Donuts officially richer than God after winning three new gTLD auctions

Donuts has a clear path to being awarded the .church, .life and .loans new gTLDs, following a private auction managed by Innovative Auctions this week.
Life Covenant Church and CompassRose.life have already withdrawn their applications for .church and .life respectively, and others are expected to follow soon.
Life Covenant Church, which does business at LifeChurch.tv, was described as the largest multi-site church in the US last year, with 46,000 regular attendees across 15 locations.
A lucrative business, no doubt. But apparently not lucrative enough to beat Donuts.
In the three-way contention set for .life, Donuts beat CompassRose.life, which seems to be affiliated with a Canadian housing developer and Xiamen 35.com Technology.
In .loans, which still faces Governmental Advisory Committee advice, Donuts beat fellow portfolio applicant Radix.
The losing applicants will all receive pay-offs from Donuts as a result of losing the auctions.
Innovative has now helped resolve 21 contention sets.

ICANN publishes accelerated gTLD auction timeline

ICANN has cut the anticipated length of its “last resort” new gTLD auctions in half, last night publishing a schedule that would take 10 months and end in early 2015.
The draft schedule and auction rules, put together by selected auctioneer Power Auctions, would see 10 monthly batches of auctions, with 20 contention sets resolved per month.
The revised rules, which are open for public comment, read:

It is anticipated that Auctions will be conducted once per month to resolve 20 Contention Sets per Auction, with the intention to complete all Auctions within one (1) year from the date of the first Auction.

It’s still anticipated that auctions will begin in March 2014.
That’s a lot better for applicants than the original plan, which was to limit each applicant to only five auctions per month. Due to Donuts’ large portfolio, that would have stretched the process out to April 2016.
An accompanying schedule (pdf) published last night actually batches up 201 of the remaining contested gTLDs into 10 buckets, so most applicants now know where they stand.
It’s good news for applicants that have high priority numbers but are in contention sets with applicants with low priority numbers — they’ll get bumped to the front of the queue.
For example, dot Buy Limited drew 1,883 in the prioritization lottery, but will be in the first monthly auction because it’s up against Amazon, with priority number 128, for .buy.
There’s still no news about how ICANN will handle indirect contention, however.
While the schedule has placed the likes of .unicom and .unicorn — which were found similar by evaluation panels — in the same auction, it does not yet reflect the results of objections that should (in theory) place different strings in the same contention set.

Could new gTLD auctions last until April 2016?

April 2016. That’s the likely date of the final new gTLD contention set auction under the rules currently anticipated by ICANN.
As you might imagine, many applicants are not happy about this.
In a series of presentations over the last couple of weeks, ICANN has laid out how it sees its “last resort” auctions playing out.
Preliminary timetables have been sketched out, from which three data points are noteworthy:

• Auctions will start in “early March” 2014.
• There will be one “auction event” every four weeks.
• Applicants can bid on a maximum of five gTLDs per auction.

Currently, the applicant in the most contention sets is Donuts, as you might have guessed given the size of its portfolio. By my reckoning it’s currently contesting 141 gTLD strings.
With a March 1 date for the first auction, and taking into account the aforementioned timing restrictions, it would be April 23, 2016 before the final Donuts contention set is resolved.
That’s four years after the application window closed.
Google would be in auctions until January 2015. TLDH, Uniregistry and Amazon’s contested strings would be tied up until at least October next year.
This is obviously terrible news for applicants competing with portfolio applicants where the contention set has quite a high position in ICANN’s prioritization queue.
A year or two is a long time to wait — burning through your funding and not taking in any revenue — if you’re a single-string applicant on a tight budget. Every dollar spent waiting is a dollar less to spend at auction.
According to ICANN, applicants will be able to waive the five-gTLDs-per-month maximum.
But that only seems to help the larger portfolio applicants, which will be seeing revenue from launched, uncontested gTLDs and could take the opportunity to starve out their smaller rivals.
Auctions themselves are shaping up to be a controversial subject in general, with several community members taking the mic at the ICANN 48 Public Forum last week to call for ICANN to change the process.
A few people pointed the ICANN board to the recent withdrawal of DotGreen — a popular but evidently poorly funded community effort — from the new gTLD program as a harbinger of things to come.
“By not allowing applicants to be in more than five auctions simultaneously it means those applicants, particularly portfolio applicants, are not going to be able to move through their contention sets,” Google policy manager Sarah Falvey said at the Forum.
“It drags in all the single applicants, because they’re stuck on that exact same time schedule and can’t move their applications through as well,” she said, adding that ICANN should create a new process that sets the time limit for auctions at about six months.
“People could be waiting two years to delegate through no fault of their own,” she said.
Later responding to Afilias director Jonathan Robinson, who backed up Falvey’s call for an accelerated schedule, ICANN president of generic domains Akram Atallah said that the rules are not yet set in stone.
The five-a-day rule was created to give applicants the ability to plan payments better, he said, and ICANN is still soliciting input on how the system could be improved.

