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Is Verisign .web applicant’s secret sugar daddy?

The fiercely contested .web gTLD is being forced into a last-resort auction and some people seem to think a major registry player is behind it.

Two .web applicants — Radix (pdf) and Schlund (pdf) — this week wrote to ICANN to demand that the .web auction, currently planned for July 27, be postponed.

They said the sale should be delayed to give applicants time “to investigate whether there has been a change of leadership and/or control” at rival applicant Nu Dot Co LLC.

Nu Dot Co is a new gTLD investment vehicle headed up by Juan Diego Calle, who launched and ran .CO Internet until it was sold to Neustar a couple of years ago.

I gather that some applicants believe that Nu Dot Co’s .web application is now being bankrolled by a larger company with deeper pockets.

The two names I’ve heard bandied around, talking to industry sources this week, are Verisign and Neustar.

Nobody I’ve talked to has a shred of direct evidence either company is involved and Calle declined to comment.

So is this paranoia or not?

There are a few reasons these suspicions may have come about.

First, the recent revelation that successful .blog applicant Primer Nivel, a no-name Panama entity with a Colombian connection, was actually secretly being bankrolled by WordPress, has opened eyes to the possibility of proxy bidders.

It was only after the .blog contention set was irreversibly settled that the .blog contract changed hands and the truth become known.

Some applicants may have pushed the price up beyond the $19 million winning bid — making the rewards of losing the private auction that much higher — had they known they were bidding against a richer, more motivated opponent.

Second, sources say the .web contention set had been heading to a private auction — in which all losing applicants get a share of the winning bid — but Nu Dot Co decided to back out at the last minute.

Under ICANN rules, if competing applicants are not able to privately resolve their contention set, an ICANN last-resort auction must ensue.

Third, this effective vetoing of the private auction does not appear to fit in with Nu Dot Co’s strategy to date.

It applied for 13 gTLDs in total. Nine of those have already gone to auctions that Nu Dot Co ultimately lost (usually reaping the rewards of losing).

The other four are either still awaiting auction or, in the case of .corp, have been essentially rejected for technical reasons.

It usually only makes sense to go to an ICANN last-resort auction — where the proceeds all go to ICANN — if you plan on winning or if you want to make sure your competitors do not get a financial windfall from a private auction.

Nu Dot Co isn’t actually an operational registry, so it doesn’t strictly have competitors.

That suggests to some that its backer is an operational registry with a disdain for new gTLD rivals. Verisign, in other words.

Others think Neustar, given the fact that its non-domains business is on the verge of imploding and its previous acquisition of .CO Internet from Calle.

I have no evidence either company is involved. I’m just explaining the thought process here.

According to its application, two entities own more than 15% of Nu Dot Co. Both — Domain Marketing Holdings, LLC and NUCO LP, LLC — are Delaware shell corporations set up via an agent in March 2012, shortly before the new gTLD application filing deadline.

Many in the industry are expecting .web to go for more than the $41.5 million GMO paid for .shop. Others talk down the price, saying “web” lacks the cultural impact it once had.

But it seems we will all find out later this month.

Responding to the letters from Schlund and Radix, ICANN yesterday said that it had no plans to postpone the July 27 last-resort auction.

All seven applicants had to submit a postponement form by June 12 if they wanted a delay, ICANN informed them in a letter (pdf), and they missed that deadline.

They now have until July 20 to either resolve the contention privately or put down their deposits, ICANN said.

The applicants for .web, aside from Nu Dot Co, are Google, Donuts, Radix, Schlund, Web.com and Afilias.

Due to a string confusion ruling, .webs applicant Vistaprint will also be in the auction.

Neustar to split into two

Neustar is to split into two companies and its domain name business is set for a rebranding.

The company said yesterday that it is breaking into an Order Management & Numbering Services company which will be called Neustar, and an Information Services company, which contains the domain business and will get a new name.

“The proposed spin-off will enable Neustar shareholders to own and value each business separately, allowing each company to attract the investor base most appropriate for its distinct investment profile,” said Neustar chair James Cullen.

That’s another way of saying the company is dumping all of its serious risk into the company that will remain Neustar.

Neustar currently holds the Local Number Portability Administration contract with the US government, under which it manages the central database of phone numbers.

