Demand Media: ignore our Republican gTLD rivals

Demand Media has asked ICANN to “ignore” complaints from the US Republican party about its application for the .republican gTLD.
Last month, the Republican National Committee and the Republican State Leadership Committee submitted comments to ICANN arguing that Demand would be an unsuitable custodian for the gTLD.
Demand is best known for its “unofficial, mediocre and sometimes incorrect” content farms, such as eHow, the letter (pdf) said.
The company should not be allowed to run .republican because it implies endorsement by the Republican party, or some kind of community backing for a non-Community application, the letter said.
This week, Demand has responded, saying it’s nothing but competitive posturing, given that the RSLC has applied for .gop (for “Grand Old Party”, a nickname for the Republicans):
A letter to ICANN from Demand subsidiary and .republican applicant United TLD Holdco, says:

Because the RSLC and RNC have applied for .GOP, an arguably competing string, it is easy to see through these arguments and ignore them as nothing more than an attempt to undermine the credibility of United TLD in order to gain a competitive advantage.
…
By their own admission, RSCL and RNC agree that “.REPUBLICAN has the potential to be a very powerful gTLD.” It is natural then, that they would attempt to discredit United TLD in the hope of eliminating competition for their own string.

The thrust of Demand’s rebuttal is that Republicanism is not an exclusively American movement — other parties around the world use the name — and that it also has generic meaning.
It further argues that the quality of the content Demand provides elsewhere is irrelevant, because the company plans to sell .republican domain names, not produce content there.
Demand has also applied for .democrat, the other major US political party, but did not receive any complaints from the Democratic party during the designated ICANN comment period.

DotGreen lobbies the GAC for support in .green fight

The DotGreen Community has asked ICANN’s Governmental Advisory Committee for backing in the four-way fight for the .green generic top-level domain.
In a letter to the GAC, copied to ICANN’s board and published today, DotGreen does everything but ask outright for the GAC to object to its three competitors’ .green applications.
In it, Annalisa Roger, CEO of the not-for-profit company, makes a passionate case that .green should be operated by a company that has a genuine connection to and affinity with the environmental movement.
She heavily implies that the GAC should object to the other applicants.

Without deliberate decision or intervention, the .green TLD may be won at ICANN Auction to join enmass with a slew of portfolio TLDs, blending into one of the many industry portfolios, a common business model ICANN’s new gTLD program has spawned.
…
Those like you who are in a position to object, evaluate, or delegate should consider the obvious relationship of .GREEN with the Green Community, and the global Green Movement which represents net social benefits to include all people, their natural and synthetic environments, the economic systems they construct (such as Green Business Models), and conditions for future generations of life who stand to be affected by the choices we make, the policies we implement, and the projects we fund and allow to be born today.

The other .green applicants are Top Level Domain Holdings, Afilias, and a Demand Media subsidiary. Unlike DotGreen, they’re all portfolio gTLD applicants.
Roger says these companies are basically out to sell as many domains as possible and don’t have the same commitment to the environmental movement as DotGreen.
Despite the name and a great deal of support from green organizations, DotGreen did not file a “community” application, so the only way it can avoid auction is by persuading the other applicants to drop their bids, or by having them all eliminated by objections.
Asking the GAC to object is probably the cheapest way to do this.
While the GAC has made its interest in gTLDs with obvious regulatory implications — such as .bank — abundantly clear, I understand conversations have also started about strings with more tangential relationships to public policy, such as .food.
It’s not inconceivable that .green could fall into that category, though I don’t think it’s an easy sell.

Donuts dismisses “meritless” cybersquatting claims

Donuts, the company applying to ICANN for more new gTLDs than any other, has responded to claims that it should be banned from the new gTLD program on cybersquatting grounds.
As reported earlier today, a mysterious demand has emerged for Donuts and its registry back-end, Demand Media, to be banned from running new gTLDs due to Demand’s history of losing cybersquatting cases.
A letter sent to ICANN’s top brass by a Boston law firm claims that Donuts is little more than a front organization for Demand, and should fail ICANN’s background checks accordingly.
But in a statement provided to DI this evening, Donuts said:

The letter — generated by a law firm representing an anonymous client — is rife with factual inaccuracies and meritless allegations. Demand Media is a commercial partner and is neither an investor in nor part of a joint venture with Donuts. We look forward to engaging in the ICANN review process and its thorough background checks, and are confident that we meet all requirements to operate a Top Level Domain registry.

We’re yet to hear from Demand or to receive clarification from McCarter & English, the law firm responsible for the original letter.

Lawyer tries to nuke Donuts and Demand Media’s gTLD bids

A lawyer has called for new gTLD uber-applicants Demand Media and Donuts to be banned from running gTLD registries due to Demand’s history of cybersquatting.
Jeffrey Stoler of Boston law firm McCarter & English has written to ICANN’s leadership, along with the chair of the Governmental Advisory Committee, to allege that Demand Media, Donuts and their key executives:

are, by ICANN’s established eligibility guidelines, unsuited and ineligible to participate in the new gTLD program.

