Schilling, Famous Four rubbish Spamhaus “worst TLD” league

Uniregistry and Famous Four Media have trashed claims by Spamhaus that their gTLDs are are much as 75% spam.
FFM says it is “appalled” by the “wholly inaccurate” claims, while Uniregistry boss Frank Schilling said Spamhaus has “totally jumped the shark here.”
In a statement to DI today, FFM chief legal officer Oliver Smith said the spam-fighting organization’s recently launched World’s Worst TLDs list is “reckless”, adding that the numbers are:

not only wholly inaccurate, but are misleading and, potentially, injurious to the reputation of Famous Four Media and those TLDs it manages. It is particularly worrisome that Spamhaus’s “findings” seem to have been taken as gospel within certain corners of the industry, despite not being proffered with any analytical methodology in support of the same.

The Spamhaus report, which is updated daily, presents the 10 TLDs that are more spam than not.
The rank is based on a percentage of domains seen by Spamhaus that Spamhaus considers to be “bad” — that is, are advertised in spam or carry malware.
Today, Uniregistry’s .diet tops the chart with “74.4% bad domains”, but the scores and ranks can and do shift significantly day by day.
Spamhaus describes its methodology like this:

This list shows the ratio of domains seen by the systems at Spamhaus versus the domains our systems profile as spamming or being used for botnet or malware abuse. This is also not a list that retains a long history, it is a one-month “snapshot” of our current view.

The words “seen by the systems at Spamhaus” are important. If a domain name never crosses Spamhaus’s systems, it isn’t counted as good or bad. The organization is not running the whole zone file against its block-list to check what the empirical numbers are.
In important ways, the Spamhaus report is similar to the discredited Blue Coat report into “shady” TLDs last September, which was challenged by myself and others.
However, in a blog post, Spamhaus said it believes its numbers are reflective of the TLDs as a whole:

In the last 18-years, Spamhaus has built its data gathering systems to have a view of most of the world’s domain traffic. We feel the numbers shown on this list are representative of the actual full totals.

I disagree.
In the case of .diet, for example, if 74% of the full 19,000-domain zone was being used in spam, that would equate to 14,000 “bad” domains.
But the .diet zone is dominated by domains owned by North Sound Names, the Frank Schilling vehicle through which Uniregistry markets its premium names.
NSN snapped up well over 13,000 .diet names at launch, and Schilling said today that NSN owns north of 70% of the .diet zone.
That would mean either Uniregistry is a spammer, or Spamhaus has no visibility into the NSN portfolio and its numbers are way the hell off.
“Spamhaus’ assertion that 74% of the registrations in the .diet space are spam is a numerical impossibility,” Schilling said. “They totally jumped the shark here.”
NSN’s domains don’t send mail, he said.
He added that diet-related products are quite likely to appear in spam, which may help account for Spamhaus’s systems identifying .diet emails as spam. He said:

Spamhaus is a high-minded organization and we applaud their efforts but this report is so factually inaccurate it casts into doubt the validity of everything they release. Spamhaus should be smarter than this and at a minimum consult with registries (our door is open) to gain a better understanding of the subject matter they wrongly profess to be expert in.

Similarly, FFM’s .review gTLD was briefly ranked last week as the “worst” gTLD at 75.1% badness. With 66,000 domains, that would mean almost 50,000 names are spammy.
Yet it appears that roughly 25,000 .review domains are long-tail geo names related to the hotels industry, registered by a Gibraltar company called A Domains Limited, which appears to be run by AlpNames, the registry with close ties to FFM itself.
Again, if Spamhaus’s numbers are accurate, that implies the registrar and/or registry are spamming links to content-free placeholder web sites.
FFM’s Smith says the registry has been using Spamhaus data as part of its internal Registry Abuse Monitoring tool, and that its own findings show significantly less spam. Referring to .review’s 75% score, he said:

This simply does not accord with FFM’s own research, which relies heavily on data made available by Spamhaus. The reality is that, in reviewing registration data for the period 8 February to 8 March 2016, only 4.8% of registered domains have been blacklisted by Spamhaus – further, it is questionable as whether every single such listing is wholly merited. When reviewing equivalent data for the period of 1 January to 8 March 2016 across ALL FFM managed TLDs this rate averages out to a mere 3.2%.

