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GoDaddy has a secret weapon in its push into corporate domains

Kevin Murphy, November 19, 2020, Domain Registrars

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

Kevin Murphy, November 18, 2020, Domain Registrars

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

Kevin Murphy, November 9, 2020, Domain Registrars

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

Kevin Murphy, November 5, 2020, Domain Registrars

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

Kevin Murphy, November 5, 2020, Domain Registrars

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

Kevin Murphy, November 3, 2020, Domain Registrars

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.

Facebook to enter the retail registrar business?

Kevin Murphy, October 26, 2020, Domain Registrars

Worryingly perhaps for the retail registrar market, Facebook has revealed it’s due to launch a set of business web-hosting services.

The company said in a blog post last week that it plans to reveal Facebook Hosting Services “over the coming months”.

While very little is known about these services, Facebook appears to be interested in leveraging its popular WhatsApp messaging platform. The company blogged:

Facebook Hosting Services – Businesses have varying technology needs and want choice in the companies they work with to host and manage customer communications, particularly with remote work increasing. Which is why over the coming months, we plan to expand our partnerships with business solution providers we’ve worked with over the last two years. We will also provide a new option for businesses to manage their WhatsApp messages via hosting services that Facebook plans to offer. Providing this option will make it easier for small and medium size businesses to get started, sell products, keep their inventory up to date, and quickly respond to messages they receive – wherever their employees are.

There’s no mention of domains there, but domains almost always go hand in hand with hosting.

The fact that a company with Facebook’s reach is venturing into hosting will surely worry registrars that already make a huge chunk of their revenue from such services.

Facebook URLs are already considered a valid alternative to domain names for many small and micro-businesses, so there’s a question mark next to Facebook’s intention with regards domains.

Facebook already owns at least two ICANN-accredited registrars, RegistrarSEC and RegistrarSafe, but they do not sell domains to third parties.

The two registrars are currently basically an insurance policy against Facebook’s hugely valuable domains being suspended or transferred by third-party registrars in response to court orders.

RegistrarSEC appears to be the preferred registrar for Facebook’s defensive domains. Its domains under management number has been growing by hundreds per month for the last few years. It has over 8,500 names currently.

RegistrarSafe is the sponsoring registrar for about 175 of Facebook’s key domains, such as facebook.com and instagram.com.

Facebook’s UDRP wins seem to usually wind up at law firm Hogan Lovells’ registrar.

GoDaddy denies weird front-running claim

Kevin Murphy, September 21, 2020, Domain Registrars

GoDaddy has been forced to deny (again) that it engages in front-running after a social media post attracted hundreds of comments.

Front-running is the practice of a registrar monitoring customers’ availability searches then registering the name itself in order to mark it up to a premium price.

No reputable registrar does this any more, if only because it would be reputation suicide.

But a poster on HackerNews claimed to have been exploited in precisely this way,

searched a few days ago for felons.io, looked for unique names for simple game didn’t know if I wanted it or not

guess godaddy decided for me: 1 days old Created on 2020-09-16 by GoDaddy.com, LLC

just a warning if you have a special name do not use godaddy to check if its available

Domains can appear to be front-run due to the law of large numbers. Registrants may think they’re the only one with a unique domain idea, but they’re likely not.

After the HackerNews post attracted hundreds of comments (largely promoting Namecheap as a superior competitor) and a post from Eliot Silver, GoDaddy decided to issue a response.

“These accusations are 100% false. This type of behavior is predatory, unethical, and goes against everything we stand for as a company,” registrar head Paul Bindel posted over the weekend.

Bindel went on to post the results of search queries for “felons” and related terms over a couple of weeks. There weren’t a huge amount.

Complicating the story, he also says that the felons.io domain was suspended not long after registration, and will soon be deleted, after it was flagged as a fraudulent registration by a compromised account.

Interestingly, the HackerNews account used to post the original allegation appears to have been created on the same day as the post, which is literally the only thing he or she ever posted on the site.

Is India’s largest registrar about to go titsup? And where the hell is ICANN?

Kevin Murphy, September 21, 2020, Domain Registrars

India’s largest independent domain name registrar appears to be “doing an AlpNames”, with many customers complaining about domains going dark, transfer codes not being issued, and customer support being unavailable for weeks.

Net 4 India, which claims to have 400,000 customers, has been in insolvency proceeds for over two years, but it’s only in the last couple months that the complaints have started piling up by the scores from disgruntled customers.

A major complaint is that renewals are not processed even after they are paid for, that transfer authcodes never arrive, that customer support never picks up the phone or replies to emails, and (occasionally) that the Net4 web site itself is down.

As we saw with AlpNames last year and RegisterFly back in the mists of time, These are all the warning signs of a registrar in trouble.

On its web site, Net4 prominently warns customers that its call centers are operating on a skeleton staff due to India’s coronavirus lockdown measures, which may account for the lack of support.

But there are reports that customers have visited the company’s offices in person to find them closed.

There’s been radio silence from the registrar. Even its Twitter account is private.

Many local commentators are pointing to the fact that Net4 is in protracted insolvency proceedings as the true underlying issue.

There have been calls for government intervention, action by .in registry NIXI, ICANN enforcement, and even the Indian equivalent of a class action lawsuit. This local cyber law blogger is all over it.

But what is ICANN doing about it?

Net4 was taken to a quasi-judicial insolvency court in 2017 by a debt-recovery company called Edelweiss over the rupee equivalent of about $28 million of unpaid loans from the State Bank of India.

ICANN has been aware of this fact since at least April 2019, when it started calling the registrar for an explanation.

Under the standard Registrar Accreditation Agreement, being in insolvency for over 30 days is grounds for unilateral termination by ICANN.

ICANN could terminate the agreement and transfer all of Net4’s gTLD domain names to a different registrar pretty much at will — all the registrant data is in escrow. This would not protect Net4’s many thousands of .in registrants of course.

ICANN suspended Net4’s RAA in June last year, but Net4 somehow managed to talk its way out of it. ICANN later rescinded the suspension on the proviso that the registrar provide monthly updates regarding its insolvency.

Net4’s cure period has been extended three times by ICANN. The latest expired July 31 this year.

At least one ICANN staffer is on the case, however. ICANN’s head of India Samiran Gupta has recently been reaching out to customers on Twitter, offering his email address and assistance getting in contact with Net4 staff, apparently with some success.

But Net4 had 95,000 gTLD names under management at the last count (though it’s been hemorrhaging thousands per month) so this individual approach won’t go very far.

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

Kevin Murphy, September 18, 2020, Domain Registrars

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.