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Donuts loses five of the first six new gTLD auctions

Kevin Murphy, June 13, 2013, Domain Services

The full results of the first six new gTLD auctions are now known. Donuts lost five of them, raising millions of dollars in the process.

Here are the winners of last week’s auctions, which were managed by Innovative Auctions:

Five of the six were a two-way battles between Donuts, which has applied for 307 gTLDs, and one other applicant. Each of the losing applicants has now withdrawn its application with ICANN.

The exception is .club, a three-way fight that included Merchant Law Group. Neither losing application has been withdrawn with ICANN yet, but the result it well-known.

Innovative revealed last week that the round raised $9.01 million in total. The winning bids for each auction were not disclosed.

Given that Donuts managed to lose five out of the six, it’s a fairly safe assumption that most of that money will have gone into its war chest, which can be used in future auctions.

Of the five applications it has now withdrawn, only .red had already passed its Initial Evaluation, so the company will have also clawed back a $130,000 ICANN refund on each of the other four.

The auctions mean that we now know with a high degree of certainty which companies are going to be running these six gTLDs.

Most of them have not yet passed IE, but with the success rate so high to date I wouldn’t expect to see any failures. None of them are subject to objections or direct GAC Advice.

Six private new gTLD auctions raise $9m

We now know (roughly) how much a new gTLD is worth.

The new gTLD contention sets for .club, .college, .luxury, .photography, .red, and .vote have been settled in a series of auctions this week that raised over $9 million.

That’s an average price of $1.5 million per string.

Writing on CircleID, Innovative Auctions project director Sheel Mohnot confirmed that the withdrawal of Donuts’ application for .vote was a result of losing the auction.

We also already know that .CLUB Domains won its auction.

But Mohnot did not reveal the winners of the other four auctions, each of which was a two-way fight between Donuts and one rival. ICANN’s web site does not yet reflect any other withdrawals.

His article does, however, quote Top Level Design and Luxury Holdings, which applied for .photography and .luxury respectively, as saying they were happy with the outcome.

Assuming they won too (which is of course not certain) that would mean Donuts lost at least four of the six auctions.

Donuts had originally submitted 63 strings to auction, but they could of course only go ahead if all of its competitors agreed to participate.

One wonders if the company submitted its lowest-value strings first in order to build up its war chest for future auctions. A good chunk of the $9 million raised will have flowed straight into its coffers.

Donuts withdraws its .vote bid, raising questions about new gTLD auctions

One down, only 306 to go! Donuts has withdrawn its application for the .vote new gTLD, leaving an Afilias joint venture as the sole remaining applicant, it emerged today.

It’s reasonable to assume that this is the first result of the private string auctions, designed by Cramton Associates, that are being run by Innovative Auctions this week.

Donuts had submitted .vote to this auction and has previously said that auctions were its preferred method of resolving contention sets.

Either way, the winner of the contention set is Monolith Registry, a joint venture of .info registry Afilias and two individual investors based in Utah.

Monolith is also the only applicant for the Spanish translation, .voto.

It’s the first example of a contention set between competing business models being resolved.

The result tells us a lot about how money talks in the new gTLD program and how it does not evaluate applications based on criteria such as inclusiveness or innovation.

Donuts had proposed a .vote with an open registration policy and no special purpose. People would have been able to register domains there for essentially any reason.

Afilias, on the other hand, intends to tightly restrict its .vote to “official and verified governments and office seekers” in only the United States.

Remarkably, it has the same US-only policy for the Spanish-language .voto, though both applications suggest that eligibility will be expanded to other countries in future.

Cybersquatting is not infrequent in electioneering, so .vote could give voters a way to trust that the web site they visit really does contain the opinions of the candidate.

Pricing is expected to be set at $60 “for the first year” ($100 for .voto), and Afilias reckons there are upwards of one million elected officials and candidates that would qualify for the names in the US alone.

It’s a potentially lucrative business, in other words.

But did the program produce an ideal result here?

Is it better that .vote carries a high price and will be restricted to American politicians? Is it right that other, non-governmental types of voting will be excluded from the TLD?

Or does the result show that the program can produce innovative uses of TLDs? With a couple of restricted namespaces, where voters and politicians can trust the authenticity of the contents (insert politicians-are-liars joke here) is Afilias adding value to the internet?

These types of questions are going to be asked over and over again as more contention set results emerge.