ICANN smacks new gTLDs for pre-sunrise auctions

Running a premium domain name auction before you’ve finished your new gTLD sunrise period is Officially Not Cool, according to ICANN’s compliance department.
People who won premium new gTLD domains in auctions that took place before sunrise periods now face the possibility of losing their names to trademark owners.
.CLUB Domains, and probably XYZ.com, operators of .club and .xyz, two of the highest-volume new gTLDs to launch so far, appear to be affected by the ICANN decision.
ICANN told .CLUB that its “winter auction“, which took place in late February, may have violated the rules about allocating or “earmarking” domains to registrants before sunrise takes place.
Meanwhile, NameJet has cancelled the auction for deals.xyz, which “sold” for $8,100 late last year, suggesting that .xyz’s pre-sunrise auction is also considered ultra vires.
ICANN told .CLUB that its auction sales “constitute earmarking” in violation of the rule stating that registries “must not allow a domain name to be allocated or registered prior to the Sunrise period”.
.CLUB had told its auction winners that a sunrise period registration would prevent them from getting the domain they wanted and that they would be refunded if a sunrise registrant emerged.
But ICANN evidently told the registry:

Irrespective of whether “[a]llocation was expressly conditioned upon any Sunrise claim,” or whether any Sunrise claim was made, the pre-selection, pre-registration or pre-designation to third parties, in this case via .Club Domains’ “winter auction,” constitutes improper allocation.

I kinda thought this would happen.
Back in November, when XYZ.com ran its first .xyz auction — about six months before its sunrise even started — CEO Daniel Negari told us he believed it was “comfortably within the rules“.
We said the auction “seems to be operating at the edge of what is permissible under the new gTLD program’s rights protection mechanisms, which state that no domains may be allocated prior to Sunrise.”
I’ve not yet been able to definitively confirm that .xyz is affected by this ICANN decision, but .club definitely is.
.CLUB Domains told its auction winners today that the names they won are now subject to a 60-day period during which they could be obtained by trademark owners.
If no trademark owner claims the name, .CLUB said it will give the auction winner a 10% rebate on their purchase price.
The email states:

We are placing the domain on hold for 60 days, during which time a Trademark Clearinghouse (TMCH) holder will have the opportunity to purchase the domain at Sunrise rates. Although, the domain is not currently in the TMCH, if a trademark holder should file in the TMCH over the next 60 days, the domain will be offered to that registrant. However, if the name is not claimed by filing in the TMCH over the next 60 days, your transaction will move forward as planned.
Although we disagree with ICANN compliance’s position on this matter, the actions we are taking are necessary to ensure that we are not offside with ICANN compliance in any way. We understand that you have been caught in the middle of this issue due to no fault of your own. Given these circumstances, we are offering you two options:
1) Should you decide to complete this transaction, we will issue you a payment of 10% of the purchase price after the transaction closes in 60 days, assuming the name is not registered by a TMCH mark holder because of the delay.
2) At any time during the 60 day period you have the option to rescind the auction bid and not purchasing the domain.

.berlin rockets to 116k on free domain offer

A promotion from dotBERLIN saw .berlin more than double its registration count yesterday, as speculators (apparently) swooped to claim over 61,000 free domain names.
The new gTLD ended the day with 115,966 domains in its zone, up 67,347 or 138% on the day.
That makes it the number two new gTLD again, snipping at the heels of .xyz, which has 144,474 names.
But, like .xyz, the numbers are not an accurate reflection of demand.
Giving away free domains seems to be the way to go if you want to quickly rack up your registration count with scant regard for actual end user purchases or renewal rates.
dotBERLIN said yesterday that it was celebrating 50,000 registrations with a five-day offer seeing registrars sell the names for no more than €5.55 ($7.53).
But some registrars are actually offering them for free.
InternetX is one such registrar, and it appears to have taken the vast, vast majority of all the new .berlin registrations yesterday.
Digging into name server records, it appears that at least 61,000 names were registered via InternetX-owned registrars. Of those, over 23,000 appear to have been registered to a single domainer.
InternetX, to the best of my knowledge, wasn’t forcing the domains on its customers, which is what Network Solutions did with .xyz.
According to its web site, the offer was limited to 50 domains per customer, though there appears to be an option to purchase obtain more.
The domainer with the cache of 23,000 names appears to be an InternetX reseller.
The numbers are big, and they may well convert into revenue-generating renewals for dotBERLIN, but right now I don’t think they’re especially reflective of demand among end user registrants.

