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Verisign wants to auction off O.com for charity

Kevin Murphy, December 1, 2017, Domain Registries

The internet could soon gets just its fourth active single-character .com domain name, after Verisign revealed plans to auction off o.com for charity.

The company has asked ICANN to allow it to release just one of the 23 remaining one-letter .com domains, which are currently reserved under the terms of the .com registry agreement.

It’s basically a proof of concept that would lead to this contractual restriction being lifted entirely.

O.com has been picked as the guinea pig, because of “long-standing interest” in the domain, according to Verisign.

Overstock.com, the $1.8 billion-a-year US retailer, is known to have huge interest in the name.

The company acquired o.co from .CO Internet for $350,000 during the ccTLD’s 2010 relaunch, then embarked upon a disastrous rebranding campaign that ended when the company estimated it was losing 61% of its type-in traffic to o.com.

Overstock has obsessed over its unobtainable prize for over a decade and would almost certainly be involved in any auction for the domain.

In fact, I wouldn’t be surprised to discover that Overstock pressured Verisign into requesting the release of o.com.

Despite the seven or eight figures that a single-letter .com domain could fetch, Verisign’s cut of the auction proceeds would be just $7.85, its base registry fee.

Regardless, it has a payment schedule in mind that would see the winning bidder continue to pay premium renewal fees for 25 years, eventually doubling the sale price.

The winner would pay their winning bid immediately and get a five-year registration, but then would have to pay 5% of that bid to renew the domain for years six through 25.

In other words, if the winning bid was $1 million, the annual renewal fee after the first five years would be $50,000 and the total amount paid would eventually be $2 million.

All of this money, apart from the auction provider’s cut, would go to a trust that would distribute the funds to internet-focused non-profit organizations, such as those promoting security or open protocols.

There’s also a clause that would seem to discourage domain investors from bidding. The only way to transfer the domain would be if the buyer was acquired entirely, though this could be presumably circumvented with the use of a shell company.

It’s an elaborate auction plan, befitting of the fact that one-character .com domains are super rare.

Only x.com, q.com and z.com are currently registered and it’s Verisign policy to reserve them in the unlikely event they should ever expire.

Billionaire entrepreneur Elon Musk this July reacquired x.com, the domain he used to launch PayPal in the 1990s, back from PayPal for an undisclosed sum.

Z.com was acquired by GMO Internet for $6.8 million in 2014.

Single-character domains are typically not reserved in the ICANN contracts of other gTLDs, whether pre- or post-2012, though it’s standard practice for the registry to reserve them for auction anyway.

Verisign’s reservations in .com and .net are a legacy of IANA policy, pre-ICANN and have been generally considered technically unnecessary for some years.

Still, there’s been a reluctance to simply hand Verisign, already a money-printing machine through accident of history, another windfall of potentially hundreds of millions of dollars by allowing it to sell off the names for profit. Hence the elaborate plan with the O.com trust fund.

The proposal to release O.com requires a contractual amendment, so Verisign has filed a Registry Services Evaluation Process request (pdf) with ICANN that is now open for public comment.

As a matter of disclosure: several years ago I briefly provided some consulting/writing services to a third party in support of the Verisign and Overstock positions on the release of single-character domain names, but I have no current financial interest in the matter.

O.co loses 61% of its traffic to O.com

Overstock.com’s decision to rebrand itself O.co had a disastrous effect on the internet retailer’s traffic, according to its CEO.

Patrick Byrne told financial analysts yesterday that “O.co was my bad call” and that “about eight out of 13 people who were trying to visit us through O.co, eight were typing O.com”

It’s not clear what the source of the data is, or why the measurement given was out of 13, but it works out to 61%.

Byrne noted that people may have typed o.co instead after figuring out that o.com doesn’t work – it’s currently reserved, alongside most other single-letter .com domains, by Verisign.

His comments came as Overstock reported 2011 revenue down 3% to $1.05 billion and fourth-quarter revenue down 10% to $314 million.

