ICANN throws the book at Net4 over dodgy transfer claims

Struggling Indian registrar Net 4 India has been slammed with a massive breach notice by ICANN, following claims of domain transfers failing or happening without the consent of the registrant.

ICANN also accuses the company, which is or was India’s largest independent registrar, of trying to bullshit its compliance staff about whether expired domains had been renewed or not.

According to ICANN, Net4 is in breach of the Registrar Accreditation Agreement on four counts, three of which relate to domain ownership records.

ICANN says the company isn’t operating a Whois service on the web or port 43, has failed to escrow its registration data on two recent occasions, and has failed to hand over registrant information upon ICANN’s request.

It’s also past due with its fees, ICANN says.

ICANN’s been dealing with complaints about Net4 for months, after the company’s customer service system appeared to break down in the wake of the coronavirus pandemic. Hundreds of customers have said their domains were unrenewable and that they were unable to transfer to another registrar.

In the latest breach notice — the first published breach notice against any registrar since February — ICANN names almost 200 domain names that have allegedly been held hostage at Net4, despite the registrant’s efforts to transfer out.

ICANN wants proof that registrants were given transfer authorization codes and that their domains were unlocked.

In a smaller number of cases, ICANN wants proof that domains were transferred to Net4 partner Openprovider, for which it acts as a reseller, with the consent of the registrants.

It also claims that Net4 has more than once tried to prove that a registrant renewed their expired name by supplying the registry’s expiration date instead of its own, to blag its way out of accusations that registrants were unable to renew.

ICANN also accuses the registrar of dragging its feet to address complaints:

Over the past few months, the number of complaints ICANN Contractual Compliance has received from [registered name holders], and authorized representatives, asserting that Net 4 India is exhibiting a pattern of non-response to domain transfer and renewal requests has steadily increased. While addressing the relevant compliance cases, Net 4 India’s responses to ICANN Contractual Compliance have also regularly been untimely and incomplete.

Net4 is now in the unprecedented position of being subject to two different breach notices simultaneously.

ICANN actually issued a suspension notice in June 2019, after noticing that Net4 had been in insolvency proceedings for two years — a debt recovery agency is trying to recover $28 million in unpaid debts.

But that suspension deadline was paused after talks with the “resolution professional” handling the insolvency case, for reasons ICANN’s been rather quiet about, and it remains on pause to this date.

The newest breach notice has a December 31 deadline on it. Unless Net4 turns on its Whois and hands over the reams of requested data by then, ICANN could terminate its contract.

Assuming the insolvency court allows it to, presumably.

Three more new gTLDs blink out of existence

Another new gTLD registry operator, representing three dot-brands, has told ICANN that they want their contracts scrapped.

The registry is CNH Industrial, and the gTLDs are .case, .caseih and .newholland.

To be honest, if you’d asked me yesterday whether these TLDs existed or not, I would have guessed not.

But CNH is a pretty big deal — a New York-listed multinational maker of construction and agricultural equipment and vehicles with over $28 billion in revenue last year. Case and New Holland are two of its brands.

The brands do not appear to have been discontinued, so this seems to be a typical case of company simply deciding against using its TLDs, which it probably shouldn’t have applied for in the first place.

None of them has any domains beyond the mandatory nic.example site.

Interestingly, it has a fourth dot-brand, .iveco, representing a vehicle brand, that so far it does not seem to have terminated, judging by ICANN records. But that’s not in use either.

The terminations bring the total dead dot-brands to 85, 16 of which died this year.

NameSilo in profit as sales rise 11%

Canadian registrar NameSilo today reported a profit for the third quarter, as bookings increased 11% sequentially over the three months to September 30.

One of the fastest-growing registrars, the company said that as of today it has 3.54 million domains under management, up from the 3.45 million it reported at the start of September.

NameSilo said its revenue for the quarter was $8.07 million, up 2.8% on Q3 2019. Its net income was $2,72 million, compared to a net loss of $753,093 a year earlier.

Much of the net income was attributable to income on investments, the firm said.

Bookings, which represents the number of domains sold but not yet recognized as revenue for accounting purposes, was up 11% compared to Q2 at $8.4 million.