I actually conducted my own research into the claims.
Between March 8 and March 15, I ran the whole .review zone file through the Spamhaus DBL and found 6.9% of the names were flagged as spam.
My methodology did not take account of the fact that Spamhaus retires domains from its DBL after they stop appearing in spam, so it doesn’t present a perfect apples-to-apples comparison with Spamhaus, which bases its scoring on 30 days of data.
All told, it seems Spamhaus is painting a much bleaker picture of the amount of abuse in new gTLDs than is perhaps warranted.
During ICANN meetings last week and in recent blog comments, current and former executives of rival registries seemed happy to characterize new gTLD spam as a Famous Four problem rather than an industry problem.
That, despite the fact that Uniregistry, Minds + Machines and GMO also feature prominently on Spamhaus’s list.
I would say it’s more of a low prices problem.
It’s certainly true that FFM and AlpNames are attracting spammers by selling domains for $0.25 wholesale or free at retail, and that their reputations will suffer as a result.
We saw it with Afilias and .info in the early part of the last decade, we’ve see it with .tk this decade, and we’re seeing it again now.

.mobile will be restricted after Donuts loses auction to Dish DBS

The contention set for the new gTLD .mobile has been resolved, seemingly by private auction, with Dish DBS emerging victorious.
The portfolio registry withdrew its application at the weekend, leaving the satellite TV provider the only remaining applicant.
This means that .mobile will be a restricted gTLD, available only to vetted members of the mobile telephony industry.
Dish had originally proposed .mobile as a so-called “closed generic”, in which it would be the registry and only registrant, but changed its application last year.
It’s a similar story to .phone, which Dish also won.
Dish applied for 13 gTLDs. It withdrew two applications, and 10 others are either in pre-delegation testing or ICANN contracting.

New DNA boss named

The Domain Name Association has appointed industry newcomer Roy Arbeit as its new executive director.
Arbeit was most recently managing director of sales and marketing at the American Society of Mechanical Engineers. He’s also worked for the American Arbitration Association, Ernst & Young, and Citibank.
He will take the DNA top job effective March 15.
He’s stepping into an empty office. The last DNA executive director Kurt Pritz, who quit in October after two years in the job.
DNA chair Adrian Kinderis said: “He is a strategic thinker and experienced team builder who will help us to accelerate our mission of making the importance, value, and utility of domain names more widely understood.”

ICANN ups new gTLD revenue forecast

ICANN has increased its new gTLD revenue projections for fiscal 2016.
The organization released its draft FY17 budget over the weekend, showing that it expects its revenue from new gTLDs for the 12 months ending June 30, 2016, to come in at $27.3 million.
That’s a 13% increase — an extra $3.1 million — on what it expected when it adopted its FY16 budget last June.
The anticipated extra money comes from registry and registrar transaction fees, spurred no doubt by the crazy speculation in the Chinese market right now.
Registry transaction fees are now expected to be $2.8 million (up from the earlier prediction of $2 million) and $3 million (up from $2.3 million).
The bulk of the new gTLD revenue — $21.5 million — still comes from fixed registry fees, which do not vary with transaction volume.
For fiscal 2017, which starts July 1 this year, ICANN is predicting new gTLD revenue of $41.5 million, a 52% annual growth rate.
The adopted FY16 budget is here. The new proposed FY17 budget is here. Both are PDF files.
The FY17 proposals are open for public comment.

US judge freezes .africa gTLD

A US court has blocked ICANN from delegating the .africa gTLD for at least another month.
At the request of failed .africa applicant DotConnectAfrica, a California judge handed ICANN a temporary restraining order, enjoining it from “issuing” .africa.
The ruling came two days after the ICANN board of directors voted to allow .africa to be delegated to successful applicant ZACR.
The decision seems to be based on the fact that a delegation is essentially irreversible, so even if DCA were to win the lawsuit it would not be able to get its hands on the gTLD.
“Plaintiff has demonstrated that once the tGLD [sic] is issued, it will be unable to obtain those rights elsewhere,” the judge wrote (pdf).
DCA’s lawsuit, filed despite the that that it waived its right to sue under the new gTLD application agreement, basically makes the same arguments that its successful Independent Review Process made.
The court is due to hold a hearing on April 4 to decide whether ICANN can delegate .africa or will have to wait until the lawsuit is fully resolved.
The company, incidentally, appears to have changed lawyers since its original complaint against ICANN was filed. It’s now with Brown Neri & Smith, having briefly been with Brandon Schantz.

Amazon plotting registrar workaround?