How NetSol opts you in to cybersquatted .xyz names

Clear-cut cases of cybersquatting seem to be among those .xyz domain names that Network Solutions has registered to its customers without their explicit request.
Some of the domains I’ve found registered in .xyz, via NetSol to the registrants of the matching .com or .net names, include my-twitter.xyz, facebook-liker.xyz and googledia.xyz.
Domains including other brands, such as Rolex, Disney, iPhone, Amazon and Pepsi can also be found registered to third parties, via NetSol, in .xyz’s zone today.
They’re all registered via NetSol’s Whois privacy service, which lists the registrant’s “real” name in the Whois record, but substitutes mailing address, email and phone number with NetSol-operated proxies.
I think the chance of these names being paid for by the registrant is slim. It seems probable that many (if not all) of the squatty-looking names were registered via NetSol’s promotional program for .xyz.
As previously reported, NetSol has been giving away domain names in .xyz to owners of the matching .com names. Tens of thousands of .xyz names seem to have been registered this way in the last week.
The “registrants” did not have to explicitly accept the offer. Instead, NetSol gave them the option to “opt-out” of having the name registered on their behalf and placed into their accounts.
The effect of this has been to propel .xyz into the leading spot in the new gTLD league table. It had 82,236 names in today’s zone file. a clear 15,000 names ahead of second-place .club.
But it’s not clear how much, if any, support NetSol has received from the registry, XYZ.com. CEO Daniel Negari told Rick Schwartz, in a coy interview last week:

The Registry Operator is unable to “give away” free domain names. I never even saw the email that the registrar sent to its customers until I discovered it on the blogs.

The opt-out giveaway has also prompted speculation about NetSol’s right to register domains without the explicit consent of the registrant, both under the law and under ICANN contract.
Under the Registrar Accreditation Agreement, in order to register a domain name, registrars “shall require” the registrant “to enter into an electronic or paper registration agreement”.
That agreement requires the registrant to agree to, among many other things, the transfer or suspension of their domains if (for example) they lose a UDRP or URS case.
But that doesn’t seem to be happening with the opt-out names,
Barry Shein, president of The World, had shein.xyz registered on his behalf by NetSol on Saturday. He already owns shein.com, also registered with NetSol.
NetSol’s email informing him of the registration, which Shein forwarded to DI, reads as follows:

Dear Valued Network Solutions Customer,
Congratulations, your complimentary SHEIN.XYZ domain has arrived!
Your new .XYZ domain is now available in your Network Solutions account and ready to use. To go along with your new .XYZ domain, you have also received complimentary access to Professional Email and Private Registration for your .XYZ domain.
If you choose not to use this domain no action is needed and you will not be charged any fees in the future. Should you decide to keep the domain after your complementary first year, simply renew it like any other domain in your account.
We appreciate your business and look forward to serving you again.
Sincerely,
Network Solutions Customer Support
www.networksolutions.com
http://www.networksolutions.com/help/index.jsp

Importantly, a footnote goes on to describe how NetSol will take a refusal to opt out as “continued acceptance” of its registration agreement:

Please note that your use of this .XYZ domain name and/or your refusal to decline the domain shall indicate acceptance of the domain into your account, your continued acceptance of our Service Agreement located online at http://www.networksolutions.com/legal/static-service-agreement.jsp, and its application to the domain.

