Activist investor says eNom was sold too cheap

J Carlo Cannell, the activist investor who has been circling Rightside for the last year or so, was unimpressed with the company’s recent sale of eNom to Tucows.
In a letter published as a Securities and Exchange Commission filing last week, Cannell announced that he has started up a support group for fellow “concerned” investors.
In the distinctly loveless Valentine’s Day missive, Cannell called for Rightside to be acquired, go private or issue a big dividend to investors, and said he intends to campaign to have the board of directors replaced.
On the eNom sale, Cannell wrote that the $76.7 million deal “marks a step in the right direction” for the company, but that he was “not satisfied” with the price or the $4 million legal fees accrued. He wrote:

Conversations with management suggest that the Company took only two months to evaluate and close the transaction. Perhaps if they had been more patient and diligent, shareholders would have enjoyed more than the 0.5x 2016 revenues which they received in this “shotgun sale”.
This price was a fraction of Tucows’ own valuation of 2.6x 2016 estimated revenue. For the two trading sessions following the eNom transaction, NAME traded up 10% while TCX was up 32%, suggesting that investors believe it was a better deal for TCX shareholders than NAME shareholders.

The deal was described at the time by Tucows’ CEO Elliot Noss as an “individual opportunistic transaction”.
Noss later told analysts that the eNom business was floundering, “a flat, potentially even slightly negative-growth business”.
Cannell said last week he has formed Save NAME Group, named after Rightside’s ticker symbol, as a means to exert pressure on the board.
He said it is currently “difficult to justify” the company remaining publicly listed, and that the “sale of the entire company” or a “special and substantial dividend” could help appease shareholders.
He said Rightside agreed last August to let him name a new director, but has dragged its feet approving his suggestion, adding:

SNG intends to become more active and vocal in its efforts to force change at NAME. SNG has compiled a slate of qualified candidates. The names and identity of these candidates shall be disclosed periodically together with other neutral and reliable facts to support the contention of SNG that some or all of the board of NAME needs to be replaced.

Cannell, who owns about 9% of Rightside, first emerged as a critic of the company a year ago.
At that time, he called for the company to ditch its “garbage” new gTLD registries in favor of a focus on its higher-margin eNom business.
He was supported by Uniregistry CEO Frank Schilling, then also a Rightside investor in addition to a competitor.

Phishing in new gTLDs up 1,000% but .com still the worst

The .com domain is still the runaway leader TLD for phishing, with new gTLDs still being used for a tiny minority of attacks, according to new research.
.com domains accounted for 51% of all phishing in 2016, despite only having 48% of the domains in the “general population”, according to the 2017 Phishing Trends & Intelligence Report
from security outfit PhishLabs.
But new gTLDs accounted for just 2% of attacks, despite separate research showing they have about 8% of the market.
New gTLDs saw a 1,000% increase in attacks on 2015, the report states.
The statistics are based on PhishLabs’ analysis of nearly one million phishing sites discovered over the course of the year and include domains that have been compromised, rather than registered, by attackers.
The company said:

Although the .COM top-level domain (TLD) was associated with more than half of all phishing sites in 2016, new generic TLDs are becoming a more popular option for phishing because they are low cost and can be used to create convincing phishing domains.
…
There are a few reasons new gTLDs are gaining traction in the phishing ecosystem. For one, some new gTLDs are incredibly cheap to register and may be an inexpensive option for phishers who want to have more control over their infrastructure than they would with a compromised website. Secondly, phishers can use some of the newly developed gTLDs to create websites that appear to be more legitimate to potential victims.

Indeed, the cheapest new gTLDs are among the worst for phishing — .top, .xyz, .online, .club, .website, .link, .space, .site, .win and .support — according to the report.
But the numbers show that new gTLDs are significantly under-represented in phishing attacks.
According to separate research from CENTR, there were 309.4 million domains in existence at the end of 2016, of which about 25 million (8%) were new gTLDs.
Yet PhishLabs reports that new gTLD domains were used for only about 2% of attacks.
CENTR statistics have .com with a 40% share of the global domain market, with PhishLabs saying that .com is used in 51% of attacks.
The difference in the market share statistics between the two sets of research is likely due to the fact that CENTR excludes .tk from its numbers.
Again, because PhishLabs counts hacked sites — in fact it says the “vast majority” were hacked — we should probably exercise caution before attributing blame to registries.
But PhishLabs said in its report:

When we see a TLD that is over-represented among phishing sites compared to the general population, it may be an indication that it is more apt to being used by phishers to maliciously register domains for the purposes of hosting phishing content. Some TLDs that met these criteria in 2016 included .COM, .BR, .CL, .TK, .CF, .ML, and .VE.

