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Rightside moves into China too

Kevin Murphy, February 15, 2016, Domain Registries

Rightside has become the latest gTLD registry to open up in China.

The company said today it has created a Wholly Foreign-Owned Enterprise, basically a local subsidiary, in the country.

This is the same beachhead in China taken by Minds + Machines and Famous Four Media recently.

Draconian Chinese government regulations on domain registries and registrars require formal accreditation before domain names can be used by Chinese citizens.

Opening up a local office or working with a local proxy appear to be requirements to obtain this accreditation.

Rightside points out that 45% of new gTLD domain names — 5.4 million — are registered in China. Its own portfolio has seen 90,000 of these.

Two new gTLD registries open offices in China

Kevin Murphy, January 27, 2016, Domain Registries

Portfolio gTLD registries Famous Four Media and Minds + Machines have both announced that they’re formally entering the Chinese market.

Both companies are establishing “wholly foreign-owned enterprises” (WFOEs), a form of company that does not require local investment, on the mainland.

The moves are aimed at getting the registries’ respective gTLDs accredited by the Chinese government, something that is required before local registrants are allowed to use them.

In a press release, FFM senior legal counsel Oliver Smith said:

It was clear to us soon after launching our first domain registry that domain registrations from China comprised a strong proportion of the total. It was a natural progression of our strategy to build a physical presence in China. The accreditation process is complicated but well-structured and, thanks to the help of advice from the Chinese government, should be completed relatively quickly.

In some of Famous Four’s gTLDs, Chinese registrars are the overwhelming majority of the sales channel.

In .win, the registry’s biggest-seller, China was responsible for about 85% of registrations at the last count, for example.

Meanwhile, M+M is taking a slightly different route into the country.

It said today that while it also shortly plans to open a WFOE, it has also partnered with ZDNS, a local provider of proxy services for registries.

ZDNS was the company XYZ.com partnered with for its controversial launch into China. According to M+M, it’s also working with .CLUB Domains and some Chinese gTLD registries.

M+M is also using the specialist consultancy Allegravita for its marketing there.

Its local entity will be called Beijing Ming Zhi Mo Si Technology Company Limited (which may or may not translate to something like “Wise Mediation”).

M+M’s first Chinese launches will be .beer, .fashion, .fit, .law, .wedding, .work and .yoga, with .vip and .购物 (“.shopping”) coming later in the year.

.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.

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.

XYZ says it won’t block censored Chinese domains

Kevin Murphy, November 6, 2015, Domain Registries

New gTLD registry XYZ.com has said it will not preemptively censor domain names based on the wishes of the Chinese government.

Over the last couple of days, CEO Daniel Negari has sought to “clarify” its plans to block and suspend domain names based on Chinese government requests.

It follows XYZ’s Registry Services Evaluation Request for a gateway service in the country, first reported by DI and subsequently picked up by the Electronic Frontier Foundation, a Wall Street Journal columnist, Fortune magazine and others.

The clarifications offered up by XYZ probably did more to confuse matters.

A blog post on Wednesday said that XYZ will not reserve any .xyz domain names from being registered, except those ICANN makes all new gTLD registries reserve.

Subsequent comments from Negari stated that XYZ will, as the RSEP stated, prevent names that have been banned in China from being registered.

However, there’s one significant difference.

Now, the registry is saying that it will only put those bans in place for domain names that have been specifically banned by the Chinese government when the name had already been registered by a Chinese registrant.

So, if I understand correctly, it would not preemptively ban anyone anywhere from registering [banned term].xyz.

However, if [banned term].xyz was registered to a Chinese resident and the Chinese government told the registry to suspend it, it would be suspended and nobody would be able to re-register it anywhere in the world.

Negari said in a blog comment yesterday:

if we receive a Chinese legal order tomorrow (before the gateway has launched) which requires disabling a domain name registered in China and properly under Chinese jurisdiction, then it will be disabled at the registry level, and not by the gateway. When the gateway launches the name will continue to be unavailable, and the gateway will not implement the action on a localized basis only in China. The normal registry system would continue to be the only system used to resolve the name globally. Again — the specific stability concern ICANN had was that we would use the Chinese gateway to make .xyz names resolve differently, depending on what country you are in. I completely agree that our [RSEP] re-draft to address that concern came out in a way that can be read in a way that we sincerely did not intend.

So there is a list of preemptively banned .xyz, .college, .rent, .security and .protection domains, compiled by XYZ from individual Chinese government requests targeting names registered to Chinese registrants.

Negari said in an email to DI yesterday:

To clarify the statement “XYZ will reserve domains,” we meant that XYZ will takedown domains in order to comply with “applicable law.” Unfortunately, the inaccuracies in your post caused people to believe that we were allowing the Chinese government to control what names could be registered or how they could be used by people outside of China. The idea that XYZ is going to impose Chinese law and prevent people outside of China from registering certain domain names is simply incorrect and not true. To be 100% clear, there is no “banned list.”

That was the first time anyone connected with XYZ had complained about the October 12 post, other than since-deleted tweets that corrected the size of the list from 40,000 domains to 12,000.

The RSEP (pdf) that causes all this kerfuffle has not been amended. It still says:

XYZ will reserve names prohibited for registration by the Chinese government at the registry level internationally, so the Gateway itself will not need to be used to block the registration of of any names. Therefore, a registrant in China will be able to register the same domain names as anyone else in the world.

This fairly unambiguous statement is what XYZ says was “misinterpreted” by DI (and everyone else who read it).

However, it’s not just a couple of sentences taken out of context. The context also suggests preemptive banning of domains.

The very next sentence states:

When the Gateway is initially implemented we will not run into a problem whereby a Chinese registrant has already registered a name prohibited for registration by the Chinese government because Chinese registrars are already enforcing a prohibition on the registration of names that are in violation of Chinese law.

This states that Chinese residents are already being preemptively banned, by Chinese registrars, from registering domains deemed illegal in China.

The next few paragraphs of the RSEP deal with post-registration scenarios of domains being banned, clearly delineated from the paragraph dealing with pre-registration scenarios.

In his blog post, Negari said the RSEP “addressed the proactive abuse mitigation we will take to shut down phishing, pharming, malware, and other abuse in China”.

I can’t believe this is true. The consequence would be that if China sent XYZ a take-down notice about a malware or phishing site registered to a non-Chinese registrant, XYZ would simply ignore it.

Regardless, the takeaway today is that XYZ is now saying that it will not ban a domain before it has been registered, unless that domain has previously been registered by a Chinese resident and subsequently specifically banned by the Chinese government.

The registry says this is no different to how it would treat take-down notices issued by, for example, a US court. It’s part of its contractual obligation to abide by “applicable law”, it says.

Whether this is a policy U-turn or a case of an erroneous RSEP being submitted… frankly I don’t want to get into that debate.

Disclosure: during the course of researching this story, I registered .xyz domains matching (as far as this monoglot can tell) the Chinese words for “democracy”, “human rights”, “porn” and possibly “Tiananmen Square”. I have no idea if they have value and have no plans to develop them into web sites.