Demand Media spins off Rightside

Demand Media has completed the spin-off of its domain name business, Rightside.
Shares in the new company, which will be listed on the Nasdaq stock exchange, went to existing Demand Media shareholders.
Trading under the ticker symbol NAME, Rightside stock started off at $16.77 yesterday morning and is currently trading at around $15.07.
Rightside comprises number two registrar eNom, retail registrar Name.com, new gTLD portfolio registry United TLD (which is branded Rightside), and its share of auction house NameJet.
It is headed by CEO Taryn Naidu and chairman David Panos.
The company also today named its initial board of directors.

Taryn Naidu is a *%@$! Rightside bans company “ridicule” in its new gTLDs

If you register a domain name in one of Rightside Registry’s new gTLDs, you’ll be banned from using it to mock the company or any of its employees or shareholders.
That’s according to its Acceptable Use (Anti-Abuse) Policy (pdf) published by ICANN today.
As well as prohibiting the usual kinds of malicious hacking and spamming activity, child abuse material and so on, the policy bans:

Holding of [United TLD Holdings] (including its affiliates) or their employees or shareholders up to public scorn, ridicule, or defamation.

I can’t recall seeing that kind of clause in a domain name registration agreement before.
While “defamation” is obviously illegal in most places (as determined by a court), “scorn” seems to be a pretty broad term that could capture a lot of free speech commentary.
Rightside has applied for 26 new gTLDs. Several are the kinds of places you might expect to see some edgy discussion: .republican, .democrat, .army, .actor and .gay to name a few examples.
It seems the simplest route to getting a web site you don’t like shut down in any of these gTLDs would be to buy a single Rightside share and file an abuse complaint.
Also banned by the policy is:

Impersonating any person or entity, including, but not limited to, a UTLDH official, or falsely stating or otherwise misrepresenting your affiliation

Rightside, aka United TLD, is the Demand Media domain name retailer and new gTLD registry currently being spun off into a standalone company under CEO (and thoroughly nice bloke) Tayrn Naidu.

NameCheap: a top ten registrar?

eNom reseller NameCheap is actually in the top 10 largest registrars in terms of domains under management, judging by data in regulatory documents filed by eNom parent Rightside.
According to a Rightside SEC filing related to its spin-off from Demand Media, NameCheap accounted for 23% of the company’s total domains under management as of September 30.
With the same document declaring Rightside has over 12 million names under management as of the same date, NameCheap apparently looks after just under 2.8 million domains.
By my reckoning, this means NameCheap is very probably the ninth-largest registrar by DUM out there, sandwiched between GMO Internet and FastDomain.
My comparison is not completely apples-to-apples — NameCheap’s number may include ccTLD registrations and I’m levering the company into a gTLDs-only league table — so may not be fully reliable.
But it’s the first solid indication of the size of NameCheap’s business I’ve seen in a while.
While NameCheap is accredited by ICANN in its own right, it has never registered more than a handful of domains under its own name, leaving it in the sub-900 range in the DUM league table.
According to Rightside, NameCheap is under contract to exclusively use eNom’s wholesale services until December 2014, but the deal does have one-year renewals built in.

Eight more new gTLDs delegated

Donuts and United TLD had a combined total of eight new gTLDs added to the DNS root zone today.
Donuts subsidiaries saw .zone, .agency, .cheap and .marketing go live, while United TLD (Demand Media/Rightside) got .dance, .democrat, .moda (Spanish for “fashion/style”) and .social.
The nic.[tld] domains all appear to be resolving, albeit to the registries’ web sites in other TLDs.
There are now 91 new gTLDs live in the root, more than five times the number of legacy gTLDs. It seems likely that we’re going to pass 100 this week.

.ninja springs to life as a squirrel as 19 new gTLDs get delegated

ICANN may be taking Christmas week off, but Verisign apparently isn’t — another 19 new gTLDs were delegated to the DNS root system last night.
Most belong to Donuts: .training, .builders, .coffee, .codes, .education, .florist, .farm, .glass, .house, .holiday, .international, .institute, .solar, .repair and .solutions.
United TLD, the Demand Media/Rightside business that is also providing Donuts’ back-end, had .ninja and .kaufen (German for “buy”) delegated.
PeopleBrowsr’s .ceo also went live, as did I-REGISTRY’s .onl (for “online”).
Donuts is already redirecting its latest batch of nic.[tld] domains to donuts.co.
The web site at nic.ninja currently shows this image as part of a placeholder page:

UPDATE: It occurs to me that this might actually be a prairie dog or something, rather than a squirrel.

Demand Media to spin off domains business as Rightside

Demand Media has confirmed its plan to spin off its domain name business into a separate company.
The new firm will be called Rightside. As the (rather good) name suggests, it will include the company’s interests in over 100 new gTLD applications and registries.
As well as United TLD, it will also include eNom, Name.com and Demand’s stake in NameJet.
Rightside will be based in Kirkland, Washington, and headed by new appointed CEO Taryn Naidu, who’s been running Demand’s domain unit internally for the last couple of years.