Byrne said on a conference call with analysts:

There were some bad decisions for which I take responsibility in marketing O.co. O.co was odd in that it worked on one level. It did get out there into people’s heads, but what we discovered, and we turned it up slowly and we actually had nice adoption from the beginning of last year, gradually people shifting to O.co and then, but we got into the Christmas season and it worked terribly for people who were not familiar with us. There was a tremendous amount of traffic diverting to O.com and I think we’ve figured out that it was about eight out of 13 people who were trying to visit us through O.co, eight were typing O.com. Now some of them may have come, trying anyway.

The company bought o.co from registry .CO Internet for $350,000 in July 2010, during the .co relaunch. It later said it would rebrand the company on its new domain.

It even bought the naming rights to the Oakland Coliseum, which is now known as the O.co Coliseum.

Until quite recently, Overstock was an important .CO Internet reference customer. Now, I’m guessing, not so much.

Overstock has “slowed” its rebranding, reverting to referring to o.co as a “shortcut” rather than its primary address, which remains overstock.com.

The company bought o.info last year and this week launched the site as an information portal for its products. It also operates o.biz as a business-to-business site.

Overstock.com slows down O.co rebranding

Kevin Murphy, November 14, 2011, Domain Registries

Overstock.com is throttling its transition to the O.co brand after discovering consumers typed o.com even after watching the company’s commercials, according to a report.

The company’s $350,000 purchase of and subsequent rebranding around the o.co domain was possibly the single biggest single marketing coup for .CO Internet, the .co registry, to date.

But now it intends to keep the Overstock.com brand in the US for the time being, while using O.co overseas and on a new iPad app, according to a report in AdAge.

The O.co Coliseum, the stadium in Oakland for which Overstock bought the naming rights, will continue to bear the O.co name.

AdAge quoted Overstock president Jonathon Johnson saying that “a good portion” of people viewing its commercials tried to visit o.com, which is a non-resolving registry-reserved name, instead.

“We were going too fast and people were confused, which told us we didn’t do a good job,” he told AdAge. “We’re still focused on getting to O.co, just at a slower pace… We’re not flipping back, we’re just refocusing.”

This is obviously bad news for commercial new top-level domain applicants, many of which will be looking for all-important anchor tenants to validate their brands at launch.

Marketing people like to refer to the measurable results of others before pulling the trigger on new initiatives. The O.co case is unlikely to create enthusiasm for new TLDs.

On the other hand, it’s commonly believed that when it comes to breaking the .com mindset in the US, it will take more than a trickle of new TLDs such as .co. It will take a flood.

.CO Internet has always taken the position that .co adoption will take time, and that the ICANN new gTLD program will help its cause by raising awareness of non-.com domains.

Overstock.com: a registry’s best friend

Kevin Murphy, September 21, 2011, Domain Registries

O.co, the company formerly known as Overstock.com, has bought the domain name o.info directly from registry manager Afilias for an undisclosed amount.

It’s the first single-character sale Afilias has announced since ICANN gave it the go-ahead to release one and two-letter names from reserved status in April 2010.

What makes it particularly interesting is that O.co has agreed to build a separate web site at o.info, using the domain for the purpose suggested by the TLD string.

The idea of allocating a valuable name to a big brand in exchange for a use commitment – the “founders program” model – is of course now a standard part of a TLD registry’s marketing toolkit.

It’s more unusual too see the same tactics used to promote a decade-old gTLD.

O.co CEO Patrick Byrne said in a statement:

We will use O.info as a website destination to consolidate useful consumer information. The .info domain is the logical destination for visitors to find product information, user manuals, buying guides, manufacturer and brand reviews, video demonstrations and recall notices.

The price has not been disclosed. It could easily be in the six-figures, extrapolating from the $350,000 the company dropped on o.co last year.

On the other hand, it could be lower.

I feel certain that .CO Internet would have handed over o.co for free if it had known how much great publicity it would bring; it’s possible Afilias may have sacrificed part of its windfall in the hope of reaping some marketing benefits too.

It has 25 more letters to sell, after all.

Overstock becomes .co’s anchor tenant from heaven

Overstock.com is to slap its new brand, O.co, on the Oakland Raiders stadium in California, bringing yet more exposure to the .co top-level domain.

The company bought the stadium naming rights back in April, and was pushed into the rebranding now because the sign needs to go up, according to AdAge.

