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XYZ to rethink China gateway plans

Kevin Murphy, September 16, 2015, Domain Registries

XYZ.com has withdrawn its request to start selling .xyz and .college domains into China via a local gateway service provider.

The company has said it will amend and resubmit its plan to ICANN, which had told it the idea “might raise significant Stability or Security issues”.

The registry wants to be one of the first non-Chinese registries to be able to comply with government regulations, which require all domain firms to have an official license.

As we reported last week, it had signed up with local registrar ZDNS, which would proxy for registrations made by Chinese registrants.

However, it has now withdrawn its Registry Services Evaluation Process request after ICANN said it would have to refer it up the chain to a special technical committee for review.

XYZ said in a letter to ICANN:

We are withdrawing this request because our gateway model is changed since the submission of the registry request and so the request is no longer accurate. We will shortly submit a new registry request to cover the updated gateway model.

It’s not clear what the specific “security and stability” concerns were.

Did XYZ.com pay NetSol $3m to bloat .xyz?

Kevin Murphy, August 25, 2015, Domain Registries

Evidence of a possibly dodgy deal between XYZ.com and Network Solutions has emerged.

Court documents filed last week by Verisign suggest that the .xyz registry may have purchased $3 million in advertising in exchange for $3 million of .xyz domain names.

Verisign, which is suing .xyz and CEO Daniel Negari over its allegedly “false” advertising, submitted to the court a list of hundreds of exhibits (pdf) that it proposes to use at trial.

Among them are these two:

  • Email from Negari to Andrew Gorrin re EPP Feed and billing directly for $3,000,000 in domains
  • Credit Memo to Andrew from Negari “We have elected to pay for our $3MM Q2 advertising insertion order, which was dated May 20th with a credit…….” (5/31/14)

Gorrin is Web.com’s senior VP of marketing and Negari is Daniel Negari, XYZ.com’s CEO.

The documents these headings refer to are not public information, and are not likely to be any time soon, but they appear to refer to on the one hand XYZ billing NetSol for $3 million in domain names and on the other NetSol billing XYZ for $3 million in advertising.

Only one of the two document headings is dated, so we don’t know how closely they coincided.

Other headings, among the 446 documents Verisign wants to use at trial, suggest that they happened at pretty much the same time:

  • Email from Andrew Gorrin to Ashley Henning (web.com) re Bulk Purchase of .xyz domains (5/29/14)
  • Email from Andrew Gorrin to Negari re XYZ.Com Advertising IO and Marketing Agreement attaching signed agreements (5/20/14)
  • Email string Ashley Henning to Christine Nagey, Andrew Gorrin, Edward Angstadt re Bulk Purchase of .XYZ Domains (5/30/14)

The emails Verisign cites were dated May 2014, shortly before .xyz went into general availability June 2.

What we seem to be looking at here — and I’m getting into speculative territory here — are references to two more or less simultaneous transactions, both valued at exactly $3 million, between the two parties.

Both companies have consistently refused to address the nature of their deal, citing NDAs.

As you recall, the vast majority of .xyz’s early registrations were provided by NetSol, which pushed hundreds of thousands of free .xyz domains into its customers’ accounts without their explicit consent.

The number of freebies is believed to be about 350,000, based on comments Negari recently made to The Telegraph, in which he stated that .xyz, which had about 850,000 domains in its zone at the time, would have 500,000 registrations if the freebies were excluded.

With a registry fee roughly equivalent to .com’s (.xyz’s is believed to be a little lower), 350,000 names would work out to roughly $3 million.

Negari has stated previously that every .xyz registration was revenue-generating, even the freebies.

Is it possible that NetSol paid XYZ’s registry fees using money XYZ paid it for advertising? Is it possible no money changed hands at all?

I’m not saying either company has done anything illegal, and it’s completely possible I’m completely misunderstanding the situation, but it does rather put me in mind of the old “round-trip” deals that tech firms used to dishonestly prop up their tumbling revenue at the turn of the century.

Back in 2000, the dot-com bubble was on the verge of popping, taking the US economy with it, and companies facing the decline of their businesses came up with “creative” ways to show investors that they were still growing.

AOL Time Warner, for example, “effectively funded its own online advertising revenue by giving the counterparties the means to pay for advertising that they would not otherwise have purchased”.

Regulators exercised their legal options in these cases only where there appeared to be dishonest accounting, and I’ve seen no evidence to suggest that XYZ or Web.com unit NetSol have failed to adhere to anything but the highest accounting standards.

Again, I’m not saying we’re looking at a “round-trip” deal here, and there’s not a great deal of evidence to go on, but it sure smells familiar.

Certainly, questions have been raised that Verisign did not raise in its initial complaint.

Anyway.

On a personal note, I’d like to disclose that among the documents Verisign demanded from XYZ are dozens of pages of previously confidential emails exchanged between myself and Negari.

I’ve read them, and they’re mostly heated arguments about a) his refusal to give details about the NetSol deal and b) my purported lack of journalistic integrity whenever I published a post about .xyz with an even slightly negative angle.

XYZ had no choice but to supply these emails. I can’t blame it for complying with its legal requirements.