So, if you’re a NetSol customer who was picked to receive a free .xyz name but for whatever reason you don’t read every marketing email your registrar sends you (who does?) you’ve agreed to the registration agreement without your knowledge or explicit consent, at least according to NetSol.
I am not a lawyer, but I’ve studied enough law to know that this is a dubious way to make a contract. Lawyers I’ve shown this disclaimer to have laughed out loud.
Of course, because each registrant already owns a matching .com, they’ve already accepted NetSol’s registration agreement and terms of service at least once before.
This may allow NetSol to argue that the initial acceptance of the contract also applies to the new .xyz domains.
But there are differences between .com and .xyz.
Chiefly, as a new gTLD, .xyz registrants are subject to policies that do not apply to .com, such as the Uniform Rapid Suspension policy.
URS differs from UDRP in that there’s a “loser pays” model that applies to complaints involving over 15 domains.
So these .xyz registrants have been opted into a policy that could leave them out of pocket, without their explicit consent.
Of course, we’re talking about people who seem to be infringing famous trademarks in their existing .com names, so who gives a damn, right?
But it does raise some interesting questions.
Who’s the registrant here? Is it the person who owns the .com, or is it NetSol? NetSol is the proxy service, but the .com registrant’s name is listed in the Whois.
Who’s liable for cybersquatting here? Who would Twitter file a UDRP or URS against over my-twitter.xyz? Who would it sue, if it decided to opt for the courts instead?

.xyz is now the biggest new gTLD (kinda)

The controversial new gTLD .xyz is now officially the biggest, with 67,504 domains under management.
That’s according to today’s zone files, which see former number ones .club at 65,630 and .guru at 60,480.
Due to what appears to be an ICANN screw-up, there were no zone files available for any new gTLDs via the Centralized Zone Data Service yesterday, so I can’t tell you what the daily growth numbers are.
But .xyz had 36,335 names in its zone on Wednesday. It’s grown by 85% in two days.
That’s a shocking, unprecedented growth spurt.
The question is, of course, how many of these registrations are legit?
.xyz has come under a great deal of fire from domainers the last few days, after it emerged that the majority of its growth in the first days of general availability was questionable.
Network Solutions, it transpired, had seriously inflated .xyz’s numbers by registering .xyz names matching existing .coms on behalf of its customers without their permission and for no charge.
NetSol seems to have paid .xyz a few hundred thousand dollars for domain names its customers have not requested.
Data from today’s .xyz zone file is likely to reinforce the perception that most of .xyz’s apparent popularity is bogus.
I see that 56,019 domain names in .xyz today — 82% of the gTLD’s total — are using register.com name servers.
Those name servers belong to Web.com, NetSol’s parent company.
There were 27,000 such names on Wednesday. While .xyz as a whole has grown by about 31,000 names in two days, NetSol’s .xyz share has grown by about 29,000 names.
Nobody believes that NetSol, with its $40 retail price for .xyz (with a wholesale price I peg at around $6 to $7), could have obtained this market share with actual, paid-for sales.
I believe that the large majority of NetSol’s roughly 56,000 .xyz names are freebies, not reflective of buyer demand.
Many domainers are incandescent about this.
They look to registration numbers as a measurement of demand, which could be a predictor of the resale market for a TLD, so they’re upset at anything that looks like a manipulation of that number.
Daniel Negari, the charismatic CEO of .xyz, has borne the brunt of this criticism, despite the fact that there’s no evidence out there yet that .xyz supported or had prior knowledge NetSol’s mass giveaway.
Negari has so far refused to comment on the situation (he hasn’t responded to several inquiries from yours truly), which has only served to reinforce the suspicion that the registry was somehow complicit in NetSol’s promotion and used the registrar to artificially inflate its numbers.
I have no evidence one way or the other.
NetSol refused to even confirm the existence of the promotion when DI inquired earlier this week.