CentralNic more than doubles revenue as parking business thrives

CentralNic today reported revenue growth of 118% for the nine months to September 30, largely on the back of its recently acquired domain monetization business.

The company said it made a net loss after tax of $6.2 million, compared to $6 million, on revenue of $168.5 million.

Still casting itself as the domain industry’s consolidator, most of the growth came due to acquisitions made over the last couple of years, so CentralNic has also published pro forma results to give a better sense of organic growth.

On that basis, revenue was up a still-decent 17%.

The acquisition of Team Internet, which offers the ParkingCrew and Tonic monetization services, for $48 million just over a year ago was the biggest booster of growth.

Pro forma, CentralNic’s monetization segment was up 39% to $72.9 million in revenue, mostly due to a whopping 36% increase in RPMs.

Ninety-two percent of its monetization revenue comes from a single customer.

CentralNic’s indirect segment, which unhelpfully bundles together its registrar reseller channel with its registry service provider operation and .sk registry operator business, was up 51% to $63.5 million and up 8% to $65.2 million pro forma.

The company said the growth was mostly due to the acquisitions of TPP Wholesale and Hexonet Group last year.

The direct segment, which comprises its retail registrars as well as software and consultancy, dipped by 9% to $32.1 million, or 2% to $31.8 million pro forma.

GoDaddy has a secret weapon in its push into corporate domains

While GoDaddy has been focused for the last two decades on small and microbusiness customers, its entry this year into the corporate domains management space should not be dismissed — the company has one huge advantage.

Earlier this week, the company announced the launch of GoDaddy Corporate Domains, really just a rebranding of the company Brandsight, which it acquired back in February.

The move pits GoDaddy against industry leaders such as MarkMonitor, CSC, Com Laude, Safenames et al.

But the company has one huge advantage that its new competitors do not have: cybersquatters and criminals.

Buried at the bottom of this week’s press release is the announcement of a new service, the Verified Intellectual Property program, which “provides pre-vetted, well-known and famous brands an escalation path to address IP abuse”.

It sounds basically like a trusted notifier service not unlike those offered at the registry level by the likes of Donuts and Radix.

VIP clients will be able to get sites and domains hosted on GoDaddy taken down much quicker, via a special escalation email address, a spokesperson said. Takedown requests will still be subject to manual review, he said.

VIP is currently invitation-only, but I assume being a Corporate Domains customer would help expedite an invitation.

This kind of service is something GoDaddy’s new rivals cannot offer — they generally have no retail channel or hosting, so have no cyberquatters, pirates or counterfeiters as customers. If they want to take down a domain or web site, it’s not a simple matter of flipping a switch.

They also don’t have tens of millions of domains under management, many of which, through no fault of GoDaddy, will be maliciously registered.

This is potentially a pretty cool USP for GoDaddy, which could have rivals worried.

ICANN finally addresses Net 4 India meltdown, but mysteries remain

ICANN today made an effort to publicly address the hundreds of complaints that have recently been made about Net 4 India, India’s largest registrar, which has been in insolvency proceedings for over three years and recently started losing its customers’ domains.

In a lengthy blog post, ICANN confirmed that it received roughly 300 complaints about Net4 in August and September, when India was in coronavirus lockdown and the registrar’s customer service department was unable to cope with demand.

Many customers reported on social media and elsewhere that domains were expiring and transfers to third-party registrars were not possible.

ICANN said it had received over 400 complaints since it filed its first notice of suspension against Net4, which came about after ICANN learned of the insolvency proceedings, in June 2019. It says 74% have been resolved and it’s working on the remainder.

The post sets out customers’ options when it comes to filing complaints, which is complicated by the fact that Net4 also acts as a reseller for OpenProvider, which is not in the same financial difficulty.

ICANN’s says that it is closely monitoring Net4’s compliance with its Registrar Accreditation Agreement and has regular contact with the insolvency court where the company’s case is being heard.

What’s unclear is why the company has been permitted to continue to operate as an accredited registrar, despite its insolvency proceeding being a direct violation of the RAA. ICANN filed a suspension notice in June last year, but has postponed its effective date ever since.

While ICANN says it has not ruled out terminating Net4 and transferring its domains to another registrar, the reality may be that it is unable to do so.

