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Verisign likely $135 million winner of .web gTLD

Kevin Murphy, August 1, 2016, Domain Registries

Verisign has emerged as the likely winner of the .web gTLD auction, which closed on Thursday with a staggering $135 million winning bid.

The shell company Nu Dot Co LLC was the prevailing applicant in the auction, which ran for 23 rounds over two days.

Just hours after the auction closed, Domain Name Wire scooped that Verisign had quietly informed investors that it has committed to pay $130 million for undisclosed “contractual rights”.

In its Securities and Exchange Commission quarterly report, filed after the markets closed on Thursday, Verisign said:

Subsequent to June 30, 2016, the Company incurred a commitment to pay approximately $130.0 million for the future assignment of contractual rights, which are subject to third-party consent. The payment is expected to occur during the third quarter of 2016.

There seems to be little doubt that the payment is to be made to NDC (or one of its shell company parents) in exchange for control of the .web Registry Agreement.

The “third-party consent” is likely a reference to ICANN, which must approve RA reassignments.

We speculated on July 14 that Verisign would turn out to be NDC’s secret sugar daddy, which seems to have been correct.

Rival .web applicant Donuts had sued ICANN for an emergency temporary restraining order, claiming it had not done enough to uncover the identity of NDC’s true backers, but was rebuffed on multiple grounds by a California judge.

Donuts, and other applicants, had wanted the contention set settled privately, but NDC was the only hold-out.

Had it been settled with a private auction, and the $135 million price tag had been reached, each of the seven losing applicants would have walked away with somewhere in the region of $18.5 million in their pockets.

This draws the battle lines for some potentially interesting legal fallout.

It remains to be seen if Donuts will drop its suit against ICANN or instead add Verisign in as a defendant with new allegations.

There’s also the possibility of action from Neustar, which is currently NDC’s named back-end provider.

Assuming Verisign plans to switch .web to its own back-end, Neustar may be able to make similar claims to those leveled by Verisign against XYZ.com.

Overall, Verisign controlling .web is sad news for the new gTLD industry, in my view.

.web has been seen, over the years, as the string that is both most sufficiently generic, sufficiently catchy, sufficiently short and of sufficient semantic value to provide a real challenge to .com.

I’ve cooled on .web since I launched DI six years ago. Knowing what we now know about how many new gTLD domains actually sell, and how they have to be priced to achieve volume, I was unable to see how even a valuation of $50 million was anything other than a long-term (five years or more) ROI play.

Evidently, most of the applicants agreed. According to ICANN’s log of the auction (pdf) only two applicants — NDC and another (Google?) — submitted bids in excess of $57.5 million.

But for Verisign, .web would have been a risk in somebody else’s hands.

I don’t think the company cares about making .web a profitable TLD, it instead is chiefly concerned with being able to control the impact it has on .com’s mind-share monopoly.

Verisign makes about a billion dollars a year in revenue, with analyst-baffling operating margins around 60%, and that’s largely because it runs .com.

In 2015, its cash flow was $651 million.

So Verisign has dropped a couple of months’ cash to secure .web — chickenfeed if the real goal is .com’s continued hegemony.

In the hands of a rival new gTLD company’s marketing machine, in six months we might have been seeing (naive) headlines along the lines of “Forget .com, .web is here!”.

That won’t happen now.

I’m not privy to Verisign’s plans for .web, but its track record supporting the other TLDs it owns is not fantastic.

Did you know, or do you remember, that Verisign runs .name? I sometimes forget that too. It bought it from Global Name Registry in late 2008, at the high point of its domains under management in this chart.

.name

I don’t think I expect Verisign to completely bury .web, but I don’t think we’re going to see it aggressively promoted either.

It will never be positioned as a competitor to .com.

If .web never makes $135 million, that would be fine. Just as long as it doesn’t challenge the perception that you need a .com to be successful, Verisign’s purchase was worth the money.

Google offers reseller widget, signs first partners

Google’s registrar, Google Domains, has started offering a widget to make it easier to become a reseller.

The Google Domains widget has already been deployed by five web site builders — Big Cartel, Duda, Selz, Square and Webflow — the company said.

These companies have evidently embedded the software — a chunk of Javascript — into their web sites.

Google said it handles payment and DNS configuration — pointing the newly registered domains to the appropriate service — on behalf of its partners.

More details are here and here. For some reason Google is using domains.withgoogle.com for this program, even though it has a perfectly serviceable dot-brand in the root.

Google registrar dumps .com for dot-brand

Kevin Murphy, March 30, 2016, Domain Registrars

Google has started using its primary dot-brand gTLD for its registrar business.

The URL domains.google.com now bounces users to domains.google. The site sells domains from $12 a year with free Whois privacy.

Is this move a big deal for improving new gTLD awareness? I don’t think so.

Anyone visiting any major registrar’s storefront is likely to become aware that new gTLDs exist really rather quickly, regardless of the registrar’s own choice of domain.