Amazon has given an early hint at how it may manage its new gTLD registries.
The company seems to be planning to make its own web site the place to go to for its new gTLD domains, relegating registrars to secondary players in the sales path.
It also seems to be planning to up-sell registrants with services, possibly including hosting, before they even get to the registrar’s storefront.
Amazon has filed a Registry Services Evaluation Process request with ICANN, relating to its gTLD .moi (French for “.me”) covering a “Registration Authentication Platform”.
.moi isn’t a brand, but Amazon says it plans to verify registrant “eligibility” before allowing a registration to take place.
To date, it has not revealed what the eligibility requirements for .moi are.
Its RSEP filing says that it intends to offer registrants a suite of optional add-on “technology tools or applications” at the point of verification.
Crucially, that’s before they get bounced to their registrar of choice to actually register the name.
Amazon is basically putting its up-sell pitch into the sales path before registrars get to do the same.
The RSEP explains it like this:

After the customer selects the Technology Tools of interest and/or ancillary products or services (if any), the customer will select its registrar of choice from among the complete list of .MOI-accredited registrars and be directed to that registrar’s site to permit that registrar to collect the required registrant information for the domain name registration, and to submit payment for the selected .MOI domain name. Upon completion of these steps, the registrar, through the normal EPP processes, shall transmit the required registration information to the Registry and the .MOI domain name shall be registered. A customer that first visits a .MOI-accredited registrar’s website will be directed to the Registry’s .MOI website to undergo the process noted above. After pre-registration policy verification, those customers will be transitioned back to the originating registrar’s site.

The RSEP does not explain what the “technology tools” are, but I’d be very surprised if they did not include for example web hosting, a staple higher-margin registrar product.
It’s not entirely clear what, if any, consultations Amazon has had with registrars regarding its proposals. The RSEP language is evasive:

Amazon Registry reached out to several registrars to have general discussions about their experience with pre-registration policy verification and how that experience (including customer experience) could be improved. Any consultations that may have occurred regarding the Technology Tools and the ancillary products and services would have occurred subject to a Mutual Non-Disclosure Agreement and cannot be disclosed.

Currently, the RSEP only covers .moi. Amazon would have to file additional RSEPs if it wanted the new service applied to its 32-TLD-strong portfolio, which includes the likes of .book, .song and .tunes.
ICANN has already made a preliminary determination that the RSEP “does not raise significant competition, security or stability issues”.
As usual, there’s a public comment period, which ends April 14.

Schilling agrees with activist Rightside investor

Uniregistry boss Frank Schilling agrees to a large extent with the fellow Rightside investor who was revealed today to be threatening a boardroom coup at Rightside.
Schilling, who is believed to have paid $8.4 million for 6.1% of Rightside, told DI tonight that he believes Rightside’s management has not done a good job over the last few years.
He said he agrees with 7.32% shareholder J Carlo Cannell, who says that Rightside should get rid of some of its weaker new gTLDs.
Cannell, of Cannell Capital, is demanding Rightside lay off one in five of its staff, dump its weakest new gTLDs, and refocus the company on its eNom registrar business.
He’s threatening to launch a proxy fight at the company in order to replace the Rightside board of directors with his own slate if management does not do what he wants.
Cannell’s letter called out .democrat, .dance, .army, .navy, and .airforce as “irrelevant” or “garbage” gTLDs in Rightside’s portfolio that should be sold or simply “abandoned” in order to focus on its better gTLDs, such as .news, and its cash-generating registrar business.
Schilling told DI tonight that he agrees with Cannell, at least partly.
He said that if Cannell’s proposal for the company is good for shareholders and the company he would support it.
It may sound counter-intuitive for Schilling, one of the most ardent proponents of new gTLDs, to support somebody encouraging Rightside to invest less in marketing its new gTLD portfolio.
After all, Uniregistry has a couple dozen new gTLDs — including .sexy, .christmas, .pics and .link — in its stable
But Schilling has form when it comes to advocating portfolio rationalization.
Today he pointed to comments he made on a DI article in December
“Operators may make the decision to give away or sunset unprofitable strings,” he said in those comments. “I don’t view that as such a bad thing.”
Schilling said that weaker strings should be “bootstrapped” rather than aggressively invested in.
One of Cannell’s beefs with Rightside is that the company is focusing too much on new gTLDs. He’s not opposed to new gTLDs in general — in fact, he likes them — but he wants Rightside to put money only into those gTLDs he considers worthwhile.
Cannell also wants Name.com rebranded to eNom and moved to Rightside’s Seattle headquarters, for two of its directors to be replaced and for 20% of Rightside’s “weakest” staff to be laid off.
I asked Schilling whether he agreed with Cannell that that 20% of Rightside’s staff should be let go.
He said: “I do not think it is healthy to name arbitrary numbers but I do think some wrong people are in the wrong seats.”
Schilling also said that he believes Rightside has been “subservient” to Donuts, and has given Donuts too much for too little.
Donuts is the portfolio gTLD registry play that uses Rightside as its back-end registry provider.
Donuts has a much better portfolio, in my irrelevant opinion.
Another notable investor in Rightside is XYZ.com CEO Daniel Negari and his COO Michael Ambrose, who collectively invested roughly $8.5 million in Rightside at around the same time as Schilling and Cannell bought their stakes.
Like Schilling, they’re an obviously pro-new-gTLD play. I’ve asked Negari for his opinion on Cannell’s letter and will update should I ever receive a response.