It goes on to state that:

ICANN can and should reject the applications from Donuts and its subsidiaries, Demand Media and its subsidiaries, and their respective affiliated companies.

The two companies have, combined, applied for 333 new gTLDs. Donuts, which was founded by former Demand executives, also plans to use Demand as its back-end registry provider.
Demand Media subsidiaries, however, have a rotten record of losing cybersquatting cases filed under the UDRP, as Stoler’s generally well-researched 24-page letter spells out in some detail.
This, Stoler argues, should cause both companies to fail ICANN’s background checks, which are specified in the Applicant Guidebook.
Companies that have “been involved in a pattern of adverse, final decisions” under the UDRP, defined as more than three losses in the last four years, are supposed to fail the background check.
Demand Media seems to fit that definition, and then some, assuming you include UDRP losses incurred by its subsidiaries.
Donuts, as a brand new company, does not have the same track record, but Stoler reckons there is “strong evidence that Donuts is merely an alter ego of, and working in concert with, Demand Media”.
The letter states:

In June 2009, when ICANN’s rules went into effect and it was widely thought that implementation of the new gTLD program was imminent, the executives of Demand Media Group realized that Demand Media’s sordid history would clearly block its ability to successfully apply for the new gTLDs.
As an initial gambit, Demand Media petitioned ICANN to revise the rules.
When ICANN rejected those revisions, the undersigned believes Demand Media decided it would be necessary to create a new entity to participate in the new gTLD program. As a result, Donuts was formed by Messrs. Stahura and Tindal.
It would make a mockery of ICANN rules, however, if Demand Media Group and its executives could absolve themselves of their record of adverse UDRP decisions merely by forming a new entity.

Donuts founders Paul Stahura and Richard Tindal were both with Demand when it lost a bunch of UDRP cases.
Stoler alleges that they left to form Donuts mainly because they didn’t think Demand would pass ICANN’s background checks.
While Donuts has made no secret of the fact that it’s behind 307 applications — and ICANN’s leadership is certainly already aware of this — each application has been filed by a different shell company.
The trail to Donuts is at least two companies deep in many cases, and it’s not entirely clear how its applications with Demand Media are structured, from a corporate point of view.
Ironically, Stoler’s letter does not disclose his affiliations — which clients he’s working for — either.
The smart money is probably on big trademark interests, but it’s not beyond the bounds of possibility, I suppose, that he could be on the payroll of rival new gTLD applicants.
I’ve reached out to Stoler, Donuts and Demand Media for comment and will provide updates later as appropriate.
Here’s the Stoler letter (pdf)

Demand Media applies for 26 gTLDs, partners with Donuts on 107 more

Demand Media, owner of eNom, has applied to ICANN for 26 new generic top-level domains, and may acquire rights in 107 more if applications submitted by Donuts are approved.
The company has not yet revealed which strings it’s going for.
Donuts said last week that it’s applying for 307 gTLDs with Demand Media as its back-end provider, but it seems that Demand will not have ownership rights in 200 of those.
The deal with Donuts, which was founded by eNom alum, is a “strategic relationship”, according to a press release.

Go Daddy applying for three new gTLDs

Go Daddy reportedly plans to apply for three new generic top-level domains, including the dot-brand .godaddy.
CEO Warren Adelman confirmed the bids to CNet’s Paul Sloan today.
The other two strings were not revealed, presumably because they could still be contested.
Yesterday, Demand Media, owner of Go Daddy’s primary registrar competitor eNom, revealed an $18 million investment in the new gTLD program, suggesting it has more ambitious plans.
Like Demand, Go Daddy subsidiaries have a history of adverse UDRP decisions, which could complicate the background checks ICANN plans to conduct on all applicants.

Demand Media mum on $18m new gTLDs investment

Demand Media has invested $18 million in new generic top-level domains, but it won’t disclose whether it has spent all of the money on application fees.
The company, which owns number two domain name registrar eNom, held its first-quarter earnings conference call this evening, during which it revealed the investment.
A roughly $18 million investment could mean as many as 100 new gTLD applications, but Demand executives refused to elaborate on its plans.
CFO Charles Hilliard said that new gTLDs are seen as a “significant strategic growth opportunity” and that Demand would provide more details upon the closure of ICANN’s application window.
As Mike Berkens has already suggested tonight on TheDomains, a massive investment in application fees seems to be the most plausible use for the money.
The fact that the whole of the investment appears to have been made in April would support this view.
But CEO Richard Rosenblatt also confirmed during the call that the company has now also entered into the registry services provider business, providing the back-end for other applicants.
It does not appear to have been particularly successful attracting clients. Rosenblatt said that Demand has created a back-end platform and “signed our first two strategic customers”.
Just two clients would put Demand at the low end of the registry service provider rankings in this first new gTLD round.
I’m aware of at least one applicant that changed its mind about partnering with the company for its application.
ICANN’s background checks on new gTLD applicants include probes into, among other things, adverse cybersquatting decisions under the UDRP.
Demand Media, as a massive domain registrant, gets hit by UDRP complaints fairly regularly, and some have said it’s lost enough to be disqualified from running a registry under ICANN’s rules.
As far as I’m aware, it’s currently an open question whether hiding UDRP losses and applications behind subsidiaries will be enough to evade these background checks.
But if Demand is prepared to pump $18 million into applications, it must have a pretty good inkling that it won’t tumble at the first hurdle.

