Donuts makes weird investment in startup

Donuts has made a surprising investment in a company that makes geolocation technologies.
The new gTLD registry operator announced yesterday that it has something called Donuts Labs, through which it will make “strategic investments” in “similar” companies.
Its first investment is in California tech startup GeoFrenzy, which operates in the emerging “geofences” space.
A geofence is a virtual perimeter around a defined geographic location.
Basically, GeoFrenzy has divided the world up into square-centimeter chunks and stores data about who owns these chunks in a registry database.
Using the GPS service you’ll find in all modern mobile devices, apps using the technology can figure out when you walk into or out of a registered, fenced-off area, triggering some behavior.
Such services are believed to have applications ranging from logistics to advertising. One example on the GeoFrenzy web site says that its database and software could be used to keep drones out of restricted airspace.
The terms of the deal with were not disclosed, but it’s surprising news for a couple of reasons.
First, Donuts appears to have cash to throw around on pet side-projects at a time when one would assume, as an early-stage company itself, it would be more focused on growing its fledgling new gTLD business.
Second, the press release makes out that there are technology synergies between the companies.
GeoFrenzy CEO Sean Eilers is quoted as saying: “Their expertise in managing a highly scalable registry and their experience with innovative DNS technologies makes Donuts an ideal fit as an investor and strategic partner.”
But to the best of my knowledge Donuts doesn’t have any experience managing a highly scalable registry. It outsources all of that kind of thing to Rightside, doesn’t it?
Donuts says it will be making more, similar investments in future.

.mobile will be restricted after Donuts loses auction to Dish DBS

The contention set for the new gTLD .mobile has been resolved, seemingly by private auction, with Dish DBS emerging victorious.
The portfolio registry withdrew its application at the weekend, leaving the satellite TV provider the only remaining applicant.
This means that .mobile will be a restricted gTLD, available only to vetted members of the mobile telephony industry.
Dish had originally proposed .mobile as a so-called “closed generic”, in which it would be the registry and only registrant, but changed its application last year.
It’s a similar story to .phone, which Dish also won.
Dish applied for 13 gTLDs. It withdrew two applications, and 10 others are either in pre-delegation testing or ICANN contracting.

Schilling agrees with activist Rightside investor

Uniregistry boss Frank Schilling agrees to a large extent with the fellow Rightside investor who was revealed today to be threatening a boardroom coup at Rightside.
Schilling, who is believed to have paid $8.4 million for 6.1% of Rightside, told DI tonight that he believes Rightside’s management has not done a good job over the last few years.
He said he agrees with 7.32% shareholder J Carlo Cannell, who says that Rightside should get rid of some of its weaker new gTLDs.
Cannell, of Cannell Capital, is demanding Rightside lay off one in five of its staff, dump its weakest new gTLDs, and refocus the company on its eNom registrar business.
He’s threatening to launch a proxy fight at the company in order to replace the Rightside board of directors with his own slate if management does not do what he wants.
Cannell’s letter called out .democrat, .dance, .army, .navy, and .airforce as “irrelevant” or “garbage” gTLDs in Rightside’s portfolio that should be sold or simply “abandoned” in order to focus on its better gTLDs, such as .news, and its cash-generating registrar business.
Schilling told DI tonight that he agrees with Cannell, at least partly.
He said that if Cannell’s proposal for the company is good for shareholders and the company he would support it.
It may sound counter-intuitive for Schilling, one of the most ardent proponents of new gTLDs, to support somebody encouraging Rightside to invest less in marketing its new gTLD portfolio.
After all, Uniregistry has a couple dozen new gTLDs — including .sexy, .christmas, .pics and .link — in its stable
But Schilling has form when it comes to advocating portfolio rationalization.
Today he pointed to comments he made on a DI article in December
“Operators may make the decision to give away or sunset unprofitable strings,” he said in those comments. “I don’t view that as such a bad thing.”
Schilling said that weaker strings should be “bootstrapped” rather than aggressively invested in.
One of Cannell’s beefs with Rightside is that the company is focusing too much on new gTLDs. He’s not opposed to new gTLDs in general — in fact, he likes them — but he wants Rightside to put money only into those gTLDs he considers worthwhile.
Cannell also wants Name.com rebranded to eNom and moved to Rightside’s Seattle headquarters, for two of its directors to be replaced and for 20% of Rightside’s “weakest” staff to be laid off.
I asked Schilling whether he agreed with Cannell that that 20% of Rightside’s staff should be let go.
He said: “I do not think it is healthy to name arbitrary numbers but I do think some wrong people are in the wrong seats.”
Schilling also said that he believes Rightside has been “subservient” to Donuts, and has given Donuts too much for too little.
Donuts is the portfolio gTLD registry play that uses Rightside as its back-end registry provider.
Donuts has a much better portfolio, in my irrelevant opinion.
Another notable investor in Rightside is XYZ.com CEO Daniel Negari and his COO Michael Ambrose, who collectively invested roughly $8.5 million in Rightside at around the same time as Schilling and Cannell bought their stakes.
Like Schilling, they’re an obviously pro-new-gTLD play. I’ve asked Negari for his opinion on Cannell’s letter and will update should I ever receive a response.

