Facebook’s war on privacy claims first registrar scalp

China’s oldest accredited registrar says it will shut up shop permanently next week after being sued into the ground by Facebook, apparently the first victim of the social media giant’s war against Whois privacy.

Facebook sued OnlineNIC in 2019 alleging widespread cybersquatting of its brands. The complaint cited 20 domains containing the Facebook or Instagram trademarks and asserted that the registrar, and not a customer, was the true registrant.

The complaint named ID Shield, apparently OnlineNIC’s Hong Kong-based Whois privacy service, as a defendant and was amended in March this year to add as a defendant 35.cn, another registrar that Facebook says is an alter ego of OnlineNic.

The amended complaint listed an addition 15 squatted domains, for 35 in total.

This week, OnlineNIC director Carrie Yu (aka Carrie Arden aka Yu Hongxia), told the court:

Defendants do not have the financial resources to continue to defend the instant litigation, and accordingly no longer intend to mount a defense. Defendants do not intend to file any oppositions to any pending filing… Subject to any requirements of ICANN, Defendants intend to cease business operations on July 26, 2021.

But Facebook reckons the registrar is about to do a runner to avoid paying almost $75,000 in court fees already incurred and avoid the jurisdiction of the California court where the case is being heard.

Facebook had asked for $3.5 million in penalties in a proposed judgment and OnlineNIC had not opposed.

While it presents itself as American, it appears that OnlineNIC is little more than a shell in the US.

Its official headquarters are little more than a lock-up garage surrounded by builders’ merchants in a grim, windowless facility just off the interstate near Oakland, California.

Its true base appears to be a business park in Xiamen, China, where 35.cn/35.com operates. The company has boasted in the past of being China’s first and oldest ICANN-accredited registrar, getting its foot in the door when the floodgates opened in 1999.

Facebook is now asking the court for a temporary restraining order freezing the defendants’ financial and domain assets, and for a domain broker to be appointed to liquidate its domain portfolio.

If you’re a legit OnlineNIC customer, you might be about to find yourself in a world of hurt.

OnlineNIC had just over 624,000 gTLD domains under management at the last count. 35.cn had another 200,000.

The lawsuit is one of three Facebook is currently fighting against registrars, one prong of its strategy to pressure the ICANN community to open up Whois records rendered private by EU law and consequent ICANN policy.

OnlineNIC is the low-hanging fruit of the trio and the first to be sued. It already faced cybersquatting cases filed by Verizon, Yahoo and Microsoft in 2009. The Verizon case came with a $33 million judgment.

Facebook has also sued the rather less shady registrars Namecheap and Web.com (now Newfold Digital) on similar grounds.

.com and NameSilo fingered as “most-abused” after numbers rocket

SpamHaus has revealed the most-abused TLDs and registrars in its second-quarter report on botnets.

The data shows huge growth in abuse at Verisign’s .com and the fast-growing NameSilo, which overtook Namecheap to top the registrar list for the first time.

Botnet command-and-control domains using .com grew by 166%, from 1,549 to 4,113, during the quarter, SpamHaus said.

At number two, .xyz saw 739 C&C domains, up 114%.

In the registrar league table, NameSilo topped the list for the first time, unseating Namecheap for the first time in years.

NameSilo had 1,797 C&C domains on its books, an “enormous” 594% increase. Namecheap’s number was 955 domains, up 52%.

Botnets are one type of “DNS abuse” that even registrars agree should be acted on at the registrar level.

The most-abused lists and lots of other botnet-related data can be found here.

Net4 domains now parked after “fraud” ruling

The primary operating domain names of disgraced registrar Net 4 India are now parked, after the company lost its ICANN accrediation and was hit by a finding of fraud in an insolvency case.

The names net4.com and net4.in, which once hosted its customer-facing retail site, now return parking pages.

It emerged in recent court documents that Net4 paid $14,068 for net4.com in March 2011 via Sedo.

Net4 saw its ICANN termination terminated in May. All of its gTLD domains under management were transferred to PublicDomainRegistry, which also made side deals with registries to accept .tv, .me and .cc domains.

.in registrant were being dealt with by NIXI, the local ccTLD registry.

Net4 had been in insolvency proceedings for a few years before its customers started noticing serious problems renewing and transferring their names, or even contacting customer support.

Now it emerged that the insolvency court in late May found that Net4 had acted “fraudulently” in order to “defraud” its creditors.

The company had defaulted on millions of dollars in loans from the State Bank of India, debts that were subsequently sold to a debt recovery company called Edelweiss, which filed for Net4’s insolvency.