By far the worst ccTLD for phishing was Brazil’s .br, with 6% of the total, according to the report.
Also notable were .uk, .ru, .au, .pl, and .in, each with about 2% of the total, PhishLabs said.

Belgium domains will be registered in Ireland after cloud move

DNS Belgium, operator of .be, has moved its shared registration systems to the cloud, the non-profit said last week.
The registry migrated from a self-hosted system to Amazon Web Services on February 11.
It’s an effort to cut costs, increase efficiency, and free up engineering time currently dedicated to non-core functions such as hardware maintenance, executives said.
“As AWS sees to the hardware, connectivity etc., DNS Belgium can focus on the layers above, such as the software,” general manager Philip Du Bois said in a press release.
Business development manager Lut Goedhuys said that while the system has been moved to the cloud, AWS allows customers to select the data centers where their applications will be stored.
DNS Belgium picked Ireland, she said.

Blah blah ICANN blah .africa blah delegated blah blah…

Today blah blah ZA Central Registry blah blah .africa blah delegated blah.
ICANN blah blah root blah. Blah blah ZACR blah nic.africa.
Blah blah five years blah blah contention blah lawsuit blah blah DotConnectAfrica blah. Blah blah Bekele blah IRP blah.
ICANN blah blah Governmental Advisory Committee blah blah blah African Union blah blah blah.
Blah blah Geographic Names Panel blah blah controversy blah blah blah blah lawsuit blah blah blah leg to stand on.

Registry Africa celebrates delegation of .africa#ForAfricansByAfricans #WeAreLive pic.twitter.com/UXZX6yKSPV

— dotAfrica (@africandomain) February 15, 2017

Blah racist blah blah conspiracy blah blah blah… nutty. Blah.
Blah reporting blah damned blah story blah forever blah blah bored blah blah blah blah.
Blah blah blah.

Five more new gTLDs, one in English, get the nod from China

Top Level Design’s .ink has become the sixth new gTLD in the Latin alphabet to be approved for sale in China.
It was one of four new gTLDs given regulatory approval to begin operating properly in the country late last week. The others were all in Chinese script.
From Finnish-founded TLD Registry, .中文网 (“Chinese web site”) and .在线 (“Chinese online”) gained approval.
From local outfit Guangzhou Yuwei Information Technology Co, .集团 (“group”) and .我爱你 (“I love you”) were given the nod.
It’s the third batch of new gTLDs to get Chinese government approval since .vip, .club and .xyz in December. In January, .site and .shop joined their ranks.
Under China’s Draconian domain name regulations, only domains registered via local registries and registrars may be used.
Registries from outside the country have had to set up a local corporate presence and agree to China’s censorship policies in order to be compliant.

The Pirate Bay likely to be sunk as .org adopts “UDRP for copyright”

Controversial piracy site The Pirate Bay is likely to be the first victim of a new industry initiative being described as “UDRP for copyright”.
The Domain Name Association today published a set of voluntary “healthy practices” that domain registries can adopt to help keep their TLDs clean of malware, child abuse material, fake pharmacies and mass piracy.
And Public Interest Registry, the company behind .org, tells DI that it hopes to adopt the UDRP-style anti-piracy measure by the end of the first quarter.
This is likely to lead to thepiratebay.org, the domain where The Pirate Bay has resided for some time, getting seized or deleted not longer after.
Under its Healthy Domains Initiative, the DNA is proposing a Copyright Alternative Dispute Resolution Policy that would enable copyright holders to get piracy web sites shut down.
The version of the policy published (pdf) by the DNA today is worryingly light on details. It does not explain exactly what criteria would have to be met before a registrant could lose their domain name.
But PIR general counsel Liz Finberg, the main architect of the policy, said that these details are currently being finalized in coordination with UDRP arbitration firm Forum (formerly the National Arbitration Forum).
The standard, she said, will be “clear and convincing evidence” of “pervasive and systemic copyright infringement”.
It’s designed to capture sites like The Pirate Bay and major torrent sites than do little but link to pirate content, and is not supposed to extend to sites that may inadvertently infringe or can claim “fair use”.
That said, it’s bound to be controversial. If 17 years of UDRP has taught us anything it’s that panelists, often at Forum, can take a liberal interpretation of policies, usually in favor of rights holders.
But Finberg said that because the system is voluntary for registries — it’s NOT an ICANN policy — registries could simply stop using it if it stops working as intended.
Filing a Copyright ADRP complaint will cost roughly about the same as filing a UDRP, typically under $1,500 in fees, she said.
Penalties could include the suspension or transfer of the domain name, but monetary damages would not be available.
Finberg said PIR chose to create the policy because she wasn’t comfortable with the lack of due process for registrants in alternative methods such as Trusted Notifier.
Trusted Notifier, in place at Donuts and Radix, gives the Motion Picture Association of America a special pass to notify registries about blatant piracy and, if the registry agrees, to have the domains suspended.
While stating that .org is a fairly clean namespace, Finberg acknowledged that there is one big exception.
“The Pirate Bay is on a .org, we’re not happy about that,” she said. “If I were to say what’s the one .org that is the prime candidate for being the very first one out of the gate, I would say it’s The Pirate Bay.”
Other registries have yet to publicly state whether they plan to adopt this leg of the DNA HDI recommendations.

