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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

Kevin Murphy, May 16, 2011, Domain Policy

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

Kevin Murphy, February 25, 2011, Domain Registrars

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.