101domain founders suing Afilias over unpaid $1 million after $15.5 million acquisition

The two former owners of 101domain are suing Afilias over an unpaid $1 million portion of their $15.5 million acquisition deal.
And Afilias is suing them right back, claiming it doesn’t have to pay because the deal left it saddled with an undisclosed tax bill in excess of $1 million.
The suit was filed by Anthony Beltran and Wolfgang Reile, who has since died, in February and Afilias counter-sued a couple of weeks ago, but I only recently became aware of the case and I don’t believe it’s been reported elsewhere.
Afilias bought 101domain back in 2015 for a then-undisclosed sum, its first big push into the registrar side of the industry.
Court documents now reveal that the Ireland-registered company gave 90%-owner Reile and 10%-owner Beltran a combined $12.5 million cash, along with a promissory note to pay $3 million more over the next two years.
Afilias paid them the first $2 million owed in September 2016, but when it came to paying the remaining $1 million the company refused, saying it had discovered 101domain had a VAT liability from before the deal closed of around $875,000.
Last month, after the suit was filed, it re-estimated the alleged liability at over $1 million.
Under the terms of the promissory note, Afilias reckons it does not have to pay up. What’s more, it wants the two men to cover the difference between the money it owes them and the amount of the tax bill.
In their initial complaint (pdf), Reile and Beltran disputed whether the liability even exists, saying “Afilias has failed to provide an adequate accounting for the purported pre-closing VAT liability”.
Reile died April 6, but Afilias filed its counter-complaint (pdf) April 19 and the legal wheels still appear to be turning.
Beltran, who declined to comment on the case, is still listed as 101domain’s president on the registrar’s web site.

Comment Tagged: 101domain, acquisition, afilias

MMX could announce acquisition this week

New gTLD registry MMX could announce plans to be acquired as early as this week.
The company told the markets last week that its delayed 2017 financial results would be announced in “early May”, along with the “conclusion of the strategic review” it has been teasing investors about for almost a year.
The “strategic review”, announced last May, is exploring “how MMX can participate in a broader industry consolidation” including acquisition or merger.
MMX said last week that “constructive discussions continue to progress”.
It has previously described the duration of the negotiations, initially slated to close last September, as “frustrating”.
Unlike AIM-listed rival CentralNic, which has confirmed it is in reverse-takeover talks with KeyDrive, MMX has not revealed which potential buyer(s) it has been talking to.
MMX, also listed on AIM, has a market cap of £69.3 million ($94.3 million) today.
In January, it informally reported that its 2017 billings are expected to be around the $15.6 million mark, allowing the company to hit operating profitability for the first time.
The company runs 25 new gTLDs solo and five more in partnerships with other companies, but by far and a way the best volume performer is .vip, which accounts for well over half of its registrations largely due to its resonance in China.

3 Comments Tagged: acquisition, centralnic, earnings, financials, keydrive, mmx, new gTLDs

Google’s .app gTLD beats .porn to biggest sunrise yet

The sunrise period for Google Registry’s .app gTLD closed today and it looks like it might be the biggest sunrise of the 2012 round to date.
.app had 3,068 domains in its zone file this morning.
While not all will be sunrise registrations, it seems very likely that the new domain has comfortably beaten the previous sunrise record, which according to ICANN records was 2,091, set by ICM Registry’s .porn back in 2015.
One might imagine that the proportion of purely defensive registrations in .app is smaller than .porn; there are already a couple dozen live .app sites indexed by Google.
The median number of sunrise registrations for a new gTLD launch is 77, according to ICANN records.
The .app zone file today is a mash of big app brands such as Uber and Instagram, among a strong showing from software vendors and other industries such as banking and retail.
There are also plenty of entries that can only be defensive, the names of celebrities such as Taylor Swift and Miley Cyrus, and a bunch of dictionary-word domains that look like clear cases of Trademark Clearinghouse gaming.
Now that sunrise is done, .app has entered an Early Access Period modeled on the original Donuts EAP. It lasts seven days and sees the price of retail registration fall from well over $10,000 today to a couple hundred bucks a week from now.
After the EAP is over, retail prices will settle around the $20 mark on May 8.
Google paid $25 million for .app at an ICANN auction, a record at the time since beaten by still-contested .web.

1 Comment Tagged: .app. sunrise, google, google registry, icm registry, porn

Van Gelder remembered in GNSO resolution

Former GNSO Council chair Stéphane Van Gelder, who died last month, has been remembered in a motion passed by the Council on Friday.
The motion noted that Van Gelder was “a well-respected and much liked” member of the ICANN community, “admired for his passion, his fairness, his ability to find the best in people and his true gift for uniting people.”
It recognizes the “significant contribution” he made to the GNSO, his “genuine passion, energy and commitment” to his role, and concludes by offering “heartfelt sympathies to his family and friends”.
I’m reproducing the whole motion, which was obviously passed unanimously, here:

Whereas:

