A small security firm has singled out eNom as the domain name registrar and web host with the most criminal activity on its network.
HostExploit released a report today claiming the concentration of “badware” on the network belonging to eNom and its soon-to-be-public parent Demand Media is “exceptionally high”.
The claim is based on the proportion of dodgy sites on eNom’s network relative to its size, rather than the actual quantity.
The report says the Demand-owned autonomous system AS21740 has the fifth-highest amount of badware and the sixth-highest number of botnet command and control servers.
It goes on to say that the four or five AS’s with larger amounts of malware are themselves between 10 and 7,500 larger than eNom, as measured by address space.
The report, which I’m guessing HostExploit released to coincide with the hype around Demand Media’s upcoming IPO, draws heavily on existing research, such as this recent KnuJon registrar report (pdf).
It also uses stats from Google-backed StopBadware.org to demonstrate that eNom hosts a disproportionately large number of malware-serving URLs.
According to StopBadware, Go Daddy actually hosts more bad URLs than eNom – 10,797 versus 7,429 – but Go Daddy’s market share is of course over three times larger.
According to WebHosting.info, eNom currently has 9.5 million domains under management, compared to Go Daddy’s 35.2 million.
In Demand Media’s IPO registration statement, filed last Friday, the company acknowledges that it sometimes gets bad publicity but says it’s caught between a rock and a hard place.
We do not monitor or review the appropriateness of the domain names we register for our customers or the content of our network of customer websites, and we have no control over the activities in which our customers engage.
While we have policies in place to terminate domain names if presented with a court order or governmental injunction, we have in the past been publicly criticized for not being more proactive in this area by consumer watchdogs and we may encounter similar criticism in the future. This criticism could harm our reputation.
Conversely, were we to terminate a domain name registration in the absence of legal compulsion, we could be criticized for prematurely and improperly terminating a domain name registered by a customer.
Demand Media, parent of second-largest domain name registrar eNom, has filed to go public, and the publication of its S-1 registration document has given an unprecedented glimpse inside the company.
Unsurprisingly, the “content mill” part of Demand’s operation, which accounts for more than half of its revenue, has garnered the most media coverage over the weekend.
Demand says that the fact that is “transforming traditional content creation models” and is “frequently the subject of unflattering reports in the media about our business and our model.”
Reports of its IPO are no exception.
This report in DailyFinance.com observes that the key difference between Demand and traditional media is that Demand does it “at scale”, with some 10,000 writers producing 5,700 articles per day.
DaniWeb notes that Demand’s freelancers are “working for wages often well below industry standard to churn out content” and said the company is subject to “redundancies, inefficiencies and the reliance on trying to game Google”.
Others are more direct: “wtf: this is why the Internet is full of unreadable junk”
CNNMoney.com reports that Demand is “notorious” for paying as little as $15 per article, and that it can make a 58% return on a month’s articles over seven quarters.
As a freelancer reporter, I don’t like Demand’s model either. I think it devalues the profession. The S-1 reveals that the company is well aware that it’s also quite exploitative:
We believe that over the past two years our ability to attract and retain freelance content creators has benefited from the weak overall labor market and from the difficulties and resulting layoffs occurring in traditional media, particularly newspapers. We believe that this combination of circumstances is unlikely to continue and any change to the economy or the media jobs market may make it more difficult for us to attract and retain freelance content creators.
On the domain name side of the business, DomainNameWire was quickest off the mark, digging out the fact that eNom uses look-ups by prospective registrants to decide what articles might be profitable and what web sites it could develop.
The S-1 says:
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.
eNom has already said that this should NOT be interpreted as “front-running”. (apologies, the first version of this article accidentally omitted the word “not”)
Also found in the S-1, and already known from eNom’s registration agreement Ts & Cs, the company keeps some customers’ expired domain names for itself, if they have value.
I can remember a time not too many years ago when this kind of behavior was frowned upon.
DNW also points to the list of Demand’s subsidiaries. There are 146 of them, at least 100 of which are shells for ICANN registrar accreditations.
Others, such as Acquire This Name, which KnuJon had beef with (pdf) a year ago, act as eNom resellers.
Looking at the financials, All Things Digital gently mocks the company’s reliance on non-standard “Adjusted OIBDA” numbers in its S-1 to make the company appear profitable.
Meanwhile, Mike Berkens at TheDomains is incredulous looking at the amount of money Demand has lost since its inception: some $52 million.
Demand Media has added two big names to its board of directors, a move certain to feed the rumors that the company is preparing for an IPO this year.
Joining the board is Peter Guber, CEO and chairman of Mandalay Entertainment, a TV and movie production company that also has its fingers in the sports and digital media pies.
Josh James also takes a seat. He co-founded web analytics firm Omniture, now part of Adobe, and took it public during the dot-com boom.
“The experience they bring from two different ends of the spectrum – creative arts and web analytics – will be invaluable as Demand Media continues to focus on creating the content that consumers want,” Demand CEO Richard Rosenblatt said.
Demand Media, which owns domain name registrars eNom and BulkRegister, is mainly in the mass-market, search-driven content business.
It was reported last week that the company has hired Goldman Sachs to help it prepare for a public listing later this year.
Bulking up the board is one of the things companies do before they head to the stockmarket.
Demand Media, which owns number-two domain registrar eNom, could file to go public this summer, the Financial Times has reported.
Widely thought of as a “content mill”, Demand is in the business of mining search and domain data and pumping out content which it can sell ads against.
The FT, using anonymous sources, reports that an IPO, which could happen by November, would value the firm at $1.5 billion. Revenue is estimated to be around $250 million a year.
While selling domain names does not appear to be Demand’s core business, other domain name registrars have a rocky record when it comes to public listings.
Register.com, which used its early-mover advantage to IPO at the tail end of the dot-com boom, ended up going private after low-cost registrars like Go Daddy started eating its lunch.
Go Daddy itself gave the world a glimpse at its finances when it filed its S-1 back in 2006, but CEO Bob Parsons yanked the IPO at the eleventh hour, citing poor market conditions and his inability to keep his mouth shut during the traditional pre-offering Quiet Period.
Parsons said at the time that it’s hard to show a profit under GAAP as a growing registrar, due to the way registrations are accounted for.
Tucows, meanwhile, has managed to tick along quietly with a listing on the small-cap markets for years.
Domainers are buzzing with the news that VeriSign has just made tens of thousands of premium .tv names viable for speculation.
The company cut the prices of its premium names and, more importantly, has reset the annual renewal fees for premium domains to the much lower standard flat renewal fee.
Judging from the Namepros forums, a lot of people bought a lot of domains and, potentially, got a lot of very good deals on one-word dictionary or three-letter .tvs.
Some domains appeared to have dropped off the premium list altogether, leading some to speculate that the prices were too good to be true, and that registrar glitches must be responsible.
However, I talked to Chris Sheridan, VP of sales at eNom, a little earlier and he seemed to be of the opinion that the prices were probably legit.
The new lower renewal fees, incidentally, do not appear to apply to previously registered premium .tv names, which is bound to cause angst for some.
I’m not usually much of a speculator, but I took a risk on a couple of cheap dictionary words a couple of hours ago. My new registrar is telling me the registrations were “successful”, but I’ve no idea whether I can believe it.