Activist investor slams Rightside over “garbage” new gTLDs, looking for blood

A hedge fund manager known for causing trouble at the companies he invests in has savaged Rightside, saying its focus on new gTLDs at the expense of its registrar business is ruining the company.
J Carlo Cannell of Cannell Capital is looking for some serious bloodletting.
He wants Rightside to cut 20% of its staff, close offices, unify its products under the eNom brand and replace two of its directors.
He’s threatening to wage a proxy war to replace the Rightside board if he doesn’t get what he wants.
He wrote a scathing letter to Rightside chair Dave Panos last month, which was published in a Securities and Exchange Commission filing today.

NAME’s registrar has become like a crazy aunt kept in the basement, one that you refuse to adequately clothe or feed, but who steadfastly spins straw into gold used to subsidize a stable of largely substandard new GTLDs such as .democrat, .dance, .army, .navy, and .airforce. Most of these new GTLDs are irrelevant and will never be sold in material volumes. NAME is holding back the growth potential of your registrar by pushing garbage extensions to a user base that quietly knows better.

NAME is Rightside’s Nasdaq ticker symbol.
Cannell revealed he owned a 7% share of Rightside last month — paying reportedly just shy of $11 million for 1,389,953 shares.
He wants Rightside to sell off “or even abandon” some of its weaker gTLDs, which “should not consume all the resources of our Company at the expense of the assets that are currently profitable”, while keeping “gems” such as .news.
His letter doesn’t pull any punches.
Cannell is perhaps best known for his widely publicized tussle with Jim Cramer, TV show host and co-founder of financial news site TheStreet.

First new gTLD deleted from the net

.doosan today became the first new gTLD to be removed from the domain name system.
It’s no longer showing up in the DNS root zone file, and IANA’s record lists it as “retired”.
.doosan was a dot-brand managed by Korean conglomerate Doosan Group. The company never did anything with it before deciding to kill the TLD off last September.
A month ago, ICANN used the pending deletion to test its Emergency Back-End Registry Operator safety net.
If memory serves, it’s the only gTLD to be ever be removed from the root zone, excluding test internationalized TLDs previously operated by ICANN.
ccTLDs are removed somewhat regularly, when international borders are redrawn.

Krueger sues M+M over five million “missing” shares

Former Minds + Machines chair Fred Krueger has taken the company to court, claiming he’s owed shares worth over half a million dollars.
In a lawsuit filed in Los Angeles this week, Krueger says the shares were promised to him in 2007 but have subsequently gone “missing”.
The suit also names as defendants M+M chief financial officer Michael Salazar and Antony Van Couvering, who until last week was CEO.
Krueger himself was asked to leave the company by its board of directors in May last year.
He was one of the company’s founders in 2007. According to his lawsuit, he was promised 25 million shares, which were to be delivered to his Goldman Sachs account in a batch of 20 million and a batch of five million.
Krueger now claims that Goldman has no record of the five-million batch arriving and that M+M has failed to figure out whether the shares were ever even issued.
His complaint says he paid $400,000 for the shares. Judging by M+M’s current share price, they’re now worth around £437,500 ($609,000).
Krueger says that he didn’t notice the shares were missing until forensic accountants picked over his net worth as part of his 2013 divorce.
The suit alleges breach of contract, negligence, and other claims related to the shares. In total, he’s looking for at least $1.5 million in damages.
It also sheds a bit of light on Krueger’s actions immediately following his May 2015 dismissal from the company.
When he “resigned”, he issued a statement via the company that said among other things “my goal is to keep the vast majority of my shares”.
But within a couple of weeks he had started selling and in a matter of months he had disposed of all of his 104 million shares.
Now, according to his lawsuit, his May 2015 “Exit Agreement” with M+M’s board actively incentivized him to sell all of his shares. It says:

In May 2015, Plaintiff Krueger left Minds + Machines Board of Directors under an agreement Plaintiffs Krueger and Needly made with Minds + Machines Group that if Plaintiff Krueger would sell all of his shares in Minds + Machines Group, Minds + Machines Group would return to Needly all of the stock it was holding in Needly.

Needly is (or possibly was, judging by its web site) Krueger’s side project, a web site content management software company.
Krueger says M+M agreed to pay $800,000 and take 1% of Needly’s shares under a consulting agreement. Now, he says the company is refusing to return those shares, as agreed, until he admits that he’s already sold the five million “missing” M+M shares.
Here’s his complaint in PDF format.
It’s a strange old case, and no doubt a distraction for new CEO Toby Hall, who took over from Van Couvering last week with a pledge to boost sales by focusing more on the registrar channel.