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Tucows and Namecheap exit $14m .online deal

Tucows and Namecheap have both pulled out of their joint venture with Radix to run the .online registry.

Tucows revealed the move, which will see Radix run .online solo, in a press release yesterday.

Both Tucows and Namecheap are registrars, whereas Radix is pretty much focused on being a registry nowadays.

While financial terms have not been disclosed, Tucows CEO Elliot Noss had previously said that each of the three companies had funded the new venture to the tune of $4 million to $5 million.

I estimate that this puts the total investment in the deal — which includes the price of winning .online at auction — at $13 million to $14 million.

Noss has also hinted that the gTLD sold for much more than the $6.8 million paid for .tech.

.online has not yet been delegated.

Noss hints at winning .online auction bid

Kevin Murphy, November 13, 2014, Domain Registries

A triumvirate of domain name companies led by Radix paid well over $7 million for the .online new gTLD, judging by comments made by Tucows CEO in an analysts call yesterday.

As the company reported its third-quarter financial numbers, Noss said of .online, which was recently auctioned:

While we are bound by confidentiality with respect to the value of the transaction, we can point to amounts paid in other gTLDs’ auctions in the public domain — like $6.8 million for .tech, $5.6 million for .realty, or the $4.6 million that Amazon paid for .buy — and let you decide what you think .online should be valued, relative to those more narrowly targeted extensions.

Radix won the private auction with financial backing from Tucows and NameCheap.

The three companies intend to set up a new joint venture to manage the .online registry, as we reported yesterday, with each company contributing between $4 million and $5 million.

Assuming at least one company is contributing $4 million and at least one is contributing $5 million, that works out to a total of $13 million to $14 million, earmarked for the auction and seed funding for the new venture.

Based on that knowledge, an assumption that the new company will want a couple of million to launch, and Noss’s comments yesterday, I’d peg the .online sale price in the $10-12 million range.

Radix business head Sandeep Ramchamdani told us yesterday that the company plans to market .online with some “hi-decibel advertising” and participation in events such as Disrupt and South by Southwest.

Are Whois email checks doing more harm than good?

“Tens of thousands” of web sites are going dark due to ICANN’s new email verification requirements and registrars are demanding to know how this sacrifice is helping solve crimes.

These claims and demands were made in meetings between registrars and ICANN’s board and management at the ICANN 49 meeting in Singapore last week.

Go Daddy director of policy planning James Bladel and Tucows CEO Elliot Noss questioned the benefit of the 2013 Registrar Accreditation Agreement during a Tuesday session.

The 2013 RAA requires registrars to verify that registrants’ email addresses are accurate. If registrants do not respond to verification emails within 15 days, their domains are turned off.

There have been many news stories and blog posts recounting how legitimate webmasters found their sites gone dark due to an overlooked verification email.

Just looking at my Twitter stream for an “icann” search, I see several complaints about the process every week, made by registrants whose web sites and email accounts have disappeared.

Noss told the ICANN board that the requirement has created a “demonstrable burden” for registrants.

“If you cared to hear operationally you would hear about tens and hundreds of thousands of terrible stories that are happening to legitimate businesses and individuals,” he said.

Noss told DI today that Tucows is currently compiling some statistics to illustrate the scale of the problem, but it’s not yet clear what the company plans to do with the data.

At the Singapore meeting, he asked ICANN to go to the law enforcement agencies that demanded Whois verification in the first place to ask for data showing that the new rules are also doing some good.

“What crime has been forestalled?” he said. “What issues around fraud? We heard about pedophilia regularly from law enforcement. What has any of this done to create benefits in that direction?”

Registrars have a renewed concern about this now because there are moves afoot in other fora, such as the group working on new rules for privacy and proxy services, for even greater Whois verification.

Bladel pointed to an exchange at the ICANN meeting in Durban last July, during which ICANN CEO Fadi Chehade suggested that ICANN would not entertain requests for more Whois verification until law enforcement had demonstrated that the 2013 RAA requirements had had benefits.

The exact Chehade line, from the Durban public forum transcript, was:

law enforcement, before they ask for more, we put them on notice that they need to tell us what was the impact of what we did for them already, which had costs on the implementers.

Quoted back to himself, in Singapore Chehade told Bladel: “It will be done by London.”

Speaking at greater length, director Mike Silber said:

What I cannot do is force law enforcement to give us anything. But I think what we can do is press the point home with law enforcement that if they want more, and if they want greater compliance and if they want greater collaborations, it would be very useful to show the people going through the exercise what benefits law enforcement are receiving from it.

So will law enforcement agencies be able to come up with any hard data by London, just a few months from now?

It seems unlikely to me. The 2013 RAA requirements only came into force in January, so the impact on the overall cleanliness of the various Whois databases is likely to be slim so far.

I also wonder whether law enforcement agencies track the accuracy of Whois in any meaningfully quantitative way. Anecdotes and color may not cut the mustard.

But it does seem likely that the registrars are going to have data to back up their side of the argument — customer service logs, verification email response rates and so forth — by London.

They want the 2013 RAA Whois verification rules rethought and removed from the contract and the ICANN board so far seems fairly responsive to their concerns.

Law enforcement may be about to find itself on the back foot in this long-running debate.

TLDH raises $33.6m to fight new gTLD auctions

Kevin Murphy, January 31, 2014, Domain Registries

Top Level Domain Holdings has raised £21 million with an institutional investor share placement to help it win some new gTLD contention set auctions.

Its total war chest following the $33.6 million-ish placement will be about $63 million, albeit with $15 million of that earmarked for a single, as-yet-unspecified auction.

The company is currently in 43 contention sets, most of which it apparently wants to resolve via private auction. TLDH said in a statement:

The Company believes private auctions provide a significant opportunity for the Company both to increase the number of high-value gTLDs within its portfolio and to generate cash from those gTLDs which it chooses to relinquish. Under the private auction process, the winning bid is divided equally and paid to the losing applicants net of the auctioneer’s fees.

As part of TLDH’s transition from a revenue-free penny stock to a trading company, it’s going to change its name to Minds + Machines Limited, via a reverse takeover of its subsidiary of the same name.

The company said the move will help with “stakeholder communications and branding”.

Finally, TLDH said that founding director Guy Elliott is to leave its board of directors and be replaced by new non-executive director Elliot Noss. Noss is of course CEO of rival registry/registrar Tucows.

Tucows takes over as Cheapies loses accreditation

Kevin Murphy, November 8, 2013, Domain Registrars

ICANN has terminated the registrar Cheapies.com and is to transfer its registrations to Tucows.

Cheapies had fewer than 12,000 gTLD domains under management judging by the last available registry reports.

The registrar was terminated two weeks ago, having previously having its accreditation suspended for 90 days, for various violations of the Registrar Accreditation Agreement mainly related to records keeping.

ICANN said Cheapies’ customers should receive an email from Tucows instructing them how to proceed.