Donuts makes Hollywood content policing deal

Donuts has made a deal with the American movie industry that will make it easier to take down piracy domains.
The Motion Picture Association of America has been given a “Trusted Notifier” status, and the two companies have agreed upon a domain take-down framework.
The agreement targets “large-scale pirate websites”, Donuts said.
It’s the first such deal Donuts has made, executive VP Jon Nevett told DI, but it’s likely to be extended into other industries, possibility including music, pharmaceuticals and child abuse prevention.
“This could be a model for not just content-related issues,” he said.
Nevett did not want to get into much detail about the specifics of the take-down process by discussing the definition of “large scale” or timing, but he did say that the MPAA has an obligation to do manual research into each domain it wants suspending.
After it receives a report from the MPAA, Donuts will reach out to the registrar and registrant to ask for an explanation of the alleged piracy.
A decision to suspend the domain or leave it alone would be made “solely in our discretion”, Nevett said.
Donuts already has this in its acceptable use policy, which reads in part:

Donuts reserves the right, at its sole discretion and at any time and without limitation, to deny, suspend, cancel, redirect, or transfer any registration or transaction, or place any domain name(s) on registry lock, hold, or similar status as it determines necessary for any of the following reasons:
…
domain name use is abusive or violates this AUP, or a third party’s rights or acceptable use policies, including but not limited to the infringement of any copyright or trademark;

While Donuts is the registry for .movie and .theater, the MPAA agreement applies to all of its almost 200 gTLDs.
The announcement comes the day before the Domain Name Association meets to discuss its Healthy Domains Initiative.
Nevett said that DNA members will meet tomorrow with law enforcement, IP owners, and abuse prevention and security folk to seek input on the question “What are tenets of healthy domain ecosystem?”
That input will be discussed at a subsequent DNA meeting, likely to coincide with the ICANN meeting in Marrakech this April.
The eventual goal is to come up with a set of voluntary best practices for registries and registrars.
Nevett stressed that the MPAA deal, and whatever the DNA comes up with, are voluntary agreements made outside the auspices of ICANN’s contracts.
Despite this, the “Trusted Notifier” concept does put me in mind of section 3.18 of the Registrar Accreditation Agreement, where governmental or affiliated entities are given special powers to have dodgy domains investigated and suspended.

Donuts adds two millionth domain

Donuts today said that it has added its two millionth new domain name registration.
The domain in question was schedule.holiday, the company said.
The number appears to refer to fresh registrations, not including renewals, across all of its TLDs.
Its first batch of gTLDs launched about two years ago.
The registry currently has 192 new gTLDs, 185 of which are in general availability, according to DI records, making the average haul about 10,000 names per TLD.
If we were talking $20 per registration (an estimate, as Donuts doesn’t publish its registry fees), the company would have made $40 million from new regs.
That’s not including its sunrise fees, renewals, or recurring premium-fee domains, of course.
It spent almost $57 million just on ICANN application fees.
It expects to wind up with about 200 by the time the current application round ends.
Its best performer to date is .guru, one of its first to launch, which has about 65,000 names in its zone file today and, according to Donuts, over 67,000 names in total.

Uniregistry beats Donuts to .shopping, but .shop still in play

Uniregistry has emerged as the successful registry-to-be of .shopping from the convoluted .shop/.shopping new gTLD contention set.
Donuts, the only competing applicant for the string, withdrew its application late last week.
As we previously reported, the .shop/.shopping contention sets were joined at the hip due to a bizarre string similarity challenge, making the scheduled auction very complex.
But Donuts and Uniregistry seem to have come to a private arrangement about .shopping, outside of the ICANN auction process, making .shop a straightforward nine-way fight.
Donuts tells me the auction, in which it is participating, is still scheduled for January 27.