ICANN signs contracts for .wang and .democrat

The new gTLD applicants behind .wang and .democract are the latest to sign Registry Agreements with ICANN.
Demand Media’s United TLD is behind .democrat, while .wang was applied for by small Chinese portfolio applicant Zodiac Holdings. Both were uncontested applications.
Both are to be open gTLDs.
For .democrat, Demand expects names to be registered by anyone who identifies themselves as a democrat. There were no objections, and to the best of my knowledge no explicit support, from “Democrat” parties
.wang is a weird one.
It’s the Latin-script transliteration of the Chinese character 网, which means “net”. Zodiac couldn’t apply for the Chinese because it’s a single character, which are not yet allowed under ICANN rules.
I understand that 网 is often used by Chinese speakers to mean “network” or “website”, but I don’t know how commonly the ASCII “wang” is used instead. Seems like a stretch.
It also of course is a common Chinese surname and a juvenile euphemism for “penis”.

CEO Rosenblatt quits Demand Media

Demand Media CEO and co-founder Richard Rosenblatt has resigned and will be replaced by co-founder Shawn Colo, the company has announced.
In a statement filed with the Securities and Exchange Commission today, no reason was given for his departure.
Colo will take the CEO spot at the end of the month, while director James Quandt takes over as chairman immediately.
The company also said last night that it is still planning to spin off its domain name business, but “is currently in the process of evaluating the timing for completing the separation.”
This implies the plan, which was announced in February, has been delayed.
Demand Media’s domains business includes eNom, dozens of smaller registrars, and United TLD, which has applied for a portfolio of new gTLDs.

Famous Four says that Demand Media’s .cam should be rejected

Demand Media’s application for .cam should be rejected because it lost a String Confusion Objection filed by .com registry Verisign, according to rival applicant Famous Four Media.
“The process in the applicant guidebook is now clear: AC Webconnecting and dot Agency Limited proceed to resolve the contention set, and United TLD’s application cannot proceed,” chief legal officer Peter Young told DI.
dot Agency is Famous Four’s applicant for .cam, which along with AC Webconnecting survived identical challenges filed by Verisign. United TLD is the applicant subsidiary of Demand Media.
Serious questions were raised about the SCO process after two International Centre for Dispute Resolution panelists reached opposition conclusions in the three .cam/.com cases last month.
Demand Media subsequently called for an ICANN investigation into the process, with vice president Statton Hammock writing:

String confusion objections are meant to be applicant agnostic and have nothing to do with the registration or use of the new gTLD.

However, Famous Four thinks it has found a gotcha in a letter (pdf) written by a lawyer representing Demand which opposed consolidation of the three .cam cases, which stated:

Consolidation has the potential to prejudice the Applicants if all Applicants’ arguments are evaluated collectively, without regard to each Applicant’s unique plan for the .cam gTLD and their arguments articulating why such plans would not cause confusion.

In other words, Demand argued that the proposed usage of the TLD should be taken into account before the ICDR panel ruled against it, and now it saying usage should not have been taken into account.
Famous Four’s Young said:

Whether or not one ascribes to the view that usage should not be taken into account, and we believe that it should (otherwise we would not have argued it), the fact is that United TLD were very explicit prior to the publication that usage should indeed be taken into account.

The SCO debate expanded yesterday when the GNSO Council spent some time discussing .cam and other SCO discrepancies during its regular monthly meeting.
Concerns are such that the Council intends to inform the ICANN board of directors and its New gTLD Program Committee that it is looking into the issue.
The NGPC, has “Update on String Similarity” on its agenda for a meeting on Tuesday, which will no doubt try to figure out what, if anything, needs to be done.

String confusion in disarray as Demand’s .cam loses against Verisign’s .com

Demand Media is demanding an ICANN review of its objections policy, after its applied-for new gTLD .cam was beaten in a String Confusion Objection by .com registry Verisign.
A International Centre for Dispute Resolution panelist has ruled (pdf) that .cam and .com are too confusingly similar to coexist, meaning Demand’s bid for .cam must be rejected by ICANN.
But the ruling by Urs Laeuchli conflicts with two other ICDR panel decisions on .cam, which both found that the string is NOT confusingly similar to .com and therefore can be delegated.
So while Demand’s .cam bid, under a strict reading of the rules, is now supposed to be rejected, applications for identical strings filed by AC Webhosting and dotAgency can go ahead.
ICANN has been thrown a curve ball it is not yet fully prepared to deal with.
As Akram Atallah, president of ICANN’s Generic Domains Division, told DI last week, it’s possible that the policy or the implementation of that policy may need to be revisited by ICANN and the community.
United TLD, the Demand Media subsidiary that applied for .cam, is now calling for precisely that, with vice president of business and legal affairs Statton Hammock writing today:

String confusion objections are meant to be applicant agnostic and have nothing to do with the registration or use of the new gTLD. What matters in string confusion objections is whether a string is visually, aurally or, according to ICANN’s Applicant Guidebook, otherwise “so nearly resembles another that it is likely to deceive or cause confusion.” Individuals may disagree on whether .CAM and .COM are similarly confusing, but there can be no mistake that United TLD’s .CAM string, AC Webhosting’s .CAM string, and dotAgency Limited’s .CAM string are all identical. Either all three applications should move forward or none should move forward.