In today’s post, ICANN says it “postponed the start date of the Suspension Period after considering information regarding the insolvency proceedings” provided by the court-appointed resolution professional.

Last month, during the ICANN 69 public forum, the org was asked by an Indian registrant what it was doing about Net4, and compliance chief Jamie Hedlund responded:

When they initially filed for insolvency, we attempted to suspend them and prevent them from being able to register new names. But unfortunately due to the insolvency, we were not able to do that.

It seems that a resolution professional appointed by a quasi-judicial Indian court has managed to trump ICANN’s powers under its Californian-law registrar contract.

Net4’s latest registry transaction reports show that it had 90,000 gTLD domains under management at the end of July. It’s bleeding thousands of domains every month. The company claims to have 400,000 customers in total.

The insolvency proceedings were initiated in 2017 by a debt-recovery agency called Edelweiss, which had acquired $28 million of debts Net4 owed the State Bank of India.

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.

GoDaddy set to pay millions to settle robocalling class action

GoDaddy is due to pay a bunch of class action lawyers millions of dollars to settle a lawsuit alleging historical illegal robocalling practices, while giving affected customers a lousy $35 apiece.

The lawyers have reportedly filed for final approval of a settlement (pdf) agreed to in May that put GoDaddy on the hook for up to $35 million.

The Alabama suit, Drazen v Goddady, alleged that the registrar between 2014 and 2016 broke the US Telephone Consumer Protection Act by using software to automatically call and text customers with upsell offers without their permission.

GoDaddy denied, and continues to deny, any allegations of wrongdoing.

Still, it’s decided to pay the lawyers to go away, to avoid costly ongoing litigation.

While the payout is capped at $35 million, in reality the company will be paying substantially less.

Affected US-based customers who filed a claims form before October 7 will either receive a check for $35 cash or store credit, redeemable within one year, for $150.

Reportedly, only 24,000 of the 1.46 million potential class members filed their claims by the deadline, so GoDaddy only stands to pay out $840,000 cash, $3.6 million in store credit, or some value between the two.

The class action plaintiff’s lawyers, on the other hand, stand to get up to 30% of the $35 million settlement, or $10.5 million.

The representative plaintiffs who put their names to the complaint get $5,000 each for their trouble.

GoDaddy sees 12% growth in domains revenue

GoDaddy delivered another quarter of impressive growth in the third quarter, showing again the resilience of the domain name market to the coronavirus pandemic.

The company reported total revenue up 11% on the same period last year at $844.4 million, with net income sliding from $76.8 million to $65.1 million.

GoDaddy spent more on marketing during the quarter, saying that as demand for its services increases it needs to make sure it captures as many customers as possible.

Revenue from domains slightly outperformed overall growth, coming in at $387.4 million, up 12.2% year over year.

The domains segment was also a bit more profitable because GoDaddy no longer has to pay Neustar for domains in TLDs managed by what is now GoDaddy Registry.

The business applications segment, which includes email and third-party apps such as shopping carts, was the standout growth segment, coming in at $154.6 million, up 18.7%.

GoDaddy expects to see a similar pattern in Q4, with domains growth coming in at low double figures and business apps growth coming in at high double figures.

Both Q3 growth and Q4 outlook were better than analysts expected, and GoDaddy stock was rewarded accordingly.

The company also announced the departure of COO Andrew Low Ah Kee after 10 years with the company. His position will not be immediately refilled, and he is said to be taking a presidential role at a company outside of the domain industry.

Another domain firm going private as Endurance announces $3 billion deal

Endurance International, owner of registrar brands including Domain.com, BigRock and BuyDomains, plans to go private in a $3 billion private equity deal.

The buyer is Clearlake Capital group, in what appears to be its first foray into the domain name market.

It has offered to pay $9.50 for each Endurance share, saying it’s a 79% premium on the closing price the day before the media first got a whiff of a deal being in the works back in September and a 64% premium on Friday’s close.

The deal is still subject to shareholder approval, but Endurance says institutional investors accounting for 36% of its shares have already promised to vote in favor.

Endurance yesterday also announced its third-quarter financial results. It reported net income down from $7.8 million to $6.7 million, on revenue that was up 3% at $278.4 million.

The company does not break out what portion of its revenue or profit comes from domains. Hosting and web marketing services are also a big part of its business.