ISOC New York challenges Neustar’s .nyc contract

The New York chapter of the Internet Society has called upon the city to delay the renewal of Neustar’s contract to run the .nyc gTLD, citing numerous concerns about how it is being managed.
In a letter (pdf) to Mayor Bill de Blasio, the group calls for a “town hall” and community consultation and for the city to “make appropriate adjustments” before the contract is renewed.
Its beef appears to be what it sees as .nyc’s lackluster performance in the market and the lack of promised community engagement.
The ISOC-NY letter contains a list of over a dozen “observations and nitpicks”.
These include a decline in .nyc registration volume, that fact that most .nyc names are parked, and the fact that Whois privacy is banned from the gTLD.
Neustar’s current contract is due to be renewed March, according to the letter.
(This post was updated February 8 to correct the expiry date of Neustar’s contract.)

.xxx has its ICANN fees slashed and adopts URS

ICM Registry is to see its .xxx ICANN registry fees hugely reduced in contractual amendments approved by ICANN last week.
The changes also mean that .xxx will now become subject to the Uniform Rapid Suspension anti-cybersquatting mechanism, despite it being a pre-2012 gTLD.
.xxx becomes the latest pre-2012 gTLD to move to a contract more closely aligned with the standard Registry Agreement from the new gTLD program.
Under the complex new deal, its per-transaction fee could be reduced from $2 to $0.25 by mid-2018.
Its quarterly fixed fee will go up from $2,500 to $6,250.
ICM has also agreed to take on many aspects of the standard new gTLD Registry Agreement, the most controversial of which is the URS.
The domainer group the Internet Commerce Association was fiercely critical of this addition to the contract, as it has been when URS was brought to .jobs, .travel, .cat, .pro and .mobi.
ICA is largely concerned that URS will also be pushed upon Verisign’s .net, which is up for contract renewal this year, and eventually .com.

Donuts sticks with Rightside despite Google support

Donuts has renewed its back-end registry services contract with Rightside, Rightside has announced.
That’s despite indications a few months ago that it might have been preparing for a switch to Google’s new Nomulus platform.
Rightside said yesterday that the deal, which has seen Rightside handle the registry for Donuts’ portfolio of almost 200 gTLDs for the last five years, has been extended.
It’s a “multi-year” deal, but the length of the extension has not been revealed.
Donuts had suggested last October that it might be ready to move to Nomulus instead.
The company revealed then that it had been quietly working with Google for 20 months on the software, which uses Google’s cloud services and is priced based on resource usage.
Then-CEO Paul Stahura said Nomulus “provides Donuts with an alternative back-end with significant benefits.”
Now-CEO Bruce Jaffe said yesterday that “Rightside’s registry platform has the right combination of innovative features, ease-of-operation, scalability, and highly responsive customer support”.

.club financing option sees early traction with $150k sales

.CLUB Domains said it has seen some early successes with its new 0% financing option, selling $150,000 worth of premium .club domains in its first week.
The registry announced that it sold 39 premiums for a total of $149,480, and that 37 of those names were sold using the financing option.
This option allows registrants to spread the cost of their domains over five years — 60 monthly payments — for names priced over $1,000.
The scheme was announced at the NamesCon conference in conjunction with a new brokers program, which gives brokers the ability to pass on 10% discounts to their clients and earn 15% commissions.
Seventeen of the 39 names were sold via brokers.
The results of the the first seven days of these programs compare favorably to other periods. In the fourth quarter of 2016, .CLUB said premium sales were $112,000.
For the whole of 2016, the registry sold $941,000 of reserved premium names, making a total of $4.3 million since .club launched May 2014.