANN has yet to make that decision. Instead, Afilias has filed an appeal (pdf) with the in the form of an “application for an additional decision and interpretation”.

IRP cases are handled by the International Center for Dispute Resolution, and Afilias is invoking the ICDR Arbitration Rules that allow a claimant to request an “interpretation” or “additional award” from the original decision:

By failing to resolve all of the claims and issues Afilias presented to the Panel for decision, the Panel has not only failed to satisfy its mandate; it has also undermined the very Purposes of the IRP (as set out in Section 4.3(a) of the Bylaws)—especially, but not exclusively, by its decision to refer Afilias# claim arising from Nu Dot Co’s (“NDC”) violation of the New gTLD Program Rules back to the ICANN Board and Staff to “pronounce” upon “in the first instance.”

The lengthy request is, I believe, an unprecedented attempt at an appeal of an IRP ruling. It’s also heavy on the legal arguments and does not really shed much light on the facts of the case.

The gist of it is that Afilias wants the panel to rule that ICANN breached its bylaws, new gTLD program rules and international law by failing to disqualify NDC and awarding .web to Afilias instead.

Verisign, in response, said in a blog post that Afilas’ application is “not permitted by the arbitration rules – which expressly prohibit such requests for ‘do overs.'”

It also published a letter (pdf) from NDC to ICANN in which it argues that Afilias tried to engage in a “collusive scheme” to “rig” the .web auction.

The letter contains many pages of private correspondence — emails and phone text messages — in which rival .web applicants, before Verisign’s involvement had been confirmed, fruitlessly attempted to persuade NDC to join them in a private auction in which the winning bid would have been shared among the losers rather than all going to ICANN.

While this kind of private settlement was envisaged, and indeed encouraged, by new gTLD program rules, Verisign reckons its smoking gun is messages sent by Afilias during the so-called “blackout period” before the last-resort auction, during which communications between applicants were forbidden.

As far as I can tell, all or almost all of the documents provided by NDC to ICANN had already been submitted to the public record during the IRP.

Note — the “Afilias” referred to throughout this post is the portion of the company, now known as Altanovo Domains, left behind after most of its operating businesses were acquired by Donuts late last year.

Afilias hints at more legal action over .web

As Verisign does everything but declare outright victory in last week’s Independent Review Process result, .web rival Afilias is now strongly hinting that its lawyers are not quite ready to retire.

John Kane, VP of Afilias (now Altanovo) said in a statement that Afilias is prepared to “take all actions necessary to protect our rights in this matter”.

This matter is of course the contested 2015 auction for the new gTLD .web, which was won by Nu Dot Co with $135 million of Verisign’s money.

Afilias thinks the winning bid should be voided because Verisign’s involvement had been kept a secret. The IRP panel stopped short of doing that, instead forcing ICANN’s board of directors to make a decision.

The earliest they’re likely to do this is at ICANN 71 later this month.

But with one IRP down, Afilias is now reminding ICANN that the board’s ultimate decision will also be “subject to review by an IRP Panel.”

So if ICANN decides to award .web to Verisign, Afilias could challenge it with another IRP, adding another two years to the go-live runway and another couple million dollars to the lawyers’ petty cash jar.

None of which should overly bother Verisign, of course, if one subscribes to the notion that its interest in .web is not in owning it but rather in preventing its competitors from owning it and aggressively marketing it against .com.

But Verisign also put out a statement reviewing the IRP panel’s decision last week, reiterating that it believes Afilias should be banned from the .web contest and banned from making any further complaints about Verisign’s bid.

While Afilias spent its press release focusing on trashing ICANN, Verisign instead focused its blog post on trashing Afilias.

According to Verisign, Afilias is no longer competent to run a registry (having sold those assets to Donuts) and is just looking for a payday by losing a private auction.

“Afilias no longer operates a registry business, and has neither the platform, organization, nor necessary consents from ICANN, to support one,” Verisign claims.

Afilias could of course outsource its would-be .web registry, as is fairly standard industry practice, either to Donuts or any other back-end operator.

Verisign hopeful after decision reached in .web gTLD case

The fate of .web has been decided, over 20 years after it was first applied for, and Verisign thinks it might emerge triumphant.

The company said last night that the ICANN Independent Review Panel handling the case of Afilias v ICANN reached a decision May 20 and delivered it to Verisign the following day.

Verisign says the panel “dismissed Afilias’ claims for relief seeking to invalidate the .web auction and to award the .web TLD to Afilias, concluding that such issues were beyond its jurisdiction.”

Sounds good for Verisign so far. Afilias wanted its $135 million bid for .web, submitted via an intermediary called Nu Dot Co, thrown out due to claims that ICANN violated its own bylaws by not sufficiently vetting the bidder.