1. 1. Stéphane Van Gelder first entered the domain name business in the late 1990s when he founded Indom, a registrar in France, which later become part of the GroupNBT based in the United Kingdom. It was while Stéphane was General manager of INDOM that he was elected to the GNSO Council by the Registrar Stakeholder Group.
2. 2. Stéphane served on the GNSO Council from 2008 through 2012, as an elected representative of the Registrars Constituency.
3. 3. Stéphane served as Vice Chair of the GNSO Council in 2010 and was elected and served two consecutive terms as Chair of the GNSO Council in 2011 and 2012.
4. 4. As Chair of the GNSO Council, Stéphane was an impartial and neutral facilitator on all issues. For Stéphane, remaining neutral was key to ensuring collective dialogue.
5. 5. Stéphane made significant contributions to ICANN and was a strong and respected community leader. During his tenure as GNSO Chair, Stéphane oversaw and shepherded the:
   1. a. completion of an extensive update of the GNSO’s operating procedures;
   2. b. establishment of the DNS Security & Stability Analysis working group jointly with the ALAC, ccNSO and NRO;
   3. c. completion of the Fast Flux, Post-Expiration Domain Name Recovery and Inter-Registrar Transfer Policy (IRTP) Part B Policy Development Processes (PDPs) and the joint ccNSO-GNSO Internationalized Domain Name working group;
   4. d. launch of the IRTP Part C, Thick WHOIS and Locking of Domain Names subject to Uniform Dispute Resolution Policy Proceedings PDPs; and (e) continuing work on WHOIS studies, registration abuse policies, and multiple other GNSO projects.
   5. e. the completion of the Applicant Guidebook for the 2012 New gTLD Program and the launch of the Program.
   6. f. Stéphane was a well-respected and much liked member of not only the GNSO, but of the broader ICANN Community. He was admired for his passion, his fairness, his ability to find the best in people and his true gift for uniting people.
   7. g. Stéphane’s passing is a great loss to the many people in the ICANN community that had the pleasure to work and interact with him, and for his many friends at ICANN the loss is significant.

Resolved:

1. 1. The GNSO Council wishes to recognize the significant contribution Stéphane made to the GNSO Council during his tenure and his notable achievements during this time.
2. 2. Stéphane’s genuine passion, energy and commitment to the Internet and all that it brought to the world was second to none and we will miss him dearly.
3. 3. On behalf of the current and previous GNSO Councils, we offer our deepest and heartfelt sympathies to his family and friends at this most difficult time.

Van Gelder died after an automobile accident, which also injured his wife, in Switzerland at the end of March.

Comment Tagged: gnso, ICANN, stephane van gelder

$55 billion bank not paying its $6,250 ICANN fees

Kuwait Finance House has become the latest new gTLD registry to get slapped with an ICANN breach notice for not paying its quarterly fees.
The company is a 40-year-old, Sharia-compliant Kuwaiti bank managing assets of $55.52 billion, according to Wikipedia. It has annual revenue in excess of $700 million.
But apparently it has not paid its fixed ICANN dues — $6,250 per quarter — for at least six months, according to ICANN’s breach letter (pdf).
KFH runs .kfh and the Arabic internationalized domain name equivalent .بيتك (.xn--ngbe9e0a) as closed, dot-brand domains.
Neither appears to have any live sites, but both appear to be in their launch ramp-up phase.
ICANN has been nagging the company to pay overdue fees since November, without success, according to its letter.
They’re the third and fourth new gTLD registries to get deadbeat breach notices this month, after .qpon and .fan and .fans.

3 Comments Tagged: .xn--ngbe9e0a, .بيتك, breach, compliance, fees, ICANN, kuwait finance house, new gTLDs

ICANN cancels registrar audit as GDPR headaches loom

ICANN has decided to call off a scheduled audit of its registrar base, to enable registrars to focus on sorting out compliance with the General Data Protection Regulation.
The biannual audit, carried out by ICANN Compliance, was due to start in May. As you likely know by now, May 25 is GDPR Day, when the EU’s privacy law comes into full effect.
In a letter (pdf) to registrars, senior VP of compliance Jamie Hedlund said: “The April 2018 registrar audit round is on hold.”
He added: “We are reviewing the schedule, resources and risks associated with holding a single, larger audit round in autumn of 2018, as well as considering alternative approaches.”
His letter came in response to a plea (pdf) from Registrar Stakeholder Group chair Graeme Bunton, who said an audit that clashed with GDPR deadline would be an “enormous undertaking” for affected registrars.
The audits, which have been running for a few years, randomly select a subset of registries and registrars to spot-check compliance with their Registrar Accreditation Agreements and Registry Agreements.
The program looks at 20-odd areas of compliance, one of which is Whois provision.

Comment Tagged: audit, compliance, gdpr, ICANN, whois

Iceland breaks ranks on Whois, will publish emails

Iceland’s ccTLD has become what I believe is the first registry to state that it will continue to publish email addresses in public Whois records after the General Data Protection Regulation comes into effect.
The move seems to put the registry, ISNIC, in direct conflict with the opinions of European data protection authorities.
The company said in a statement last week that after GDPR comes into effect May 25 it will stop publishing almost all personal information about .is registrants in the public Whois.
However, it broke ranks with other European ccTLDs and the likely ruleset for ICANN-regulated gTLDs, by saying it would not expunge email addresses:

ISNIC will however, at least for the time being, continue to publish email addresses, country and techincal information of all NIC-handles associated with .is domains. Those customers (individuals) who have recorded a personally identifiable email address, and do not want it published, will need to change their .is WHOIS email address to something impersonal.

