Facebook gunning for Web.com in latest $27 million-plus cybersquatting lawsuit

Facebook has sued what it believes is a Web.com subsidiary, claiming the company has been engaged in wholesale cybersquatting for well over a decade.

The complaint, filed in a Pennsylvania District Court, alleges that New Venture Services Corp current owns 74 domains, and has previously owned 204 more, that infringe its Facebook, Instagram and WhatsApp trademarks.

While no other named defendants are listed, the complaint makes it abundantly clear that it believes NVSC is a subsidiary of Web.com and a sister of Network Solutions, Register.com, SnapNames and Perfect Privacy.

Facebook is suing partly under the Anti-Cybersquatting Consumer Protection Act, allowing it to claim $100,000 damages per infringing domain, so we’re looking at a floor of $27.8 million of potential damages should the lawsuit be successful.

But it’s also looking for NVSC to hand over any profits it’s made from the domains in question, which are generally parked with ads and listed for sale via the SnapNames network for premium fees.

While NVSC is registered in the British Virgin Islands and uses a Pennsylvania post office box as its mailing address, there’s a wealth of evidence going back to 2007 that it’s been affiliated first with NetSol and then Web.com.

Web.com’s last regulatory filing before it went private in 2017 lists NVSC as a subsidiary, which is probably the most compelling piece of evidence establishing ownership.

It appears that NVSC is a shell company that Web.com uses to hold potentially valuable or traffic-rich domains that its customers have allowed to expire. The names are then parked and put up for resale.

Example domains listed in the complaint include httpinstagram.com, faceebbok.com, facebooc.net, instagram-login.com, and installwhatsapps.com.

One would have to assume these names were captured using a fully automated process; even a cursory human review would clock that they’re useful only to bad actors.

The lawsuit is the latest in Facebook’s crusade against mainstream registrars it believes are profiting by infringing its trademarks, which has already ensnared Namecheap a year ago and OnlineNIC in October 2019.

Namecheap recently filed a counterclaim in which it tries to get some of Facebook’s trademarks cancelled.

Facebook has all but admitted that putting legal pressure on registrars is part of its strategy when it comes to getting the policies it wants out of ICANN on privacy and Whois access, where there’s currently an impasse.

Here’s the complaint (pdf).

Registrar giant created as Web.com merged with Endurance

Clearlake Capital Group, which has taken Endurance International private and recently took a big stake in Web.com, has merged the two registrar stables to create a new company it’s calling Newfold Digital.

By my reckoning, Newfold has probably become the second-largest registrar group by domains under management, with around 16.5 million gTLD names across just its best-known half-dozen brands, leapfrogging Namecheap and Tucows in the registrar league table.

That number’s probably a big understatement. It doesn’t capture ccTLDs and does not take into account that the company now has hundreds of active ICANN accredited registrars, largely due to Web.com’s drop-catching business.

Its best-known registrar brands are Register.com, Network Solutions, Domain.com, BuyDomains, BigRock, PublicDomainRegistry and CrazyDomains. Its BlueHost and HostGator brands are both pretty big deals in web hosting.

Clearlake says Newfold has 6.7 million customers worldwide.

The privatization of Endurance, which sees it delisted from the Nasdaq stock exchange, was announced in November and cost Clearlake $3 billion. The value of its Web.com stake, which it acquired last month, was not disclosed.

Siris Capital, which bought Web.com in 2018, continues to have a stake.

Newfold will be led by two Web.com execs — CEO Sharon Rowlands and CFO Christina Clohecy.

The deal follows Web.com’s unsuccessful attempt to buy Webcentral last year.

There’s no word on (presumably inevitable) layoffs as the two companies come together.

Web.com acquires Kiwi registrar Freeparking

Web.com has acquired what it calls New Zealand’s largest registrar, Freeparking.

Freeparking, not to be confused with other registrars of the same name, was part of the Umbrellar Group of web services companies.

According to Web.com, its new buy has 90,000 unique customers under management.

The company, which also owns the likes of Register.com and Network Solutions, said the acquisition is part of its strategy to expand in the Asia-Pacific region.

Freeparking also owns the Open Host, Domains4less and Discount Domains brand registrars. It also appears to be a Tucows reseller.