.xyz launch inflated by massive NetSol giveaway

Network Solutions gave away thousands of .xyz domain names for free to people who hadn’t requested them, artificially inflating the new gTLD’s launch day numbers.
As of last night, there were 36,335 domains in the .xyz zone, with something like 27,000 listed as having name servers belonging to NetSol and its parent, Web.com.
Before .xyz launched, only 1,287 new gTLD domains used NetSol name servers.
What this means is that for some reason thousands upon thousands of .xyz domain names were registered via one of the industry’s more expensive registrars.
That reason, as Mike Berkens at The Domains scooped, is that many names were given away for free to existing NetSol customers.
Not only that, but the giveaway was opt-out — if you were selected for the promotion you had to click a link in an email in order to prevent NetSol registering the .xyz that matches your .com.
So not only did the registrants of a significant portion of .xyz’s new registrations not pay for their names, they didn’t even request them.
A lot of garbage strings — some of which have matching .coms I suspect are being used for nefarious purposes — have therefore made it into .xyz’s zone alongside many decent-enough names.
When I asked NetSol, a spokesperson refused to confirm the giveaway, calling it a “market rumor”. This is apparently the kind of promotion you don’t want anyone hearing about.
It’s not clear how many of these 27,000 names were genuine registrations and which were part of the promotion, but I suspect, given NetSol’s prior performance in new gTLDs, that the vast majority were freebies.
This has happened before.
About 10 years ago, Afilias temporarily dropped its first-year price for .info to zero dollars, hoping to attract more registrations and paying renewals.
Instead, eNom decided to register a million .info names matching its customers’ .com names, put them in its customers’ accounts, and park the lot.
A year later, over 99% of those names were allowed to expire by registrants who hadn’t requested them in the first place.
The difference in this case seems to be that .xyz itself is still getting paid its registry fee for each of the names NetSol gave away.
But if history is any guide, .xyz’s numbers could be in for a big drop 15 months from now.

.xyz launch crashed CentralNic

The launch of .xyz took back-end provider CentralNic’s registry down for 15 minutes on Monday.
That’s according to an email sent by the company to registrars, copies of which were forwarded to DI today.
The email says that CentralNic’s EPP systems were down between 1603 and 1618 UTC on Monday, just a few minutes after .xyz went into general availability. It goes on to say:

The large volume of EPP commands exceeded our database system’s capacity to handle them, causing a bottleneck which then propagated back to the EPP application servers.
As you know, we have launched a number of SLDs and TLDs in the past; this is the first launch that we have experienced any issue with, despite some of our previous launches being of comparable size.

.xyz took almost 15,000 registrations in its first 10 hours, many of which will have been concentrated in those first few minutes.
CentralNic said it intends to put in place some measures to prevent a similar crash when it handles .ink’s launch day for Top Level Design on June 23.
Registrars will have their number of simultaneous connections to the registry limited, the email says. CentralNic will also turn off some functions of the database for the short duration of the initial surge.
The company added that the time of registration recorded by registrars may be out of whack with the time recorded by the registry as a result of the outage.

Was I wrong? .xyz claims 31,000 regs on day one

.xyz’s first full day of general availability saw it total 31,119 registrations, suggesting that it’s not doing as badly as I suggested in a post earlier today.
Today’s .xyz zone file shows 14,924 names, up 14,829 on the day, but Gavin Brown, CTO of .xyz back-end CentralNic, just commented that the 24-hour number is actually 31,119.
The zone files for each new gTLD are made available by ICANN — assuming the Centralized Zone Data Service is working — at 0100 UTC every day. Brown said that .xyz’s file today was generated an hour later.
That means the 14,924 total represented the first 10 hours of GA, as indicated in my original piece today.
For a new gTLD to sell more domains in the second half of its first GA day than during the first is unusual, because gTLD launches to date have tended to rely quite heavily on pre-orders.
Pre-orders, a decent measure of demand, generally hit the registry within the first few minutes of general availability, as registrars try to secure the names their customers want.
That has the effect of stacking first-day registrations heavily towards the first few hours of GA.
Take .club, for example. It sold 25,776 names in its first 10 hours. But 24 hours later that number had crept up to just 30,680, an increase of just 4,904.
Similarly, TLD Registry’s .在线 moved just shy of 20,000 names in its first 12 hours of general availability, but had sold only 1,000 more names a full 24 hours later.
I didn’t think it unreasonable to assume that .xyz would follow the same pattern, but this front-loading doesn’t seem to have happened in .xyz’s case.
Did I make a faulty assumption?
If registrations are indeed coming in at a more measured pace than preceding launches, then .xyz may not be falling behind CEO Daniel Negari’s aggressive growth targets at all.
Was I wrong to say that .xyz hasn’t lived up to the hype? Maybe. We’ll need some more days of data to be sure.