In a lengthy and complex May ruling (pdf), the Delhi insolvency court found that Net4 had transferred its primary operating assets including its domains, trademarks and registrar business to a former subsidiary, Net4 Network, in order to keep them out of the hands of Edelweiss.

Net4 had “fraudulently transferred” the assets in “undervalued and fraudulent transactions” designed to put the assets “beyond the reach of the Creditors so as to defraud the Creditors”, the court ruled.

The court ruled that the resolution professional handling the case is now free to pursue Net4 Network and its director for the money that would have otherwise have been held by Net4 proper.

Afilias leftovers rebrand as Altanovo

The non-registry bits of Afilias that were not acquired by Donuts in the acquisition deal announced last December have been rebranded as Altanovo Inc.

The new Delaware company owns the registrar 101domain, the mobile device software company DeviceAtlas, and the Irish new gTLD application vehicle Afilias Domains No. 3 Ltd, now renamed Altanovo Domains Ltd.

Altanovo Domains is the entity currently fighting ICANN and Verisign for the right to run the .web gTLD.

Afilias’ registry business, including .info, its portfolio of new gTLDs and its .org-running registry back-end business, joined Donuts earlier this year.

Altanovo means “new height”, the company says on its new web site.

Sav.com buys FIFTY new registrars

Who said competition in the domain drop-catching space was dying?

Domain registrar Sav.com, which has been emerging as a bit of a favorite among domain investors over the last year or so, has just formed 50 new registrars with ICANN accreditation to power its drop-catching service.

ICANN records show the creation of newly accredited registrars named “Sav.com, LLC – 1” through “Sav.com, LLC – 50” in recent days, each with the same contact information.

They’re no doubt there to increase Sav’s pool of registry EPP connections, increasing the company’s chance of successfully securing dropping domains.

The company has proven popular among domainers recently due to its no-win-no-fee back-ordering service and its habit of passing on registry wholesale discounts to its customers, resulting in very low first-year pricing.

Since its launch in late 2019, it’s been using its original accreditation, purchased from NameKing.com that year, to catch names. It’s grown from around 4,000 names under management to over 400,000 in that time.

Fifty new registrars means at least an extra $200,000 a year going into ICANN’s pocket for accreditation fees. ICANN’s budget for its current fiscal year predicted its registrar base decreasing by 380 accreditations.

The emergence of this new dropnet comes just days after ICANN canned former dropcatcher Pheenix, which used to have over 500 registrars in its network.

“Origami pinwheel” wins logo contest as Newfold comes out

Newfold Digital, by my reckoning the second-largest registrar group, has officially announced itself with a new logo and branding.

The company was formed in February when Clearlake Capital merged Endurance International with Web.com, bringing dozens of domain and hosting brands under one roof.

The company now acts as an umbrella for Web.com, Register.com, Network Solutions, Domain.com, CrazyDomains, ResellerClub, BigRock, BuyDomains, SnapNames and Namejet, among others.

It’s run by former Web.com CEO Sharon Rowlands.

The new logo was the result of a contest among over 100 Newfold employees that was won by system administrator Vishnu Pradeepan.

In a press release, he said:

The abstract shape of the ‘N’ in an origami-style pinwheel symbolizes good luck and represents an endless cycle of energy. That endless cycle of energy represents not just our team, who work tenaciously to ensure our customers are successful, but also the endless possibilities available in our connected world.

It seems you don’t need to pay an expensive ad agency for a decent-looking logo with a free side order of marketing waffle.

Pheenix goes AWOL, gets canned

Drop-catch registrar Pheenix has had its registrar contract terminated by ICANN after apparently going AWOL.

ICANN has been chasing the company for breaches related to Whois and access to registrant data since October 2019, but hasn’t heard a peep out of the outfit for a year.

As I noted when ICANN published its first breach notice last month, ICANN hasn’t been able to connect with Pheenix via email or phone or fax since May 2020.

Since then, it’s also discovered that the company is no longer at the mailing address it has on record.

The registrar has not added any domain names since April 2020. It seems clear it no longer has any interest in doing, or perhaps ability to do, business.

The de-accredited registrar bulk transfer process will now kick in. ICANN will select a registrar to move Pheenix’s 6,000-odd domains to.

Pheenix once specialized in drop-catching, and had over 500 ICANN-accredited registrars to its name. Almost all of those were ditched in November 2017.

PDR wins beauty contest to take over Net4’s stranded customers

PublicDomainRegistry.com, part of the new Newfold Digital registrar group, has been picked to take over thousands of domain names from disgraced and defunct Net 4 India.

ICANN seems to have used the beauty contest method of picking Net4’s successor, saying that PDR was picked in part because it already operates in the region. It’s based in Mumbai.