Second .music applicant is Demand Media partner

Far Further has come out as the second company to say it plans to apply to ICANN for the .music top-level domain.
It’s also, I believe, the first applicant to reveal that it has partnered with Demand Media registrar eNom for its back-end registry services.
Far Further is one of a number of likely applicants for .music. The only other applicant to go public to date is Constantine Roussos’ dotMusic.
The new company is headed by former Warner Music record producer Loren Balman, CEO, and former music journalist John Styll, president. Former PIR chief Alexa Raad of Architelos is advising.
Far Further says its .music will “provide the global music community a secure identifying Internet address that supports the promotion of music, the protection of intellectual property rights, and the advancement of global access to music education.”
It’s my belief that the successful .music applicant will be the one that can secure the support of organizations such as the Recording Industry Association of America and its overseas counterparts.
The RIAA’s concerns about piracy spreading through .music domains, however misplaced, suggest that any other applicant is likely to find itself on the receiving end of objections, if not lawsuits.
Support from such organizations would also be critical to any bid that plans to invoke a Community Priority Evaluation — a trump card that well-supported applications can play in the ICANN process.
Perhaps the most interesting revelation about Far Further is the company’s selection of eNom, and its Shared Registry System, as its back-end technology services provider.
eNom is of course the world’s second-largest domain name registrar, with over 11 million domains under management, but it has yet to enter the registry services market.
There’s still a bit of a question mark over eNom’s ability to pass ICANN’s background checks, due to its UDRP losses, but this may not be a problem if it is merely the back-end provider, rather than the applicant itself.

Three strikes UDRP rule worries Demand Media

Demand Media and the Internet Commerce Association have called for ICANN to drop the “three strikes and you’re out” ban on applying for new top-level domains.
In the current version of ICANN’s Applicant Guidebook, if you’ve lost three UDRP cases in the last four years you’re considered a cybersquatter and effectively barred from applying for a new TLD.
It’s not entirely clear, but it is quite possible that this provision may capture Demand Media and Go Daddy, which, via subsidiary companies, have lost several UDRP complaints.
In comments filed with ICANN yesterday, Demand senior vice president Jeff Eckhaus said that a simple “three strikes” benchmark does not prove a pattern of cybersquatting:

losing a few contested UDRP cases in what amounts to a tiny percentage of their total domain name portfolio certainly doesn’t seem to constitute a “pattern” as most people would define the term
…
by all reasonable standards, it is difficult to conclude that an entity or an individual has engaged in a history/pattern of cybersquatting when they own hundreds or thousands of domain names and have lost a few UDRP or similar proceedings.

The ICA, which represents high-volume registrants, also has a problem with the rule. Principal Phil Corwin wrote ICANN:

We continue to believe that the “three strikes” criteria is too inflexible and that applicant evaluation criteria should take into account the total size of an applicant’s domain portfolio as well as the percentage of adverse UDRP decisions rendered against them in comparison to all UDRP proceedings they have been involved with.

Demand also argues that three strikes is “extremely broad standard that we believe will unintentionally disqualify otherwise qualified applicants.”
That strikes me as quite a weak argument, which could be equally applied to any of the background checks in the Guidebook. A murder conviction will also “disqualify otherwise qualified applicants”.
I’m not sure it’s “unintentional” in either case. If you work from the assumption that ICANN expects Demand and other speculators to successfully apply for new TLDs, it is. If you assume it’s designed to make their lives more difficult, it isn’t.
But Corwin noted in his comments that ICANN can waive the ban in “exceptional circumstances”, and said he suspects this could be used to allow large registrars to pass the background checks.
In any event, as Andrew Allemann has pointed out at Domain Name Wire, the way the Guidebook is phrased there may well be a loophole that would allow Demand and others to slip through.
Go Daddy, which DNW also reports could be affected by the rule, does not appear to have filed any comments on the latest Applicant Guidebook yet.

Demand Media says Google change no big deal, yet

Demand Media has said that recent changes to Google’s search engine algorithm does not appear to have had a material impact on its business.
Google said yesterday that it has changed its code to demote “sites which are low-value add for users, copy content from other websites or sites that are just not very useful”.
This was widely interpreted as being designed to hit “content farms”, which make up one of Demand’s major revenue streams. The company also owns number two domain registrar eNom.
In a blog post, published less than four hours after Google announced the change, Demand executive vice president Larry Fitzgibbon wrote:

As might be expected, a content library as diverse as ours saw some content go up and some go down in Google search results… It’s impossible to speculate how these or any changes made by Google impact any online business in the long term – but at this point in time, we haven’t seen a material net impact on our Content & Media business.

It remains to be seen if the changes will have any impact on traffic and revenue at Demand, which recently executed an IPO, but Fitzgibbon played down the company’s focus on search traffic.
Demand also measures success based on metrics such as direct navigation, repeat visits and traffic from social media, he wrote.