A registrar using its dot-brand is not going to work wonders for new gTLD awareness in the general populace.

If Google were to start using .google for any of its non-domain projects, such as search.google, that would be different.

The company was already using registry.google for its registry business’s web site.

Blue Coat explains .zip screw-up

Kevin Murphy, September 4, 2015, Domain Tech

Security vendor Blue Coat apparently doesn’t check whether domains are actually domains before it advises customers to block them.

The company yesterday published a blog post that sought to explain why it denounced Google’s unlaunched .zip gTLD as “100% shady” even though the only .zip domain in existence leads to google.com.

Unrepentant, Blue Coat continued to insist that businesses should consider blocking .zip domains, while acknowledging there aren’t any.

It said that its censorware treats anything entered into a browser’s address bar as a URL, so it has been treating file names that end in .zip — the common format for compressed archive files — as if they are .zip domain names. The blog states:

when one of those URLs shows up out on the public Internet, as a real Web request, we in turn treat it as a URL. Funny-looking URLs that don’t resolve tend to get treated as Suspicious — after all, we don’t see any counter-balancing legitimate traffic there.

Further, if a legal domain name gets enough shady-looking traffic — with no counter-evidence of legitimate Web traffic — it’s possible for one of our AI systems to conclude that the behavior isn’t changing, and that it deserves a Suspicious rating in the database. So it gets one.

In other words, Blue Coat has been categorizing Zip file names that somehow find their way into a browser address bar as .zip domain names.

That may sound like a software bug that Blue Coat needs to fix, but it’s still telling people to block Google’s gTLD anyway, writing:

In conclusion, none of the .zip “domains” we see in our traffic logs are requests to registered sites. Nevertheless, we recommend that people block these requests, until valid .zip domains start showing up.

That’s a slight change of position from its original “Businesses should consider blocking traffic that leads to the riskiest TLDs”, but it still strikes me as irresponsible.

The company has still not disclosed the real numbers behind any of the percentages in its report, so we still have no idea whether it was fair to label, for example, Famous Four’s .review as “100% shady”.

After abc.xyz, will Google now switch to .google?

Kevin Murphy, August 12, 2015, Domain Registries

Google provided the new gTLD industry with one of its most prominent endorsements to date when it revealed this week that its new parent company, Alphabet, will use a .xyz domain name.

But it could just be the first move away from traditional TLDs such as .com — its new gTLD .google entered its “general availability” phase today.

Alphabet will be the holding company for Google the search engine provider, as well as many other subsidiaries focused on non-core areas of its business, and will replace Google as the publicly traded entity.

The new company will use abc.xyz as its primary domain.

XYZ.com CEO Daniel Negari told Wired that the move is “the ultimate validation”, and it’s hard to disagree.

Despite this, almost all the coverage in the tech and mainstream media over the last 24 hours has been about the fact that it does not own alphabet.com.

A Google News search for “alphabet.com” today returns over 67,000 results. Refine the search to include “abc.xyz” and you’re left with fewer than 2,700.

This is perhaps to be expected; BMW owns alphabet.com and has told the New York Times it does not intend to sell it. Journalists naturally gravitate towards conflict, or potential conflict.

Some reporters even suggested, with mind-boggling naivety, that Google hadn’t even done the most cursory research into its new brand before embarking on the biggest restructuring in its history as a public company.

But perhaps the reality is a little simpler: owning a .com that exactly matches your brand just isn’t that important any more.

If any company has insight into the truth of that hypothesis, it’s Google.

It should hardly be surprising that Google digs the possibilities offered by new gTLDs — remember, it applied for 101 strings and has 42 of them already delegated.

Its senior engineers have also blogged repeatedly that all gTLDs, including .com, are treated equally by its search algorithms.

Now that it has made the decision to brand its holding company on a new gTLD domain, could we expect it be similarly nonchalant about a switch to .google?

The dot-brand today came out of its pre-launch phase and entered “general availability”, meaning that the gTLD is now free for it to use.

The .google zone file only has a few domains in it at present, so we’re probably not going to see anything deployed there overnight, but I’d be surprised if we have to wait a long time before .google is put to use in one way or another.

The company set up a fleeting April Fool’s Day website at com.google earlier this year.

Google’s application for .google states:

The mission of the proposed gTLD, .google is to make the worldʹs information universally accessible and useful through the streamlined provision of Google services. The purpose of the proposed gTLD is to provide a dedicated Internet space in which Google can continue to innovate on its Internet offerings. The proposed gTLD will augment Googleʹs online presence in other registries, provide Google with greater ability to categorize its present online locations around the world, and in turn, deliver a more recognizable, branded, trusted web space to both the general Internet population and Google employees. It will also generate efficiencies and increase security by reducing Google’s current dependence on third-party infrastructure.

The company has also stated on its Google Registry web site that it intends to use .google, .youtube and .plus “for Google products”.