ICANN expects PDR to start reaching out to its new customers next week with instructions on how to get access to their domains at their new registrar.

It goes without saying that Net4 customers should be wary of possible scams, which sometimes accompany this kind of event.

Customers won’t be charged for the transfers, and they won’t have to deal with transfer authorization codes, ICANN said.

PDR was part of the Endurance group until its recent merger with the Web.com group, which created Newfold.

It’s the second-largest registrar group and undoubtedly a safer set of hands than Net4, which has left thousands of customers struggling to renew, manage and transfer their domains for several months.

The bulk transfer to PDR comes after ICANN terminated Net4’s contract for multiple breaches.

Earnings reports: GoDaddy, Tucows and NameSilo report growth

Three of the industry’s largest registrars announced revenue growth in their latest reporting periods in recent days.

GoDaddy

Market-leading GoDaddy reported a whopping 18.8% year-over-year revenue growth from domains in its first quarter, with $422.7 million.

CEO Aman Bhutani told analysts that much of this growth is being driven by the company’s emerging strategy of acting as a secondary-market intermediary, making it easier for domainers to sell their domains quickly to end-users (what it calls “independent customers”) and vice-versa.

“Independent customers added over 200,000 domain names that had otherwise been passive into the aftermarket, spurring activity for domain investors,” Bhutani said.

It currently has over 20 million domains listed on its aftermarket platform, contributing 10% of total revenue, the first time it’s broken into double-digits, analysts were told.

Domains was the best-performing segment in growth terms by some margin.

Including its other segments, GoDaddy’s overall Q1 revenue was up 13.8% year over year, at $901.1 million. It had a net income of $10.8 million, compared to $43.2 million a year earlier.

Tucows

Tucows reported domain services revenue up 4%, from $59.5 million in Q1 2020 to $61.2 million, with adjusted EBIDTA of $13.8 million versus $11.5 million a year ago.

CEO Elliot Noss said in a statement that new domain registration growth was slowing following the “pandemic surge” it experienced in 2020, when lockdown-hit businesses flew online to keep afloat.

Including its non-domain segments, Tucows reported Q1 revenue of $70.9 million. That was down from $84 million a year earlier largely as a result of the sale of its Ting Mobile business to Dish Network.

Net income for the quarter was $2.1 million, down 24% compared to the year-ago period.

NameSilo

Fast-growing registrar NameSilo reported revenue for its full-year 2020 of $31 million, up 14.3% on 2019. That was primarily driven by domains growth and its newish add-on services, it said, but it does not break down its revenue by segment.

It had net income of $6.5 million in fiscal 2020, compared to a net loss of $4 million in 2019.

It added 235,347 net domains in gTLDs in 2020, according to reports filed with ICANN, ending 2020 with 3,663,090 names under management. NameSilo said that number is now around 3.9 million.

Net4 nightmare almost over as court rules ICANN can shut down chaotic registrar

ICANN is finally moving to shut down Net 4 India’s gTLD domains business, after months of upheaval and thousands of customer complaints.

An Indian insolvency court this week lifted its ban on ICANN terminating Net4’s registrar contract, after ICANN appealed to it with a wealth of evidence showing how critical services such as hospitals and train services were being harmed by registrants being unable to transfer their domains away.

ICANN has now invoked its De-Accredited Registrar Transition Procedure, which will see Net4’s tens of thousands of gTLD domains transferred to a different, more stable registrar, according to head of compliance Jamie Hedlund.

The Org had terminated Net4’s contract in February after hearing from thousands of customers whose names had ceased to work, expired, or were locked-in to Net4 due to its broken transfers function.

But the Delhi court handling the registrar’s insolvency asked ICANN in March to delay the termination at the behest of the resolution professional attempting to extract as much value as possible from Net4 in service of its creditors.

That order was lifted orally after a hearing on Tuesday, according to ICANN.

Under the DARTP, either the dying registrar picks a successor or ICANN picks one, either from a rotation of pre-approved registrars or by rolling out a full registrar application process.

Given the timing crisis, and Net4’s irresponsible behavior to date, it appears most likely that ICANN will hand-pick a gaining registrar from the pre-qualified pool.

Hedlund blogged that ICANN expects to name Net4’s successor within two weeks, after which the gaining registrar will reach out to registrants to inform them how to proceed.

Registrants will not be charged for the bulk transfer.

Net4 had over 70,000 gTLD domains under management at the end of 2020, but this number has likely decreased in the intervening time.

ccTLDs such as India’s .in will not be covered by the bulk transfer. It will be up to local registry NIXI to minimize disruption for Net4’s .in registrants.