But Verisign goes on to say “the panel’s ruling recommends that ICANN’s Board of Directors consider the objections made about the .web auction and then make a decision on the delegation of .web”.

It adds that the panel found that ICANN violated its fairness and transparency commitments:

With respect to ICANN, the ruling finds that certain actions and/or inaction by ICANN in response to Afilias’ objections violated aspects of ICANN’s bylaws related to transparency and fairness. These findings are particular to ICANN’s actions and not conduct by Verisign. Verisign anticipates that ICANN’s Board will review the panel’s ruling and proceed consistent with the panel’s recommendation to consider the objections and make a decision on the delegation of .web.

Based on Verisign’s statements, it seems that ICANN lost, but Afilias didn’t win.

The revelation was buried in a Securities and Exchange Commission filing on an unrelated financial matter last night. Hat tip to @jintlaw for spotting and tweeting about it.

It’s the most eagerly anticipated IRP ruling since 2011’s .xxx case, but in stark contrast to Rod “let’s draft this tweet” Beckstrom-era ICANN, where the decision was posted in a matter of hours, the 2021 org has not yet posted the panel’s findings or made a public statement acknowledging the ruling.

Verisign says it intends to “vigorously pursue” .web, but “can provide no assurance” as to which way the ICANN board of directors will swing.

ICANN to auction off first failed new gTLD

ICANN is planning to auction off .wed, the first new gTLD from the 2012 application round to fail.

The TLD has been running on Nominet’s Emergency Back-End Registry Operator platform since late 2017, when former registry Atgron suffered a critical failure — apparently planned — of its registry services.

After some lawyering, Atgron finally lost its registry contract last October.

Now, ICANN has confirmed that .wed will be the subject of an open Request For Proposals, to find a successor registry operator.

It’s the first time it’s had to roll out its Registry Transition Process mechanism. All previous gTLD terminations were single-registrant dot-brands that were simply quietly removed from the DNS root.

The RFP will basically amount to an auction. Registries will have to pass the usual technical and financial background checks, but ultimately the winner will be selected based on how much they’re willing to pay.

In ICANNese: “The RFP process will identify the highest economic proposal and utilize it as the deciding factor to proceed to evaluation.”

But the money will not stuff ICANN’s overflowing coffers. After it’s covered the costs of running the RFP, any remaining cash will go to Atgron. There’s a non-zero chance the company could make more money by failing than it ever did selling domain names.

It currently has 39 domains under management, the same 39 it’s had since Nominet took over as EBERO, and the successor registry will be expected to grandfather these names. Only 32 of the names appear to be genuine end-user registrations.

Atgron’s business model, which was almost antithetical to the entire business model for domain names, is to blame for its failure.

The company tried to sell domains to marrying couples for $50 a year, on the understanding that the renewal fee after the first two years would be $30,000.

Atgron wanted to actively discourage renewals, in order to free up space for other couples with the same names.

Unsurprisingly, registrars didn’t dig that business model, and only one signed up.

Fortunately, whichever registry takes over from Atgron will be under no obligation to also take over its business model.

ICANN said it expects to publish its RFP “in the coming months” and pick a winner before the end of the year.

$40 million UNR auction brings fresh blood to domain industry

Six entities are entering the domain registry business for the first time following UNR’s auction last month, which saw over 20 new gTLDs sold off for a total of over $40 million, according to UNR.

While playing its cards close to its chest and revealing the auction results in rather general terms, UNR disclosed last week that there were 17 bidders at the three-day event, which ran in late April.

It said “between 10 and 20 bidders came away as winners”, which I assume we have to interpret as “between 10 and 17”.

Anyone predicting a bulk purchase by a rival portfolio registry was dead wrong, it appears.

UNR said that, while it will not disclose their identities, “established registries, investment firms, blockchain companies, and high net-worth individuals” were among the winners.

None of the ICANN Registry Agreements have yet changed hands, according to ICANN records.

While existing registries and investment firms (presumably the kind of private equity interests that have shown high levels of interest in the domain industry in recent years) will come as no surprise as buyers, blockchain companies and high net-worth individuals will perhaps raise more eyebrows.

ICANN won’t, to the best of my knowledge, sign an RA with an individual, so we’ll no doubt be seeing a corporate vehicle or two established to take over contracts on behalf of those buyers.

The idea of a blockchain company taking over a TLD in the internet’s official root zone is particularly interesting.

The closest we’ve had to that scenario to date is MMX’s experiments integrating .luxe into the Ethereum blockchain, which has been described as genuinely innovative.

But most forays by blockchain outfits into “domain names” have been strictly alt-root moves, such as Unstoppable Domains’ use of .crypto addresses, which do not use the ICANN root and instead require browser plug-ins to function.

