Latest news of the domain name industry

Recent Posts

Vertical integration – bad news for domainers?

Kevin Murphy, November 10, 2010, Domain Registries

ICANN’s decision to allow domain name registrars to operate registries is a game changer on many fronts, but what impact could it have on domain investors?

For the first time, registrars will be able apply for and run new top-level domains, giving them unprecedented insight into registry-level data.

If they also act as registries, registrars will, for example, be able to see what non-existent domains in their TLD get the most type-in traffic.

They will also be able to see how much traffic expiring domains get, even if the registrant does not use the registrar’s own name servers.

As claimed by some participants in ICANN’s vertical integration working group, this data could be used to “harm” registrants; harms that could be especially noticeable to domainers.

There was a concern from some in the WG that combined registry-registrar entities (we’re going to need a name for these) could use registry data to, for example, identify and withhold high-value names, increasing prices to potential registrants.

The possibility of an increase in “domain tasting” and “front-running” – practices generally frowned upon nowadays – was also raised.

However, some registrars are already owned by companies that register large numbers of traffic domains for themselves, even without access to registry data.

Demand Media subsidiary eNom, the second-largest gTLD registrar, is a good example.

As DomainNameWire reported in August, the company already uses domain name lookups to decide what names to register for itself (though it told DNW it does not “front-run”), saying in SEC filings:

These queries and look-ups provide insight into what consumers may be seeking online and represent a proprietary and valuable source of relevant information for our platform’s title generation algorithms and the algorithms we use to acquire undeveloped websites for our portfolio.

Demand also said that it acquires eNom customers’ expiring domains if they are attractive enough:

Domain names not renewed by their prior registrants that meet certain of our criteria are acquired by us to augment our portfolio of undeveloped owned and operated websites.

Access to registry data could prove invaluable in refining this model, and eNom has, unsurprisingly. long indicated its desire to apply for and operate new TLDs.

But will registries be allowed to exploit this data to line their own pockets?

ICANN indicated today that it plans to introduce a code of conduct for registries, to prevent “misuse of data”, and will likely step up its compliance activities as a result.

What this code of conduct will look like remains to be seen, but I expect we’re looking at “Chinese wall” provisions similar to those self-imposed by VeriSign when it still owned Network Solutions.

It should be pointed out, of course, that standalone registries already have the ability to register domains to themselves, based on their own registry data, and I’m not aware of a great many incidents where this has been abused to the harm of registrants.

Demand Media to invest up to $75m in content

Kevin Murphy, October 12, 2010, Domain Registrars

Demand Media plans to invest between $50 million and $75 million in content in 2011, according to the company’s latest IPO filing.

The company, which owns number two registrar eNom, has also disclosed that it plans to list itself on the New York Stock Exchange under the ticker symbol DMD.

Under “Use of Proceeds” in its latest amended S-1 registration form (huge HTML file), filed today with the Securities and Exchange Commission, Demand says:

We currently anticipate that our aggregate investments in content during the year ending December 31, 2011 will range from $50 million to $75 million.

Demand Media’s main business is the advertising it sells against the thousands of freelance articles it publishes every day. It had about $102 million in current assets on its balance sheet on June 30 this year.

Previous text talking about about using the proceeds of the IPO to “acquire or invest in complementary technologies, solutions or businesses” has been dropped.

The amended S-1 spends quite a lot of time talking about a reverse stock split that it is carrying out prior to its public offering.

Government ‘cybersquatting’ case rattles India

Kevin Murphy, October 4, 2010, Domain Services

Cybersquatting mischief is making headlines in India today, after the nation’s main opposition party accused the government of directing a confusingly similar domain name to its own site.

According to various reports, the opposition Bharatiya Janata Party served a “legal notice” on the ruling Indian National Congress party over the domain name bjp.com.

The BJP hosts its primary site at bjp.org. According to the party, the .com domain has been redirecting users to the Congress’ own site. Today, it resolves to a page parked at Sedo.

The contested domain is currently registered behind eNom’s privacy protection service. It appears to have changed hands several times over the years, most recently to an Indian.

Unless the BJP has some other evidence connecting its rival to the domain, it looks like this may be a case of cheap political point-scoring.

ICANN will not attend White House drugs meeting

Kevin Murphy, September 28, 2010, Domain Policy

ICANN has declined an invitation from the Obama administration to attend a meeting tomorrow to discuss ways to crack down on counterfeit drugs web sites.

The meeting, first reported by Brian Krebs, was called with an August 13 invitation to “registries, registrars and ICANN” to meet at the White House to talk about “voluntary protocols to address the illegal sale of counterfeit non-controlled prescription medications on-line.”

The meeting is reportedly part of the administration’s Joint Strategic Plan to Combat Intellectual Property Theft, which was announced in June.

It also follows a series of reports from security firms that called into question domain name registrars’ willingness to block domains that are used to sell fake pharma.

ICANN tells me that, following talks with White House Intellectual Property Enforcement Coordinator Victoria Espinel, it was agreed that it would “not be appropriate” for ICANN to attend.

The decision was based on the fact that ICANN’s job is to make policy covering internet names and addresses, and not to regulate the content of web sites.

ICANN’s vice president of government affairs for the Americas, Jamie Hedlund, said the meeting was “outside the scope of our role as the technical coordinator of the Internet’s unique identifiers.”

I suspect it also would not have looked great on the global stage if ICANN appeared to be taking its policy cues directly from the US government rather than through its Governmental Advisory Committee.

Demand Media-owned registrar eNom, which has took the brunt of the recent criticism of registrars, recently signed up to a service that will help it more easily identify and terminate domains used to sell counterfeit medicines.

eNom to crack down on fake pharma sites

Kevin Murphy, September 17, 2010, Domain Registrars

Demand Media is to tighten security at its domain registrar arm, eNom, after bad press blighted its recent IPO announcement.

The company has signed a deal with fake pharmacy watchdog LegitScript, following allegations that eNom sometimes turns a blind eye to illegal activity on its customers’ domains.

The news emerged in the company’s amended S-1 registration statement (large HTML file), filed with the US Securities and Exchange Commission yesterday. New text reads:

We recently entered into an agreement with LegitScript, LLC, an Internet pharmacy verification and monitoring service recognized by the National Association of Boards of Pharmacy, to assist us in identifying customers who are violating our terms of service by operating online pharmacies in violation of U.S. state or federal law.

LegitScript will provide eNom with a regularly updated list of domain names selling fake pharma, so the registrar can more efficiently turn them off. The companies have also agreed to work together on research into illegal online pharmacies.

Surrounding text has also been modified to clarify that eNom is not required, under ICANN rules, to turn off domains that are being used to conduct illegal activity.

This is a bit of a PR win for the small security outfits KnuJon and HostExploit, firms which had used the occasion of Demand’s S-1 filing to give eNom a good kicking in the tech and financial press.

HostExploit reported last month that eNom was statistically the “worst” registrar as far as illegal content goes.

ICANN executives are reportedly going to be hauled to Washington DC at the end of the month to explain the problem of fake pharma to the White House.

Registries and registrars have also been invited, and I’d be surprised if eNom is not among them.