.xyz fails to live up to the hype

.xyz sold just shy of 15,000 domain names during its first hours of general availability.
That’s according to zone files released today.
The registry added 14,829 names yesterday, ending the period with 14,924 in its zone, making it the 15th-largest new gTLD by volume, behind the likes of .center, .directory and .solutions.
(UPDATE: see the bottom of this post for important updates on these numbers.)
While it’s a respectable first-day performance — logging more sales that I expected it to — it’s doesn’t look like the registry is going to hit CEO Daniel Negari’s target of a million names in year one.
Earlier this week, Negari enthusiastically blogged, in a post tagged simply “believe”:

There is no doubt in my mind that the growth rate of .xyz will surpass the growth rate of .com. It won’t take us 20 years to reach one million registrations. It will only take 1 year. The growing number of internet users online today, the increasing demand for domain name registrations, and the way we have positioned .xyz all validate this projection. Soon we will see that there is only one competitor to .com, and that is .xyz.

Averaged out over a year, a million registrations is over 2,700 per day, a rate that no other new gTLD registry has managed to sustain to date.
If .xyz follows the path taken by its predecessors, it will probably rack up a thousand or so more names per day for the next few days, likely making it a top-ten new gTLD within a week, before settling down to a comfortable rate of 200 to 300 per day.
So far, .guru (four months old) and .club (one month old) are the only gTLDs with significant volumes that have managed to double their launch-day figures.
.xyz is going to be in desperate need of some more marketing if its wants to get to one million by June 2, 2015.
As I’ve always said, I think .xyz is a tough sell.
As Negari says, the string has “little-to-no meaning”, and the game has always been to brand .xyz as being even more generic than .com.
The registry has attempted to shoehorn it into meanings such as “It is the ending of the alphabet, and it is the ending of domain names” and “Generations X, Y and Z”.
But it seems to be one of those sales pitches you either get or you don’t. I’ve heard it many times, and I still don’t.
So 15,000 names in half a day, by my expectations, is not bad.
However, despite the 15,000 names, we’re talking about a TLD with a sub-.com registry fee, being retailed by some registrars for under $10.
With a million names, that’s a nice little business. Sub-100,000, not so much.
There are plenty of people out there who will immediately say the “success” of new gTLDs in general is a combination of many factors, of which volume is only one, and I agree.
It’s only day one for .xyz, but for a cheap-as-chips gTLD that has explicitly made itself a volume play, I think registration count is a fair way to measure its success going forward.
UPDATE: According to Gavin Brown, CTO of .xyz back-end CentralNic, the number of names in the zone file almost 24 hours after GA began is actually 31,119, over double what the registry sold in the first 10 hours.

Are these the 10 most-popular new gTLD domains?

I’m a firm believer that the success of new gTLDs will be measured not just in registration volumes but also in usage, and usage is a lot trickier to measure than domains under management.
One way of measuring usage that’s very familiar to many domainers is Alexa, the Amazon-owned web metrics service that uses toolbars and other data sources to rank web sites by popularity.
This kind of popularity data has been incorporated into TLD Health Check for some time, as one of many means to compare TLDs.
Alexa data isn’t perfect, but it is data, so I thought it might be interesting to see which of the 147 new gTLDs currently in the root are showing up in its daily list of the top one million domains.
There are 10 names, half of which are .guru domains, on yesterday’s list. There are not many functioning web sites yet, but for whatever reason these domains all, according to Alexa, have traffic.
These are the domains, with their popularity rank in parentheses:
www.link (356,406)
The highest-ranking new gTLD domain on our list is actually banned by ICANN due to the purported risk of name collisions.
It’s reserved by Uniregistry and will not resolve or be made available for registration for the foreseeable future.
I think what we’re looking at here is a case of somebody (or more likely lots of people) using www.link in web pages when they really should be using example.com.
beatport.singles (538,603)
Possible cybersquatting? Beatport (I’m old and unhip enough that I had to Google it) is an online electronic music store and the domain is registered via Go Daddy’s Domains By Proxy service.
The domain presumably refers to music “singles” rather than marital status, but it doesn’t seem to resolve from where I’m sitting. Quite why it’s getting traffic is beyond me. A typo in a URL somewhere? IP lawyers?
gtu.guru (589,205)
The first resolving name on our list leads to a work-in-progress Blogger blog. It’s registered to a chap in Gujarat, India, leading me to infer that GTU is Gujarat Technological University. Another squat?
seo.guru (671,647)
The first domainer on the list, I believe. The guy who registered seo.guru paid roughly $2,500 for it during Donuts’ first Early Access Program. It’s currently parked at Go Daddy.
I’d hazard a guess that it’s on the list because it’s a dream URL for an SEO professional (or charlatan, take your pick) and SEOs checking its availability are much more likely to have the Alexa toolbar installed.
deals.guru (790,778)
This one resolves to an under construction page.
I’d speculate that the pre-release $8,100 sale of deals.xyz caused a lot of domainers to check out whether the same second-level was available in other new gTLDs, spiking its traffic and causing an Alexa appearance.
nic.club (796,727)
The only registry-owned domain on our list — nic.club is the official registry web site of .CLUB Domains, which has its .club gTLD in sunrise until the end of March.
Is its appearance on the list indicative of strong pre-launch marketing or something else?
beekeeping.guru (857,778)
I’m not making this stuff up. This domain belongs to a British pest control company but resolves to a default Apache page. I can’t begin to guess why it’s getting traffic.
cp.wien (864,800)
An unregistered name in a sunrise gTLD. Possible name collision?
shop.camera (873,146)
Hot dang, we have a web site!
The domain shop.camera was only registered 10 days ago, but it already leads to what appears to be a fully-functioning Amazon affiliate site, complete with “Shop.Camera” branding.
freebitcoin.guru (994,404)
An email-gathering affiliate marketing site that I personally wouldn’t touch with yours. Still, it looks quite slick compared to the others on the list and it appears that the owner has made some effort to promote it.