Presumably, whenever American football fans tune into a broadcast or read the sports pages, they’re now going to be exposed to the .co brand.

Not many TLDs have that claim to fame. According to Wikipedia, the only other stadium in the US currently named after a domain is the Jobing.com Arena in Glendale, Arizona.

Overstock has been so good for .CO Internet’s marketing, it’s easy to forget that the company actually paid for the domain, splashing out $350,000 a year ago.

I’d hazard a guess that if the registry had known just how prolific the O.co brand would become, it would have given the name away for free.

Currently, the domain o.co redirects to overstock.com, but the site logo refers to “O.co, also known as Overstock.com”.

What O.co says about new TLDs

Kevin Murphy, January 21, 2011, Domain Registries

Overstock.com’s shock rebranding move yesterday is not only a big marketing coup for .CO Internet, it also may be good news for new top-level domains in general.

In a pair of US TV commercials (available here and here if you’re overseas) Overstock has started calling itself O.co, the domain it bought privately from the .co registry for $350,000 last July.

When I wrote, last November, “Overstock’s .com domain is its brand, and that’s not about to change”, I may well have been wrong. Go to overstock.com and look at the logo.

This is good evidence, if it were needed, that the very same trademark interests currently opposed to ICANN’s new TLDs program are also keenly aware of the benefits.

Overstock has had its eyes on O.com for over five years, and fought unsuccessfully within ICANN to have single-letter .com domains released from the VeriSign reserved list.

It was not until .co relaunched last summer – essentially a new TLD – that Overstock got the opportunity to register a domain (almost?) as good as the one it wanted.

I find this interesting because Overstock, like many other major brand owners, has been a vocal opponent of new TLDs.

In a July 2009 letter to ICANN (pdf), for example, Overstock expresses many of the same views about new TLDs that are still being expressed by the trademark interests currently holding up the program.

I’m not suggesting that Overstock’s eagerness to use O.co negates its specific criticisms of the new TLDs program, but its conflicting behavior does seem to suggest a certain degree of cognitive dissonance.

On the one hand, it opposed new TLDs. But when a new TLD launched, it grasped the opportunity with both hands and rebranded the whole company around it.

If what I hear is true, many of the companies publicly opposed to new TLDs are also the ones simultaneously investigating their own “.brand” domains.

Could Overstock’s latest move represent a pent-up demand for new TLDs among big brands? What does that mean for the future of .com as the internet’s premium real estate?

What does the Overstock commercial mean for .co?

Kevin Murphy, November 5, 2010, Domain Registries

Judging by the number of exclamation marks being deployed over on the .CO Internet blog today, it’s a fairly safe bet that the company is rather happy with Overstock.com’s latest TV commercial.

It’s the first high-profile commercial to feature a .co domain, in this case o.co, which could go some way to raise the newly relaunched TLD’s profile in the US.

While it’s a nice first step for .CO, I wouldn’t say its TLD has necessarily “arrived” yet, on the basis of this ad, for a few reasons.

First, what’s this “shortcut” business?

Overstock.com commercial

Should this be troubling?

The biggest marketing coups .CO has inked to date have been for x.co and t.co, URL shorteners offered by Go Daddy and Twitter respectively. Now, Overstock is using its o.co as a “shortcut”, which bounces visitors to overstock.com.

True, Overstock’s .com domain is its brand, and that’s not about to change, but its use of o.co as a “shortcut” may perpetuate the short-term perception that .co’s primary purpose is short URLs.

On the upside, the company is actively encouraging customers to type a .co domain into their browsers.

Getting this “type-in awareness” is something I know that .CO Internet is looking to foster, something that the Twitter deal does not necessarily bring to the table.

It’s also encouraging that Overstock feels comfortable using a .co domain where it does not own the equivalent .com. That said, nobody does. Most single-letter .com domains are still reserved.

While this may be a branding risk for Overstock, could it actually be helpful for .CO, training fat-fingered users the difference between .com and .co domains? It seems possible.

It’s interesting to note that Overstock is using “www.” for its .co, but not for its .com, presumably in order to train viewers that “this is a URL”, much the same as .com domains were once uniformly advertised with the www prefix.

A reliable sign that .co has “arrived” would be when an advertiser feels happy to drop the www.