.phone will be restricted after Dish gTLD auction win

The new gTLD .phone is going to be tightly restricted, after Dish DBS won the contested string at auction.
The American satellite communications firm beat Donuts to the gTLD, judging by Donuts’ withdrawal from the two-horse on Friday.
This means that if you’re not a licensed telecoms or voice-over-IP service provider, you won’t be able to register a .phone domain, at least at first.
Dish originally applied for .phone as what became known as a “closed generic” — a non-trademark, dictionary word that would nevertheless be operated as a dot-brand, with a single eligible registrant.
Due to Governmental Advisory Committee advice against such business models, Dish changed its application this September to describe .phone instead as a “controlled” gTLD.
Its application states that only Dish, its affiliates and “Qualified Applicants” will at first be able to register .phone domains.
“Qualified Applicants” basically means any company licensed to run a telecommunications service anywhere in the world. The eligibility gate appears to be the “license”.
The application says Dish will reserve the right to open up the gTLD to further classes of registrants at a later date.
While it also says that Dish will not give itself or friendly registrars any “undue preference”, the telecoms industry is suspicious.
USTelecom, the industry body representing large and small US-based telecoms companies, wrote to ICANN in November to say Dish’s volte face was “unconvincing” and its proposals “simply fail to satisfy” ICANN’s rules banning closed generics.
It said in its letter (pdf):

While Dish purports in its amended application that the .phone gTLD will be operated as a “controlled gTLD,” it is in reality an exclusive generic TLD, prone to discriminatory and subjective determinations on which entities are “Qualified Applicants,” and a discretionary reservation “to open this TLD to additional classes of registrants in the future,” who “will not be considered members.”

USTelecom says it negotiated with Dish, in an attempt to resolve its earlier formal objection against the bid, to have Dish include some reassuring Public Interest Commitments in its application, but Dish refused.
ICANN, responding to USTelecom, said that any Registry Agreement Dish signs for .phone will include the clauses that prevent it operating as a closed generic.
Now that the contention set has been settled, Dish’s next step is to proceed to contract negotiations with ICANN.

ICANN reveals 12 more data breaches

Twelve more new gTLD applicants have been found to have exploited a glitch in ICANN’s new gTLD portal to view fellow applicants’ data.
ICANN said last night that it has determined that all 12 access incidents were “inadvertent” and did not disclose personally identifiable information.
The revelation follows an investigation that started in April this year.
ICANN said in a statement:

in addition to the previous disclosures, 12 user credentials were used to access contact information from eight registry operators. Based on the information collected during the investigation it appears that contact information for registry operators was accessed inadvertently. ICANN also concluded that the exposed registry contact information does not appear to contain sensitive personally identifiable information. Each of the affected parties has been notified of the data exposure.

The glitch in question was a misconfiguration of a portal used by gTLD applicants to file and view their documents.
It was possible to use the portal’s search function to view attachments belonging to other applicants, including competing applicants for the same string.
Donuts said in June that the prices it was willing to pay at auction for gTLD string could have been inferred from the compromised data.
ICANN told compromised users in May that the only incidents of non-accidental data access could be traced to the account of Dirk Krischenowski, CEO of dotBerlin.
Krischenowski has denied any wrongdoing.
ICANN said last night that its investigation is now over.

Pro-.com analyst “sponsored” by Verisign. Is this a big deal?

Verisign has admitted it “sponsors” an analyst who has written more than a dozen articles singing the praises of .com and questioning the value of new gTLDs over the last few years.
Zeus Kerravala is the founder and principal analyst at ZK Research. He writes a regular column for Network World called Network Intelligence.
Last week, domain industry eyebrows were raised by the latest in a series of pro-.com articles — all of which seem to have been removed by Network World in the last 24 hours — to appear in the column.
The latest article was entitled “Why more companies are ditching new domain names and reverting to .com“.
Kerravala basically mined domain industry blogs, including this one, for examples of companies preferring .com over ccTLDs and new gTLDS, to support a view that .com is awesome and other TLDs are not.
He could have quite easily have used the same method to reach the opposite conclusion, in my view.
The Halloween-themed article concluded:

The good news is that .com will be here now and into the future, just like it has been for the past 30 years to provide treats to businesses after they have been “tricked” by other TLDs.