Our unpredictions for 2014

Over the close to four years we’ve been publishing, DI has so far resisted running annual prediction lists.
As a reader, they always strike me as being largely holiday-period filler guff. As a writer, they kind of obligate you to revisit and score yourself a year later. Hugely embarrassing pain in the bum.
But this year we’ve had a change of heart.
It’s really, really quiet out there today.
So here’s our list of events we think will definitely, definitely, definitely happen in 2014.

• Bob Parsons will give ten bucks to a homeless guy outside a Scottsdale Starbucks, according to a Go Daddy press release.
• NomCom, hands tied by its gender quotas policy, will be forced to appoint a minor Kardashian to the ICANN board of directors.
• Pat Kane will quit Verisign in order to head up kp.com, the newly launched sub-domain service for North Koreans who couldn’t get the .kp name they really wanted.
• A pseudonymous domainer will send TLDH’s share price into a death spiral by predicting that “all new gltds will fail lol” in a comment on an industry blog.
• Tucows CEO Elliot Noss will accidentally blind four people during a particularly enthusiastic bout of gesticulation.
• An ICANN director will answer Paul Foody’s question during the Public Forum in Singapore. Foody will leave the room moments later, never to be seen again.
• Somebody will write a blog post about 27-year-old .xyz applicant Daniel Negari without mentioning his age.
• ICANN will blame a “glitch” after accidentally delegating .islam to a New York synagogue.
• Mike Berkens will use apostrophes correctly for a week straight.
• After the GNSO dies for the fifth time, the entire Council will regenerate as Peter Capaldi, forcing an immediate structural review.
• 1&1 will start selling pre-registrations in new gTLDs that it expects will probably be applied for at some point between 2018 and 2024.
• Fox will green-light the production of “Jeff Neuman vs Predator”.
• DotConnectAfrica will finally withdraw its application for .africa, but only after failed attempts to withdraw applications for .africas, .africka, and .dotdotafrica.
• Christine Jones will suffer a humiliating wardrobe malfunction during a campaign rally.
• A smartphone-friendly version of DI will be launched.
• During an unannounced visit to ICANN’s LA office, Fadi Chehade will stumble across John Jeffrey fucking an apple pie in the staff kitchen.
• Jennifer Wolfe will speak during a GNSO Council meeting.
• The Intellectual Property Constituency will complain that ICANN’s latest rights protection mechanisms “go too far to protect trademark owners” and demand an immediate rollback.
• Rick Schwartz will invest $200 million in Donuts.
• The sentence “Esther Dyson declined to comment.” will appear in a mainstream media article about new gTLDs.

Happy new year everyone!