It’s worth $496 million a year, but the US Federal Communications Commission has decided to switch to Ericsson unit Telcordia Technologies, which offered a better deal.

While Neustar is fighting the decision in court, its prospects don’t look great.

Separating the domain business from the numbering contract should insulate it from that risk.

The yet-to-be-named spin-off containing the domain business is worth $470 million a year, but most of that is unrelated to domain names. It will also offer Neustar’s marketing and security services.

It will be headed by current Neustar CEO Lisa Hook. CFO Paul Lalljie will bravely take the helm of the (probably) sinking Neustar ship.

The split is expected to take a year to implement.

Burr to replace Tonkin on ICANN board

Kevin Murphy, April 19, 2016, Domain Policy

ICANN lifer Becky Burr is to replace Bruce Tonkin on the ICANN board of directors when his term expires in November.

She’ll take the seat reserved for the Contracted Parties House of the Generic Names Supporting Organization, following a vote by registries and registrars a few weeks ago.

Tonkin, CTO of Aussie registrar Melbourne IT, has held the seat for the last nine years. He’s limited to three consecutive three-year terms under ICANN bylaws.

Burr, a lawyer by trade, is currently chief privacy officer at TLD registry Neustar, a position she has held since 2012.

Before that, she was a partner at the law firm Wilmer Hale.

But way back in 1998, in a senior role at the US National Telecommunications and Information Administration, she was one of the key people responsible for ICANN’s creation under the Clinton administration.

Kinderis calls on industry to cut the bullshit

Kevin Murphy, January 14, 2016, Domain Policy

Domain Name Association chair Adrian Kinderis has called for the industry to “grow up”.

The former ARI CEO, now Neustar veep, said Monday it’s time for the industry to kick out the handful of bad actors that ruin its reputation, and to quit the “bullshit bickering” about which TLDs are best.

“For far too long this industry has turned a blind eye to the less than scrupulous activities,” he said, “and these activities have plagued this industry. Bad actors have tarnished the perception of this industry.”

“This may have been acceptable when it was a few insiders first grasping at a fledgling product in the early nineties but… we are now front and center of the internet,” he said.

“These practices of a few bad actors have led to the frustration of consumers. We have not served the best interests of our consumers at all times,” he said. “This has to change.”

He was speaking to an audience of registries, registrars and investors at the opening session of the NamesCon conference in Las Vegas on Monday.

It was a fairly standard DNA sales pitch, the kind Kinderis has given before, but few could deny the truth of his remarks.

He called upon the industry to more effectively self-regulate, working with ICANN, to keep the boogeymen of government legislators and law enforcement agencies at bay.

“It’s time to grow up and show that we can regulates ourselves and build a strong sustainable industry with integrity,” he said.

He also called for unity among industry participants, pointing out that the threats to their businesses are external to the domain industry.

“The domain name war must be over,” he said. “The infighting and bullshit bickering has to stop. The .coms, the not-.coms, the IDNs, the g’s versus the cc’s… this must stop.”

“As an industry we have been very lucky. We’ve stumbled through 20 years without a collective strategy nor cohesion,” he said. “Outside forces have not had a massive impact on us, yet. QR codes have tried. Apps are trying.”

He pointed to the recent positive “bump” that many domain companies have experienced as a result of investment from China, but attributed to “dumb luck” rather than the result of any smart marketing or outreach.

The 10-minute speech can be viewed below or on the NamePros YouTube channel.

Neustar shoots the corpse of .kids.us

Kevin Murphy, September 10, 2015, Domain Registries

The ill-conceived, barely used .kids.us domain is to stay dead, Neustar confirmed last night.

The .us registry operator said that its Stakeholder Council met August 17 and:

carefully considered the report on the kids.us domain and unanimously recommended that the requirement be suspended for the life of the .us contract.

Neustar had been forced into making a call about reintroducing .kids.us by its current .us contract, which it signed in March 2014.

One October 2014 expert report and May 2015 comment period later, and the decision has been made to keep the idea suspended.

.kids.us was introduced via US legislation as a way to make politicians look like they were doing something create a friendly space for the under 13s.

But the zone wound up with reg numbers that make new gTLDs look popular, so the decision was made in 2012 to kill it off.

Neustar’s .us contract lasts another two to four years, and that’s how long the suspension will last, at least.