Latest news of the domain name industry

Recent Posts

Verisign facing its own activist investor

Kevin Murphy, April 29, 2016, Domain Registries

While new gTLD registries Rightside and Minds + Machines have faced board-room challenges by activist investors in recent months, it seems industry heavyweight Verisign is contended with a similar problem.

John Chevedden, once described as an “economy class” activist due to his relatively small stakes, is attempting to give smaller Verisign shareholders the ability to propose directors for the company’s board.

Rather than attempting to gut the companies he invests in, he tries to make the odd incision into their corporate governance in order to give smaller investors a greater voice in their companies.

He’s filed a proposal, which will be voted on at Verisign’s June 9 annual general meeting, for a new “proxy access” bylaw.

Essentially, the proposal would allow an unlimited number of shareholders who collectively own over 3% of the company’s stock to propose two people for director elections (or 25% of the board, whichever is greater).

But Verisign’s current board is recommending that shareholders vote against the proposal, saying it’s “unnecessary”.

The company says that it plans to introduce its own proxy access bylaw that would be slightly different.

The Verisign alternative would limit the size of the nominating gang to 20 shareholders. That would mean that each individual investor would have to own much larger stakes, in order to pass the 3% threshold and nominate director candidates.

Verisign says Chevedden’s proposal, which does not limit the number of small shareholders involved, would be expensive and unwieldy to manage.

Chevedden reportedly has quite a decent success rate with these kinds of proposals.

Verisign has great quarter but sees China growth slowing

Kevin Murphy, April 29, 2016, Domain Registries

Verisign beat its sales expectations in the first quarter of the year, but leadership said rapid growth from Chinese registrants will now “normalize”.

The .com/.net registry last night reported net income up 21% at $107 million, on revenue that was up 9.1% to $282 million.

That’s based primarily on it selling 2.65 million net new .com/.net names during the quarter, at 7.1% increase on the Q1 2014 level baseline. It said it sold 10 million new names in the quarter, up from 8.7 million a year ago.

For comparison, Q1 2015 saw 1.51 million net adds across the two TLDs. Three months ago, the company had predicted net adds to be 1.5 to 2 million names.

It had 142.5 million names at the end of the quarter, 126.6 million of which were .com.

CEO James Bidzos told analysts: “We again saw activity coming from registrars in China that exceeded our expectations.”

However, he added: “At this point, we expect activity from registrars in China to normalize as we continue through the second quarter.”

When pressed, CFO George KIlguss elaborated (according to the SeekingAlpha earnings call transcript):

as we look at the trends, we’ve seen the demand that happened in the second half of the first quarter kind of ebb and flow. So we saw it come. It was pretty strong for a few weeks and then it came back to more than normalized path. So we don’t have a perfect crystal ball, but based on the trends that we’ve seen that we’ve been tracking, it seems to be back on the normalized path for that particular region, at least as what we’ve seen historically.

Verisign is currently negotiating for the renewal of its .com contract with ICANN, which may or may not enable it to raise its government-frozen registry prices in future.

Porn firm wins .cam after years of objections

Kevin Murphy, December 18, 2015, Domain Registries

The controversial new gTLD .cam has been won at auction by Dutch porn site operator AC Webconnecting, putting an end to over two years of back-and-forth objections.

Rival applicants Rightside and Famous Four Media both withdrew their applications earlier this week.

The contest for .cam was marked by several objections and appeals.

In 2013, Verisign filed and lost String Confusion Objections against AC Webconnecting and Famous Four, but won its near-identical objection against Rightside.

Verisign had claimed that .cam and .com are so similar-looking that confusion among internet users is bound to arise.

Because the SCO panels in the three cases returned differing opinions, Rightside was one of two applicants given the right to appeal by ICANN in October 2014.

I never quite understood why Verisign wasn’t also given the right to appeal.

Rightside won the right to stay in the .cam contention set almost a year later.

Despite all that effort, it did not prevail in the resulting auction.

Separately, back in 2013, AC Webconnecting filed and lost Legal Rights Objections against its two rivals, based on a “.cam” trademark it acquired purely for the purpose of fighting off new gTLD competitors.

I’d be lying if I said I knew a lot about the soon-to-be registry.

Based in Rotterdam, its web site comes across as a wholly safe-for-work web design firm.

However, it seems to be mainly in the business of operating scores, if not hundreds, of webcam-based porn sites.

Its application for .cam states that it will be for everyone with an interest in photography, however.

When it goes live, its most direct competitor is likely to be Famous Four’s .webcam, which already has an 18-month and 70,000-domain head start.