The article, and 12 more before it dating back to August 2012, looked to some like Verisign spin.
Other headlines include “Why .com is still the domain of choice for businesses” and “New generic top-level domain names do more harm than good” and “Companies are movin’ on up to .com domain names”.
They’re all basically opinion pieces with a strongly pro-.com slant.
The opinion that .com is better than the alternatives is not uncommon, especially among domainers who have lots of money tied up in .com investments.
The fact that Kerravala, who doesn’t usually touch the domain industry in his column, has written a dozen stories saying essentially the same thing about .com over the last couple of years looked a bit odd to some in the domain industry.
And it turns out that he is actually on the Verisign payroll.
A Verisign spokesperson told DI: “ZK Research is a sponsored industry analyst and blogger.”
The company declined to answer a follow-up question asking whether this meant he was paid to blog.
Kerravala told DI that Verisign is one of his clients, but denied blogging on its behalf. He said in an email:

they are a client like many of the other large technology firms. Although I blog, like many analysts, I am first an foremost an analyst. I have paid relationships with tech vendors, service providers, end user firms, resellers and the financial community.
Verisign pays me for inquiry time and to have access to my research. Verisign has many relationships like this with many analyst firms and I have this type of relationship with many other technology firms.
In no way do vendors pay me to write blogs nor do they influence my research or my opinions. Sometimes, I may choose to interview a vendor on a certain topic and include them in the article.

Kerravala had not disclosed in his Network World articles or boilerplate biography that Verisign is one of his clients.
In a January 2014 article published on SeekingAlpha, “New Generic Top Level Domain Names Pose No Threat To VeriSign“, contains a disclosure that reads in part “I have no business relationship with any company whose stock is mentioned in this article.”
Kerravala said in an email that although his relationship with Verisign started in 2013, the company was not a client at the time the SeekingAlpha article appeared.
The relationship came to light after new gTLD registry Donuts emailed Kerravala via a third party — and Kerravala says under false pretenses — claiming to have liked his most recent article and asking for a contact name at Verisign.
He would have responded honestly to just being asked directly by Donuts, he said.
In a telephone conversation yesterday, he said that his articles about .com represent his genuinely held beliefs which, as we agree, are not particularly unusual.
He observed that DI has a generally pro-TLD-competition point of view, and that many of my advertisers are drawn from the new gTLD industry, and said that his relationship with Verisign is not dissimilar to DI’s relationship to its advertisers.

Correction: .shop auction weirder than I thought

The upcoming auction for .shop and .shopping new gTLDs is weird, but in a different way to which I reported on Friday.
The actual rules, which are pretty complicated, mean that one applicant could win a gTLD auction without spending a single penny.
The nine applicants for .shop and the two applicants for .shopping are not necessarily all fighting it out to be a single victor, which is what I originally reported.
Rather, it seems to be certain that both .shop and .shopping will wind up being delegated.
The ICANN rules about indirect contention are not well-documented, as far as I can tell.
When I originally reported on the rules exactly two years ago today, I thought an animated GIF of a man’s head exploding was an appropriate way to end the story.
In the .shop/.shopping case, it seems that all 11 applications — nine for .shop and two for .shopping — will be lumped into the same auction.
Which applicant drops out first will determine whether both strings get delegated or only one.
Uniregistry and Donuts have applied for .shopping, but only Donuts’ application is in contention with Commercial Connect’s .shop application (due to a String Confusion Objection).
As Donuts has applied for both .shop and .shopping, it will be submitting separate bids for each application during the auction.
The auction could play out in one of three general ways.
Commercial Connect drops out. If Commercial Connect finds the .shop auction getting too rich for it and drops out, the .shopping contention set will immediately become an entirely separate auction between Uniregistry and Donuts. In this scenario, both .shop and .shopping get to become real gTLDs.
Donuts drops its .shopping bid. If Donuts drops its bid for .shopping, Uniregistry is no longer in indirect contention with Commercial Connect’s .shop application, so it gets .shopping for free.
Commercial Connect wins .shop. If Commercial Connect prevails in .shop, that means Donuts has withdrawn from the .shopping auction and Uniregistry wins.
It’s complicated, and doesn’t make a lot of logical sense, but it seems them’s the rules.
It could have been even more complex. Until recently, Amazon’s application for .通販 was also in indirect contention with .shop.
Thanks to Rubens Kuhl of Nic.br for pointing out the error.