Registrants will be able to opt in to having their full details published.
ISNIC appears to be taking a principled stand against the Draconian regulation. It said in a statement:

Assuming that GDPR directive applies fully to the “WHOIS” service provided for decades by most ccTLD registries, these new restrictions will lead to less transparency in domain registrations and less trust in the domain registration system in general. ISNIC, as many others, strongly disagrees with the view of the European parlament [sic] in this matter and warns that GDPR, as it is being implemented, will neither lead to better privacy nor a safer network environment.

It’s a surprising decision, given that privacy regulators have indicated that they agree that email addresses are personal data that should not be published.
The Article 29 Working Party told ICANN earlier this month that it “welcomed” a proposal to replace email addresses with anonymized emails or web-based contact forms.

2 Comments Tagged: .is, gdpr, ICANN, isnic, privacy, whois, wp29

auDA wins brief reprieve from boardroom battle

Australian ccTLD registry auDA has managed get a small delay, smaller than it wanted, to the deadline for a special member meeting at which the fate of its chair, CEO and two directors will be decided.
After more than 5% of its membership signed a petition calling for the vote, it had until June 7 to open the polls.
But then it was stung by the findings of a governmental review of its structure, which concluded it was “no longer fit for purpose” and ordering a board shake-up of its own.
Deciding that it had to prioritize the government review, auDA last week sued the main organizer of the petition and former board member Josh Rowe, asking a court to allow it to delay the meeting from June 7 until mid-September, to coincide with its annual general meeting.
But the court told the organization it instead has until July 27 to hold the meeting.
auDA said it was “pleased” with the ruling, but Rowe wrote that auDA had “in effect lost” the case.
Rowe called the brief litigation a “disgraceful waste of tens of thousands of dollars of .au domain name registrant’s money”.

1 Comment Tagged: .au, auda, grumpier.com.au

.com adds 5.5 million names, renewals back over 70%

Verisign reported first-quarter financial results that reflected a healthier .com namespace following the spike caused by Chinese speculation in 2016.
The company Friday reported that .com was up to 133.9 million domains at the end of March, an increase of 5.5 million over the year.
The strong showing was tempered slightly by a further decline in .net, where domains were down from 15.2 million to 14.4 million.
Over the quarter, there was a net increase of 1.9 million names across both TLDs and the renewal rate was an estimated 74.9%, a pretty damn good showing.
Actual renewals for Q4, measurable only after Verisign announced its earnings, were confirmed at 72.5%, compared to a worryingly low 67.6% in Q4 2016.
In a call with analysts, CEO James Bidzos confirmed that the turnaround was due to the surge in Chinese domainer speculation that drove numbers in 2016 finally working its way out of the system.
In Q1, the cash-printing company saw net income of $134 million, compared to $116 million a year earlier, on revenue up 3.7% at $299 million.
Bidzos told analysts that it’s “possible” that the company may get to launch .web in 2018, but said Verisign has not baked any impact from the contested gTLD into its forecasts.

1 Comment Tagged: .com, .net, .web, earnings, verisign

Muslim world still thinks .islam isn’t kosher

The Organization of Islamic Cooperation has repeated its objection to the gTLDs .islam and .halal ever seeing the light of day.
OIC Secretary General Yousef Al-Othaimeen wrote to ICANN earlier this month to declare that its position on the two controversial applications has not changed since it initially objected to them in 2013.
The OIC comprises the foreign ministers from 57 majority-Muslim countries and these ministers recently voted unanimously to re-adopt the 2013 objection, Al-Othaimeen said (pdf).
The group “maintain the position that the new gTLDs with Islamic identity are extremely sensitive in nature as they concern the entire Muslim nature” he wrote.
He reiterated “official opposition of the OIC Member states towards the probable authorization that might allow the use of these gTLDs .islam and .halal by any entity.”
This puts ICANN between a rock an a hard place.
The applicant for both strings, Turkish outfit Asia-Green IT Systems (AGIT), won an Independent Review Process case against ICANN last November.
The IRP panel ruled that ICANN broke its own bylaws when it placed .islam and .halal into permanent limbo — an “On Hold” status pending withdrawal of the applications or OIC approval — in 2014.
ICANN’s board accepted the ruling and bounced the decision on whether to finally approve or reject the bids to its Board Accountability Mechanisms Committee, which is currently mulling over the problem.
Technically, it’s “non-consensus Governmental Advisory Committee advice”, which means the board has some wriggle room to simply accept the advice and reject the applications.
But AGIT’s lawyer disagrees, recently telling ICANN (pdf) its options are to approve the bids or facilitate dialogue towards their approval, rather like ICANN is doing with .amazon right now.

1 Comment Tagged: .halal, .islam, agit, asia green it system, gac, ICANN, irp, new gTLDs, oic