No financial details of the deal were announced. Web.com was taken private two years ago by private equity firm Siris Capital.

Webcentral rejects Web.com buyout bid for LOWER offer from Aussie telco

Pioneering registrar Webcentral has turned down Web.com’s offer to acquire it in favor of a lower offer from telecommunications company 5G Networks.

The company announced this week that 5GN will pay one share for ever 12 shares of Webcentral, which works to to between AUD 18.7 million and AUD 19.5 million ($14.24), depending on which trailing average price you use.

That’s between AUD 0.153 and AUD 0.16 per share, compared to Web.com’s recently increased bid of AUD 0.18 per share.

It’s a 138% premium based on 5GN’s September 16 closing price and Webcentral’s closing price before the Web.com deal was announced two months ago.

So why take the lower offer? Webcentral offered a few reasons, the most compelling of which was that there seems to have been a certain amount of arm-twisting going on.

The Web.com deal would have required 75% of Webcentral’s shares to be voted in favor of the acquisition and 5GN already owned over 10% and said it would vote them against. The 5GN deal only requires it to acquire 50.1% of the shares.

5GN will also pay off Webcentral’s debts and pay Web.com the AUD 500,000 penalty incurred for breaking the original July deal.

Webcentral was previously known as ARQ Group and, as one of the original five ICANN=accredited registrars, Melbourne IT. It owns the registrars Netregistry and Domainz. it became Webcentral after selling its wholesale business to CentralNic and its enterprise unit to private equity.

5GN, despite the name, is a largely wire-based telco and hosting provider. It doesn’t currently own any registrars.

Web.com acquires another of the original five registrars

Consolidation in the domain industry continues apace, with Web.com bringing one of the remaining original five competitive registrars into its stable for AUD 12.2 million ($8.3 million) in cash.

It’s acquiring an Australian company called Webcentral Group, which until last month was known as ARQ Group and before that as Melbourne IT.

Webcentral also runs the retail registrars Netregistry and, in New Zealand, Domainz. It has about 330,000 customers, though not all are registrants.

Web.com says the deal gives it a deeper footprint in the Aussie, Kiwi and Southeast Asian markets.

My records show that Webcentral had about 130,000 domains under management at the end of March on its Melbourne IT tag, down by about 6,000 year over year. That’s not counting regs in ccTLDs such as .au.

Netregistry had another 113,000 gTLD domains, down from 129,000 a year earlier.

After the deal closes, Web.com will own the three oldest active registrars as measured by IANA ID — Network Solutions, Register.com and now Melbourne IT. The latter two were among the first five to go live after ICANN introduced competition at the registrar level in 1999.

For Webcentral, the deal marks the conclusion of a three-stage sell-off that started over a year ago when it sold its TPP Wholesale business to UK consolidator CentralNic.

Then, this February, it announced the sale of its enterprise unit to private equity for AUD 36 million ($25 million). It had been publicly looking for a buyer for its remaining SMB registrar business for many months.

The root cause of the sell-offs appears to be the company’s crippling debt.

Webcentral had expected to be hit unfavorably by the coronavirus pandemic, but that was largely due to its exposure to the digital marketing market, via its WME brand, rather than dwindling domain sales.

GoDaddy blamed the same problem for its recently announced layoffs.

Webcentral is currently listed on the Australian Stock Exchange. Web.com itself fell into private equity hands in a $2 billion deal in 2018.

Web.com is kicking out a racist web site. How long before it winds up at Epik?

An American news site for white nationalists says it’s been given its goose-stepping orders by Web.com unit Network Solutions, and it’s looking for a new registrar.

VDare, named after Virginia Dare, a semi-mythological American folk hero, has been publishing anti-immigration material on vdare.com under NetSol’s wing for 20 years, but the site claims the registrar has given it 10 days, until June 25, to GTFO.

According to the site, NetSol told VDare that it was in violation of its acceptable use policy and “we consider your continued use of our services a serious issue and risk to our business and corporate reputation”.

That seems plausible, given how corporate America is currently bending over backwards to prove that they support the Black Lives Matter movement.