These kinds of services usually have their ability to avoid centralized oversight and control as a USP, which makes an attempt from this sector to suck on the ICANN teat especially intriguing.

And which of UNR’s TLDs would be most suited to blockchain applications? .link? .click? .lol?

UNR has not broken down how much was paid for each TLD, and we’ll likely never know, but the $40 million top-line is far above the $11.65 million minimum opening bids it had established for the no-reserve auction.

But it still works out as under $2 million on average across each of the 23 gTLDs on offer, many of which had been on the market for six or seven years, begging the question of whether UNR CEO Frank Schilling’s big bet on new gTLDs back in 2012 was ultimately a success.

Schilling said in a press release: “All UNR shareholders should be exceptionally pleased with the final outcome of this first-of-its-kind event. We are deeply satisfied to have seen so much new interest and blood enter the arena.”

The TLDs auctioned were: .audio, .blackfriday, .christmas, .click, .country, .diet, .flowers, .game, ,guitars, .help, .hiphop, .hiv, .hosting, .juegos, .link, .llp, .lol, .mom, .photo, .pics, .property, .sexy and .tattoo.

DI will of course reveal the winners over time as their ICANN contracts are updated to reflect the new operators.

UNR cuts $5.2 million from price of new gTLD portfolio

UNR has reduced the opening bids on almost all of the gTLDs it plans to auction off later in the week, to the tune of a whopping $5.2 million.

According to the minimum opening bids listed on the auction web site today, the job lot of 23 TLD contracts could go for as little as $11.65 million, if there’s no competitive bidding whatsoever.

That’s compared to the $16.87 million total when the TLDs were first announced for auction back in January.

It’s a no-reserve auction of UNR’s entire portfolio of gTLDs that runs from Wednesday to Friday this week.

Some gTLDs, such as .hiv and .juegos, have no minimum bids.

The only TLD to receive a price increase since January is .llp, which had a $0 listing back then but is now listed at $200,000. There’s been no change in .llp’s fortunes since then — it’s still unlaunched.

The music-themed .country, which had no list price in January, now has a $300,000 tag.

The biggest discount comes on .link, once listed with a $3 million opener, now reduced to $2 million.

Nine of the gTLDs are now priced at below the original ICANN application fee of $186,000.

Here’s a table comparing the January minimum bid to today’s pricing.

[table id=66 /]

UNR, which sold off its registrar and secondary market businesses to GoDaddy and its stakes in three car-themed gTLDs to XYZ.com last year, plans to remodel itself as a back-end operator post-auction.

UPDATE: According to UNR, the January prices were preliminary and published accidentally, and no changes have been made since late January or early February.

Decision on $135 million .web auction expected in weeks

ICANN, Verisign, Donuts, and the other applicants for .web will find out who gets to control the fiercely contested gTLD by the first week of June at the latest, according to Verisign’s CEO.

Jim Bidzos told analysts tonight that the Independent Review Process panel currently handling a complaint filed by Afilias declared its case closed April 7, and said that a decision will come within 60 days.

Afilias, now owned by Donuts, came second in an ICANN “auction of last resort” in which a Verisign-backed company called Nu Dot Co agreed to pay $135 million for the coveted string.

Afilias wants the auction declared invalid because ICANN, it claims, did not sufficiently pursue allegations that NDC was being secretly bankrolled by Verisign, which it says broke ICANN bylaws and new gTLD application rules.

This is denied by ICANN, as well as NDC and Verisign, which have filed legal documents with the IRP panel despite not being parties.

Afilias and others suspect that Verisign wants .web in order to bury it, keeping what could be a strong .com competitor weak, which Verisign also denies.

The IRP panel held a seven-day virtual hearing last August, but has continued to receive briefs from ICANN and Afilias since then.

Verisign says it needs .web because .com is running out of names

Verisign’s affinity for cognitive dissonance has emerged yet again — it’s now claiming that it needs to be awarded the .web gTLD because it’s running out of .com domains to sell.

In legal documents released by ICANN yesterday, Verisign’s lawyers say: “The undisputed evidence is that Verisign needs a TLD like .WEB for growth given the decreased name availability in .COM”.

The admission/claim/lie (delete according to preference) came in a joint post-hearing filing by Verisign and Nu Dot Co, the .web applicant to which Verisign loaned $135 million to bid for the gTLD on its behalf at a record-breaking ICANN auction in 2016.

Afilias, now owned by Donuts, was the second-highest bidder and since November 2018 has been trying to get the auction result cancelled via ICANN’s quasi-judicial Independent Review Process.

The IRP’s final hearing was held over seven days last June, and we’ve been waiting with baited breath for a ruling ever since.