It remains to be seen whether its clear similarity to .com will in fact cause significant confusion.

It’s official: new gTLDs didn’t kill anyone

Kevin Murphy, December 2, 2015, Domain Tech

The introduction of new gTLDs posed no risk to human life.

That’s the conclusion of JAS Advisors, the consulting company that has been working with ICANN on the issue of DNS name collisions.

It is final report “Mitigating the Risk of DNS Namespace Collisions”, published last night, JAS described the response to the “controlled interruption” mechanism it designed as “annoyed but understanding and generally positive”.

New text added since the July first draft says: “ICANN has received fewer than 30 reports of disruptive collisions since the first delegation in October of 2013. None of these reports have reached the threshold of presenting a danger to human life.”

That’s a reference to Verisign’s June 2013 claim that name collisions could disrupt “life-supporting” systems such as those used by emergency response services.

Names collisions, you will recall, are scenarios in which a newly delegated TLD matches a string that it is already used widely on internal networks.

Such scenarios could (and have) led to problems such as system failure and DNS queries leaking on to the internet.

The applied-for gTLDs .corp and .home have been effectively banned, due to the vast numbers of organizations already using them.

All other gTLDs were obliged, following JAS recommendations, to redirect all non-existent domains to 127.0.53.53, an IP address chosen to put network administrators in mind of port 53, which is used by the DNS protocol.

As we reported a little over a year ago, many administrators responded swearily to some of the first collisions.

JAS says in its final report:

Over the past year, JAS has monitored technical support/discussion fora in search of posts related to controlled interruption and DNS namespace collisions. As expected, controlled interruption caused some instances of limited operational issues as collision circumstances were encountered with new gTLD delegations. While some system administrators expressed frustration at the difficulties, overall it appears that controlled interruption in many cases is having the hoped-for outcome. Additionally, in private communication with a number of firms impacted by controlled interruption, JAS would characterize the overall response as “annoyed but understanding and generally positive” – some even expressed appreciation as issues unknown to them were brought to their attention.

There are a number of other substantial additions to the report, largely focusing on types of use cases JAS believes are responsible for most name collision traffic.

Oftentimes, such as the random 10-character domains Google’s Chrome browser uses for configuration purposes, the collision has no ill effect. In other cases, the local system administrators were forced to remedy their software to avoid the collision.

The report also reveals that the domain name corp.com, which is owned by long-time ICANN volunteer Mikey O’Connor, receives a “staggering” 30 DNS queries every second.

That works out to almost a billion (946,728,000) queries per year, coming when a misconfigured system or inexperienced user attempts to visit a .corp domain name.

Verisign warns about Chinese .com boom

Kevin Murphy, November 24, 2015, Domain Registries

Verisign has warned investors that the current boom in .com sales is largely coming from Chinese domainers and may not be sustainable.

The company has added an unprecedented 4.1 million domain in .com and .net so far during the fourth quarter.

“While there continues to be demand for domain names globally, the recent increased volume for Verisign’s top level domains, as well as top level domains of other registries, during the fourth quarter is coming largely through registrars in China,” the company said in a Securities and Exchange Commission filing.

It listed several factors that are likely responsible for the sudden uptick, but warned that renewal rates are typically not great.

In the past, Verisign has discussed many factors that affect the demand for domain names, including, but not limited to economic, social, and regulatory conditions, Internet adoption, Internet penetration, and increasing e-commerce. In addition to these factors affecting demand, Verisign is also evaluating additional potential factors unique to China that may also be responsible for the recent increased volume of new registrations in China.

In no particular order, these potential factors, or combination of factors, could include, but may not be limited to, government initiatives in China to develop their online economy such as ‘Internet Plus;’ registry and registrar regulatory requirements; cultural influences such as the popularity of numeric domain names; increasing competition amongst Chinese registrars; potential increases in domain name investment activity; and recent capital markets volatility and access to capital in China.

Verisign cannot predict if or how long this increased pace of gross additions will continue and we cannot at this time predict what the renewal rate for these domain names will be. Verisign has noted in the past that renewal rates for domain names registered in emerging markets, such as China, have historically been lower than those registered in more developed markets.

It’s difficult to imagine that Chinese investors have managed to find four million unregistered domains worth keeping.

There are currently 123,497,852 domains in the .com zone file, according to Verisign’s web site.

Verisign is not the only registry that appears to be benefiting from a deluge of registrations from China.

XYZ.com has seen over 440,000 domains added to its .xyz zone file in the last three weeks, bringing its total to over 1.5 million, which appear to be largely coming through Chinese registrars.