XYZ says auctions “comfortably within the rules”

New gTLD registry XYZ.com has responded to criticisms of its plan to auction .xyz and .college names with NameJet before they even have signed contracts with ICANN.
CEO Daniel Negari told DI that the plan to auction 40 names between now and the end of February, is “comfortably within the rules”.
The company 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.
But Negari said in an email interview that nothing will be “allocated” before its Sunrise periods are done:

the buyers at auction are not buying the domain names as in a normal auction. They are buying an option to force us to allocate them the domain after the Sunrise Period for the auction price assuming various contingencies are met — such as us being able to allocate the name in the future, the name being available after sunrise, the name not being blocked-out because of name collisions and so on.

He went on to say that the 40 names being put to auction are being drawn from the 100 names the recently redrafted Registry Agreement says registries are allowed to allocate to themselves “necessary for the operation or the promotion of the TLD”.
There’s also the potential problem that neither TLD has yet received its list of name collisions, which are likely to contain thousands of strings that the registry must block at launch.
As we’ve seen with the gTLDs that already have their lists, many desirable second-level strings are likely to be blocked, which could clash with names XYZ is planning to auction.
But XYZ seems to have access to the Day In The Life Of The Internet data from which these lists are compiled, and Negari said that the names it is auctioning off do not appear.
“We think these auctions are a great way to both promote our TLD as anticipated by ICANN in the RA and to bring increased innovation to the space in line with ICANN’s stated goals for the new gTLD program,” Negari said.

NameJet to auction new gTLD domains before they launch

Many registrars are already offering new gTLD pre-registrations, now NameJet has taken the idea one step further: it’s going to auction premium names months before the gTLDs even go live.
It’s just announced a deal with XYZ.com, which is on track to run the .xyz and .college registries, to sell 40 “premium” domain names this month. In fact, according to its press relase, the first auction started on Wednesday.
These two new gTLDs are uncontested but do not yet have Registry Agreements with ICANN, and have not passed pre-delegation testing or any of the other pre-launch prerequisites.
The companies said they due to go live next year.
Some of the domains to be auctioned include: loans.college, scholarships.college, vacations.xyz, insurancequotes.xyz, students.college, jobs.college, auctions.xyz and health.xyz.
NameJet said it expects the auctions to be wrapped up by the end of February.