The move seems to have come due to pressure from the Lawyers’ Committee for Civil Rights Under Law, a campaigning group that persuaded NetSol to dump racist forum Stormfront as a customer a few years ago (it found its new home at Tucows).

The Committee has reportedly written to NetSol twice recently, urging the company to cut Vdare loose.

Vdare says it’s looking for a new registrar, but has also obtained a .onion domain in case it needs to retreat to the “Dark Web”. The .onion space is only accessible to users of the Tor browser.

Anyone care to place a bet on how long it will be before vdare.com winds up at Epik?

Web.com got pwned

Web.com, which owns top 20 registrars Network Solutions and Register.com, got itself and millions of its customers hacked a few months ago.
The company disclosed last week that malicious hackers broke into its network in late August, making off with customer account information.
The attack was not discovered until October 16.
The compromised data included “name, address, phone numbers, email address and information about the services that we offer to a given account holder”, Web.com said.
“We encrypt credit card numbers and no credit card data was compromised as a result of this incident,” it added.
Customers are being told to change their password next time they log in to their services.
It’s not clear how many registrants were affected. The NetSol accreditation has over seven million domains in the gTLDs alone, while Register.com has almost 1.8 million.
Web.com said it brought on a private security firm to investigate the attack, and informed US law enforcement.

Operation September Thrust leads to another million-domain Radix gTLD

Radix has become the first new gTLD portfolio registry to hit over one million domains in more than one TLD.
It said today that .site has crossed the seven-digit threshold, joining .online, which hit a million names in 2018.
It’s huge recent growth for .site, which had around 561,000 domains under management at the end of September.
Radix CEO Sandeep Ramchandani told DI today that the rapid uptick comes as a result of a marketing program internally code-named “September Thrust”.
This involved promotional pricing — Ramchandani said the cheapest a .site could have been obtained would be about $0.99 — and joint-marketing efforts with multiple registrars.
This mostly involved plugs on registrar home pages, email shots, and promotion in the “check availability” part of registrar storefronts, he said.
The latest transaction reports filed with ICANN show .site grew by about 120,000 DUM in October, with West.cn, NameCheap and Network Solutions (Web.com) the biggest beneficiaries.
NetSol’s .site DUM actually grew by about 10x in the month.
The $1 retail pricing was apparently available at some registrars prior to September, and continues to exist on storefronts today.

Wix.com obtains ICANN accreditation — bad news for Web.com?

Web site building tools provider Wix.com has got itself an ICANN accreditation, potentially bad news for current partner Web.com.
The Nasdaq-listed, Israel-based company popped up on the official registrar list in the last day or so with the IANA ID 3817.
That means it could before long start selling gTLD domains directly from the registries rather than going through its current business partner.
According to its domain services agreement and other online sources, Wix currently acts as a reseller for Network Solutions, a Web.com company.
Its retail prices are therefore, as you might expect, rather above the market average, pretty much in line with NetSol’s.
If it does choose to go solo, it could potentially pass on savings to its customers, or just pocket higher margins on domain sales.
While Wix says it has 110 million users, obviously it has sold nowhere near that number of domains.
Its relationship with NetSol is not lucrative enough for Web.com to count the relationship as a risk factor in its Securities and Exchange Commission filings, though Wix is listed as one of just a small handful of competitors.
If Web.com should lose Wix as a reseller, we won’t get to find out what impact that had on revenue; Web.com’s going private in a $2 billion deal.
Disclosure: I’ve had to listen to or skip through repetitive Wix ads on YouTube a dozen times a day for what seems like years, so I’m not naturally predisposed to like this company. Same goes for Grammarly. Grrrr!

Web.com to be acquired for $2 billion

Web.com is to go private in a deal valued at roughly $2 billion.
The company, which owns pioneering registrars Network Solutions and Register.com as well as SnapNames and half of NameJet, will be bought by an affiliate of Siris Capital Group, a private equity firm.
The cash, $25-a-share deal has been approved by the Web.com board but is still open to higher bids from third parties until August 5.
The offer is a 30% premium over Web.com’s 90-day average price prior to the deal’s announcement.
While Nasdaq-listed Web.com has briefly topped $26 over the last year, you’d have to go back five years to find it consistently over the $25 mark.