The .cam cases are not alone in presenting ICANN with SCO problems.
Last week, Donuts’ bid for .pets was ruled confusingly similar to Google’s .pet, despite previous ICDR cases finding that plurals and singulars are not too confusing to coexist.
Where the .cam panelists disagreed
While there were three .cam cases, two of them were decided by the same panelist. It seems that both panelists were provided with very similar sets of evidence in all three cases.
It’s relevant to note that neither panelist — unlike some of their colleagues in other cases — thought it was appropriate to apply trademark law such as the DuPont factors in their decisions.
They did, however, consider the expected use cases of .cam.
All three applicants take .cam as short for “webcam” or “camera” and would target registrants interested in those fields (a lot of the use will likely be pornographic — AC Webconnecting is a porn firm after all).
But all three applicants also want to run “open” gTLDs, with no registration restrictions.
ICDR panelist Murray Smith was in charge of both the AC Webconnecting and dotAgency cases. He addressed expected usage explicitly in dotAgency, and explained why:

It is not just the visual, phonetic and conceptual similarity between the words that must be taken into account. In my view the greater emphasis should be focused on the use of the disputed extensions in the context of modern Internet usage. It is this context that compels the conclusion that an average Internet user would not be confused and would know that a .com website is probably a commercial website while a .cam websites would be something more focused in a particular field.

In AC Webconnecting, he wrote:

I agree that a consumer would quickly realize that a .cam website is likely associated with photography or camera use and is different than a .com website in use generally by a myriad of commercial entities.

So he’s putting the “greater emphasis” on usage — a factor that is not explicitly mentioned in the Applicant Guidebook’s description of the SCO and which may quite often differ between applicants.
Right there, in Smith’s interpretation of his task, we have a reason why SCOs will produce different results for identical strings.
I find Smith’s thinking baffling for a couple of reasons.
First, “a consumer would quickly realize that a .cam website is likely associated with photography” seems to ignore the existence of a bazillion .com web sites that are also associated with photography.
When did “commercial entities” and “photography or camera use” become mutually exclusive? Is photographyblog.com not confusingly similar to photographyblog.cam?
Second, he ignores the fact that basically anyone will be able to register a .cam web site for basically any purpose. None of the applicants want to restrict the gTLD to camera-related stuff.
ICDR panelist Laeuchli, in the Demand Media .cam case, raised this precise point, saying:

“.com” and “.cam” would use the same channels appealing to a broad audience. Even though according to Applicant, its envisioned TLD will “likely appeal” to a specific audience, it plans to operate “.cam” as an open gTLD. This would lead to extensive overlap.

Panelist Smith has some other notions about confusion that seem to defy common sense. He wrote in the AC Webconnecting case:

The .com TLD is the most widely recognized string in the Internet world. No reasonable Internet user would fail to recognize the .com TLD. The very reputation of the .com name serves to limit the potential for an average Internet user to be confused by the proposed .cam TLD. It is indeed unlikely that an online consumer would confuse a .com website with a .cam website.

Does this not strike anyone else as bad thinking?
It seems to me to be a little like saying that it’s perfectly okay to market a brand of carbonated beverage called Cuke, because Coke is so famous that nobody could possibly be confused. I don’t know where the law stands on that issue, but I’m pretty sure Coke wouldn’t be happy about it.
There’s also some weirdness in Laeuchli’s decision in the Demand case.
He puts some weight on the similarity scores produced by the controversial Sword algorithm in his decision, but apparently without doing even the basic research. He writes in his findings:

No matter what the standards and purpose the ICANN SWORD algorithm includes, it has comparative value.
…
Since pairs such as “God” and “dog” (85%) reach similarity scores of 84% and higher, how much more similar would “cxm” and “cxm” be (x being replaced with a vowel)!

The answer is that, according to Sword, they’re less similar. Sword scores “cam” v “com” at 63%.
Laeuchli knows it’s 63%, because he makes reference to that fact in his summary of Verisign’s evidence. He doesn’t need to speculate about the number based on what “god” v “dog” scores (and if he did the “dog” v “god” query himself, why on earth didn’t he just query “com” v “cam” too?)
His finding that .cam and .com will cause probable confusion seems to be based largely on expert witness testimony provided by both Verisign and Demand, in which he found Verisign’s more persuasive.
This evidence seems to have largely comprised the opinions of linguists, examining mouth shapes and acoustic frequencies, and market research looking into internet user behavior. As none of it has been published, it’s difficult to judge which side had the better arguments.
But it’s undeniably about the similarity of the strings, rather than the proposed usage, which makes Demand Media’s statement today — that SCOs “are meant to be applicant agnostic and have nothing to do with the registration or use of the new gTLD” — quite confusing.
Demand lost its case based on the string similarity, whereas the other two applicants won theirs based on the usage.
Perhaps Demand senses that its .cam application will not be immediately rejected if ICANN reopens the debate about string similarity. If think it’s probably correct.