Contention questions remain as ICANN reveals “last-resort” auction rules

ICANN has published a first draft of the rules for its “last resort” new gTLD auctions, but they do not yet address the contention created by controversial objection rulings.
The organization has hired Power Auctions to write the rules and manage the auctions.
They’ve agreed upon an “ascending clock” style, where the auctioneer sets upper and lower limits for each round of bidding. Applicants must bid within that range or withdraw — they cannot skip rounds.
A bid at the top of the round’s range is a “continue bid” that sees the applicant through to the next round. Lower, and it’s an “exit bid” that will count as a withdrawal if anyone else submits a higher bid.
When all but one applicants have withdrawn, the remaining applicant gets the gTLD, paying ICANN an amount equal to the highest exit bid submitted by a competitor in that round.
Unlike the private auctions that have been taking place for the last few months, losing applicants walk away empty-handed apart from a small application fee refund from ICANN.
Applicants’ bidding limits will be determined by their deposits. If your deposit is under $2 million, your bid ceiling is 10x your deposit, but if you put down $2 million deposit or more, there would be no upper limit.
It all seems fairly straightforward for direct, single-string contention sets.
Where it starts to get fuzzy is when you start thinking about “indirect” contention and multiple, connected auctions running simultaneously.
It’s a little tricky to explain indirect contention without diagrams, but let’s try an example, using .shop, instead.
There are nine applicants for .shop. These are all in direct contention with each other.
But one .shop applicant, Commercial Connect, won objections against applicants for “similar” strings — Amazon’s .通販 and Donuts’ .shopping.
Assuming ICANN upholds these objection findings, which seems increasingly likely given recent statements from generic domains president Akram Atallah, both .shopping and .通販 will be in direct contention with Commercial Connect’s .shop and in indirect contention with all the other .shop applications.
Complicating matters, while Amazon’s .通販 is uncontested, Donuts’ .shopping is also in direct contention with Uniregistry, which applied for the same string but did not lose an objection.
It will be quite possible for .shop, .shopping and .通販 to all be delegated, but only if Commercial Connect loses the auction for .shop or otherwise withdraws from the race.
The auction materials published by ICANN today are a bit fuzzy on what happens when indirect contention is in play. On the one hand it suggests that multiple applications can win an auction:

When a sufficient number of applications have exited the auction process, so that the remaining application(s) are no longer in contention with one another, and all the relevant string(s) can be delegated as gTLDs, the auction will be deemed concluded.

But the rules also say:

the rules set forth within this document will assume that there is direct contention only, a condition that holds for the substantial majority of Auctions. In the event that an Auction will include a Contention Set that does not satisfy this condition, ICANN or the Auction Manager may issue an Addendum to the Auction Rules to address indirect contention.

While it seems that the auctions for .shop, .shopping and .通販 would have to take place simultaneously due to the indirect contention, some weird edge cases have me confused.
ICANN’s list of indirect contention sets is currently empty.
It’s not at all clear to me yet whether, for example, Donuts’ .shopping application would be placed in the .shop auction or whether two separate auctions would be conducted.
That could be important because deposits — and therefore bidding limits — are specific to each auction.
Would Donuts have to stump up $4 million in deposits, rather than $2 million, just in order to win one string? Would Commercial Connect have to put down $6 million for three auctions for one string?
If the two .shopping applicants are placed in the .shop auction, and Commercial Connect withdraws first, would Donuts have to carry on bidding against the other eight .shop applicants, just to win .shopping?
I’m guessing not, but the rules don’t seem to envisage this scenario yet.
What about Uniregistry, which has an application for .shopping? Will ICANN force it into the .shop auction even though it’s not in direct contention with any .shop applicant?
If .shop and .shopping are two separate auctions, what happens if Commercial Connect withdraws from the .shop auction but not the .shopping auction? It would have little to gain — not being a .shopping applicant — but could it artificially bid up the .shopping set?
And could how these auctions play out have an impact on companies’ objection strategies in future rounds?
If Uniregistry, say, finds itself at a disadvantage because its .shopping competitor Donuts was objected to by Commercial Connect, maybe it would make sense for an entire direct contention set to cooperate to fight off an objection from an applicant for a similar string.
And if Commercial Connect finds itself financially hobbled by having to participate in three auctions rather than one, maybe that will discourage applicants from filing massive amounts of objections in future.
And another thing…

If you’re as confused as I am, ICANN is running a webinar November 7 at 2200 UTC in order to answer (hopefully) these kinds of questions.