At some point over the last 48 hours, ICANN published three sets of post-hearing arguments — one from itself, one from complainant Afilias and an amicus (non-party, friend of the court) filing from Verisign/NDC.

The Verisign filing (pdf) attempts to rubbish Afilias’ claims across the board, but its rebuttal of the argument that it only wants .web in order to bury it and protect .com’s dominance is particularly interesting:

Verisign Has Every Incentive To Grow .WEB Aggressively. Afilias’ Amended IRP Request asserts without evidence that Verisign seeks to acquire .WEB in order to eliminate a potential competitor for .COM and that Afilias would make a better operator of .WEB. Afilias presented no evidence to support this claim prior to the IRP, and none was presented at the hearing. In fact, the evidence before this Panel refutes Afilias’ claims. The undisputed evidence is that Verisign needs a TLD like .WEB for growth given the decreased name availability in .COM. Even Afilias’ own experts concede that the .COM TLD now has limited name availability. Moreover, the undisputed evidence establishes that Verisign is well-positioned to maximize .WEB’s potential, while Afilias’ recent track record suggests that it would be a less effective operator of .WEB.

In June last year, Verisign had submitted to the IRP panel:

Verisign needs a new TLD like .WEB for growth. Verisign’s growth rate has declined in recent years, largely due to many names in .COM already having been taken and increased competition from new gTLDs and ccTLDs that have superior name availability.

Even Afilias’ own experts concede that the .COM name space effectively is taken. Numerous other industry participants have noted that most of the “good” names in .COM already are taken.

While Verisign had a applied for a few non-English transliterations of .com in the 2012 new gTLD application round, it had avoided getting involved with potential competitors to .com.

But, according to its brief, in 2014 it had just sold off the remainder of its non-domain businesses and, realizing its growth now needed to come from a pure domains strategy, tasked VP Paul Livesay with figuring out how it could worm its way back into the new gTLD program.

Many of the details of Livesay’s research and decision making have been redacted by ICANN (purportedly at Verisign’s request), but it seems he came to the conclusion that the best way to benefit from the program long after the application window closed would be to secretly financially back NDC’s participation in the .web auction, with the provision that the .web contract would be transferred to Verisign should it win.

Quite apart from its regular postings touting .com availability over the last few years, the same year that Verisign was coming to the conclusion that .com was becoming saturated and it needed new growth opportunities in other TLDs, it sued XYZ.com for false advertising for having the gall to suggest that it was hard to find available .com domains. It lost.

Because Verisign apparently enjoys nothing more than holding two diametrically opposed positions simultaneously, its October amicus filing also claims that .web isn’t nearly as awesome as Afilias and others claim.

On the same page that it insists that .web is needed to drive growth, Verisign poo-poos the notion that .web could be a significant competitor to .com, relying on an “expert report” commissioned by Verisign and compiled by University of Chicago economist Kevin Murphy.

(Murphy’s report is redacted in its entirety (pdf) by ICANN, but his 1,119 pages of unredacted exhibits (pdf) prominently include screenshots from this blog, so I feel the need to point out that he’s a different Kevin Murphy — he’s not me, and I’d never even heard of the dude until this morning. On a personal level, the fact that I’m apparently not even the best Kevin Murphy when it comes to the .web story that I’ve been covering for the last two decades is, as you might imagine, as depressing to me as it is presumably amusing to you.)

While his report is redacted, reading around the edges it appears that Murphy reckons .web will not be an exceptional competitor to .com.

Verisign’s October filing states:

.WEB’s Valuation Shows It is Not Particularly Competitively Significant. The Murphy Report models multiple economic scenarios to assess Afilias’ claim that the $135 million price paid for .WEB at the public auction shows that .WEB will be a substantial competitor. None of these scenarios indicate that .WEB is likely to gain a significant market share. Instead, each scenario shows that .WEB is likely to have no more than a 2–3% market share.

Because of the redactions, it’s not clear what market Murphy was referring to, but a 3% market share of the current universe of domain names across all TLDs works out to over 10 million domains. In other words, .web could be a top-five gTLD, up alongside the likes of .org.

But elsewhere in its IRP filings, Verisign cites Murphy to support its argument that .web will have “registrations in the low single digit millions”. That would still be enough to make it one of the best-selling new gTLDs.

This relatively low expected turnout of course begs the question of why Verisign needs .web to grow. It added 4 million net new names across .com and .net last year alone, with .net pretty static, according to its financial filings.

I’m no Kevin Murphy, but here’s a table I’ve thrown together showing Verisign’s domain growth over the last decade.

[table id=64 /]

Its revenue has consistently grown year over year, from $681 million in 2010 to $1.27 billion in 2020. It’s considered one of the most profitable companies in the world, and its share price has tripled since 2011.

And that was without .web.