I wasn’t the only affected blogger. Mike Berkens, Konstantinos Zournas, Rick Schwartz and Morgan Linton also had their private correspondence compromised by Verisign.

I don’t know how they feel about this violation, but in my view this shows Verisign’s contempt for the media and its disregard for the sanctity of off-the-record conversations between reporters and their sources.

And that’s what I have to say about that.

After abc.xyz, will Google now switch to .google?

Kevin Murphy, August 12, 2015, Domain Registries

Google provided the new gTLD industry with one of its most prominent endorsements to date when it revealed this week that its new parent company, Alphabet, will use a .xyz domain name.

But it could just be the first move away from traditional TLDs such as .com — its new gTLD .google entered its “general availability” phase today.

Alphabet will be the holding company for Google the search engine provider, as well as many other subsidiaries focused on non-core areas of its business, and will replace Google as the publicly traded entity.

The new company will use abc.xyz as its primary domain.

XYZ.com CEO Daniel Negari told Wired that the move is “the ultimate validation”, and it’s hard to disagree.

Despite this, almost all the coverage in the tech and mainstream media over the last 24 hours has been about the fact that it does not own alphabet.com.

A Google News search for “alphabet.com” today returns over 67,000 results. Refine the search to include “abc.xyz” and you’re left with fewer than 2,700.

This is perhaps to be expected; BMW owns alphabet.com and has told the New York Times it does not intend to sell it. Journalists naturally gravitate towards conflict, or potential conflict.

Some reporters even suggested, with mind-boggling naivety, that Google hadn’t even done the most cursory research into its new brand before embarking on the biggest restructuring in its history as a public company.

But perhaps the reality is a little simpler: owning a .com that exactly matches your brand just isn’t that important any more.

If any company has insight into the truth of that hypothesis, it’s Google.

It should hardly be surprising that Google digs the possibilities offered by new gTLDs — remember, it applied for 101 strings and has 42 of them already delegated.

Its senior engineers have also blogged repeatedly that all gTLDs, including .com, are treated equally by its search algorithms.

Now that it has made the decision to brand its holding company on a new gTLD domain, could we expect it be similarly nonchalant about a switch to .google?

The dot-brand today came out of its pre-launch phase and entered “general availability”, meaning that the gTLD is now free for it to use.

The .google zone file only has a few domains in it at present, so we’re probably not going to see anything deployed there overnight, but I’d be surprised if we have to wait a long time before .google is put to use in one way or another.

The company set up a fleeting April Fool’s Day website at com.google earlier this year.

Google’s application for .google states:

The mission of the proposed gTLD, .google is to make the worldʹs information universally accessible and useful through the streamlined provision of Google services. The purpose of the proposed gTLD is to provide a dedicated Internet space in which Google can continue to innovate on its Internet offerings. The proposed gTLD will augment Googleʹs online presence in other registries, provide Google with greater ability to categorize its present online locations around the world, and in turn, deliver a more recognizable, branded, trusted web space to both the general Internet population and Google employees. It will also generate efficiencies and increase security by reducing Google’s current dependence on third-party infrastructure.

The company has also stated on its Google Registry web site that it intends to use .google, .youtube and .plus “for Google products”.

XYZ buys .security and .protection from Symantec

XYZ.com has added .security and .protection to its portfolio of new gTLDs under a private deal with security software maker Symantec.

Symantec originally applied for both as closed generics, but changed its plans when ICANN changed its tune about exclusive access gTLDs.

The company won .security in an auction against Donuts and Defender Security late last year; .protection was uncontested. It lost auctions for .cloud and .antivirus.

Symantec’s .symantec and .norton, both dot-brands, are currently in pre-delegation testing.

XYZ already owns .college, .rent and of course .xyz.

In other news, Afilias has acquired .promo, which was in PDT with applicant Play.Promo Oy, in a private auction.

UPDATE: A couple of hours after this post was published, XYZ announced it has also acquired .theatre, which will compete with Donuts’ .theater, from KBE gTLD Holding Inc.

.xyz starts to plummet — NetSol freebies to blame?

XYZ.com has been seeing its .xyz zone file shrink rapidly over the last five days, likely as a result of free domains pushed out to Network Solutions customers starting to expire.

DI PRO stats show that .xyz has shrunk by 49,658 domains this week — today at 888,413 names compared to a June 4 peak of 942,927.

It was June 4 last year when the industry become aware that NetSol was automatically pushing .xyz names into the accounts of its existing customers without their explicit consent.

Renewal rates usually do not become clear for 45 days after expiration, due to grace periods, but domains can delete earlier.

On June 9, 2014, one year ago today, .xyz had 87,073 domains in its zone file. It’s difficult to see where a loss of almost 50,000 names this week could come from if not the NetSol freebies deleting.

It is believed that the NetSol giveaway contributed about 350,000 names to .xyz’s zone over the period of its offer.

NetSol has been bundling .xyz renewals — which along with the free year of email and privacy comes to a whopping $57 — when it asks its customers to renewal their matching .com/.net/.org domains.

.xyz likely hasn’t seen the worst of its total shrinkage yet.

When eNom pushed free .info domains into its customers’ accounts about 10 years ago the renewal rate on those names was virtually zero.