TLDH raises $5 million from gTLD auctions

Top Level Domain Holdings made almost $5 million by losing auctions for the .lawyer and .website gTLDs this week, according to the company.
The London-listed company told the markets today that it has added £2.97 million ($4.81 million) to its coffers as a result of the auctions, in which Radix won .website and Donuts won .lawyer.
The number is net of the 4% cut taken by Innovative, which conducted the auctions, and the two $65,000 refunds TLDH will receive from ICANN when it withdraws the applications.
Some portion of the $4.8 million TLDH will have received from Donuts, where .lawyer was a two-horse race.
Radix’s winning bid for .website will have been split evenly between TLDH and Donuts.
At least one of these TLDs seems to have sold for significantly more than the average private auction selling price, which was $1.33 million after the first 14 Innovative auctions.
Innovative has managed auctions for 18 strings, but we don’t know the total price of the latest four.
The .website and .lawyer deals means TLDH now has £10.1 million ($16.3 million) in cash reserves, according to a company press release.
It still has 43 contested applications, however. On a $16 million budget — quite a lot less than some of its portfolio rivals — the company is going to have to make some smart tactical moves to maximize its gTLD portfolio.
“Our strategy remains to best monetise those applications where we see least value so that we can maximise our ability to acquire those names in which we see greatest value,” chairman Fred Krueger said in the press release.
It still has stakes in 25 uncontested gTLDs.
NOTE: An earlier version of this story contained inaccurate statements — failing to take into account that .website was a three-way contest — about the average selling price of new gTLDs at auction.

Directi’s Radix wins .website gTLD auction

Directi-affiliated TLD registry Radix, has won the private auction for the .website gTLD, according to Radix.
The company beat rival portfolio applicants Donuts and Top Level Domain Holdings to the string, in an auction that was managed by Innovative Auctions, likely one of several going on this week.
There’s no outstanding Governmental Advisory Committee advice or objections to the Radix application, so its path to contracting and eventual delegation should be relatively uncontroversial now.
The price was undisclosed, Innovative’s standard terms.
Directi is in the process of being acquired by Endurance International, owner of Domain.com, which promised Radix up to $62 million to help with its gTLD auctions.

TLDH has the end in sight, but no revenue

Top Level Domain Holdings made less than $12,000 in the first half of the year, but says its new gTLD business may start generating revenue in the fourth quarter.
In its interim financial results, published this morning, the company also revealed that it plans to launch its own domain name registrar and, via a partnership, web site building tools.
Revenue for the six months to June 30, which was almost all due to monetization of its second-level domains portfolio, was £7,000 ($11,295), compared to £346,000 ($558,000) a year earlier.
TLDH’s loss for the period grew to £1.8 million ($2.9 million) from £1.5 million ($2.4 million).
But in a lengthy statement chairman Fred Krueger assured investors that he is “confident” that the long process of getting TLDH’s applied-for gTLDs to market is drawing to a close.

Looking forward, I am confident that ICANN will broadly continue to sign contracts in line with the timelines we announced in July 2013, allowing .LONDON potentially to begin its launch and initial marketing as early as the first half of 2014. Given the recent signing of contract between .KIWI and ICANN, we may see our first revenues as a back-end registry operator as early as Q4 2013, and revenue from the sale of domain names from our first wholly-owned new gTLD by Q1 2014.

The company currently has interests in 25 uncontested gTLDs and has applied for 48 more, according to Krueger.
With more private and ICANN new gTLD auctions coming soon, TLDH has cash on hand of £7.4 million ($12 million).
Given the average selling price of a new gTLD is currently $1.3 million, there’s seems to be little chance of TLDH securing its entire portfolio of applied-for strings without additional funding.
Losing private auctions could be a way to generate cash to win more than the nine auctions that its $12 million implies, however.
Krueger also revealed TLDH’s revenue plans beyond its Minds + Machines registry services business.

As we enter into this final phase, we are pursuing other potential revenue-producing ventures by developing our own registrar, and, in cooperation with the website-building company Needly, providing a clean path for users to get a complete online solution – a web presence and email, as well as a domain name.

Krueger is also CEO of Needly, which makes a web content management platform.

Innovative Auctions hires storied new employee

Innovative Auctions, which is running private new gTLD auctions, has hired a poker-playing former Google engineer and grandson of Nobel-winning economist Milton Friedman.
Patri Friedman becomes the company’s 11th employee, according to an Innovative blog post.
According to his Wikipedia page, Friedman has had some success playing high stakes poker and was once a software engineer for Google, but his most recent gig was with the Seasteading Institute, where he’s still listed as chairman.
Seasteading is an ambitious project to create a floating libertarian nation state off the coast of Northern California, like something out of Neal Stephenson’s Snow Crash. Really.
At Innovative, he’ll be in charge of user experience and documentation, which seems quite dull in comparison.
Innovative has so far carried out just six new gTLD auctions. Presumably, it’s expecting to manage many more.