59,000% revenue growth at Donuts leads to Deloitte award

Deloitte has placed new gTLD registry Donuts at the top of its 2017 Technology Fast 500, a league table of the fastest-growing North American technology firms.
Donuts won by growing its revenue by 59,093% over three years.
Given that Donuts didn’t have its first revenue-generating gTLD delegated until the final quarter of 2013, the three-year judging period basically covers almost the entire period of its existence as a trading company.
The runners up were ClassPass (46,556%, founded 2013), which gives fitness junkies a centralized way to book from multiple classes, and Toast (31,250%, founded 2012), which makes point-of-sale software for restaurants.
Companies could submit themselves for consideration on the 500-strong table. They only needed 135% growth over three years to make it to the list.
The rankings are based on revenue, not profit, so it does not necessarily mean that gTLDs are a way to get rich quick.
Still, it’s impressive that something as dated as domain names could top the rankings, given the number of transformational technologies hitting the market every year.

“We own your name” government tells Amazon in explosive slapdown

Amazon suffered a blistering attack from South American governments over its controversial .amazon gTLD applications this weekend.
A Peruvian official today excoriated Amazon’s latest peace offering, telling the tech giant in no uncertain terms that the word “Amazon” is not its property and demanding an apology for the company’s alleged behavior during recent legal proceedings.
“We will be giving you permission to use a certain word, not the other way around,” she said. “We are the owners of the Amazonian region.”
Speaking for almost 10 minutes during a session at the ICANN 60 meeting in Abu Dhabi this afternoon, Peru’s representative to the Governmental Advisory Committee pulled rank and scolded Amazon like a naughty schoolchild.
She claimed that Amazon had been bad-mouthing Peru by saying former GAC reps had “lied to and manipulated” the rest of the GAC in order to get support for its objection. She then demanded an apology from the company for this.
She was speaking in support of the idea that the string “Amazon” belongs to the people of the Amazonas region, which covers as many as eight South American countries, rather than the American company, despite the fact that none of those countries use the English word to describe the region.
Her remarks drew applause from parts of the audience.
Amazon had showed up at the session — described by two GAC reps later as a “lion’s den” — to offer a “strong, agreed-upon compromise that addresses the needs of the governments”.
The proposed deal would see the GAC drop its objections to .amazon in exchange for certain safeguards.
Amazon is promising to reserve geographically and culturally sensitive words at the second level in .amazon.
The domain rainforest.amazon, its associate general counsel Dana Northcott said by way of example, would be never be used by anyone.
Affected governments would get to negotiate a list of such terms before .amazon went live and there’d be an ongoing consultation process for more such terms to be protected in future.
The company has also promised not to object to — and in fact to actively support with hard resources — any future applications for .amazonas or other local-language variants by the people of the region.
But Peru was not impressed, telling the company that not only is the English version of the name of the region not its property but also that it must show more respect to governments.
“No government is going to accept any impositions from you,” she said, before appealing to fellow GAC members that the issue represents a kind of existential threat.
“The core issue here… is our survival as governments in this pseudo-multi-stakeholder space that has been invented,” she said.
“They want us to believe this is a place where we have dignity but that is increasingly obvious that this is not the case,” she said. “We don’t have it. And that is because of companies like yours… Companies that persist in not respecting the governments and the people they represent.”
The Peruvian GAC rep, listed on the GAC web site as María Milagros Castañon Seoane but addressed only as “Peru” during the session, spoke in Spanish; I’ve been quoting the live interpretation provided by ICANN.
Her remarks, in my opinion, were at least partially an attempt to strengthen her side’s negotiating hand after an Independent Review Process panel this July spanked ICANN for giving too much deference to GAC advice.
The IRP panel decided that ICANN had killed the .amazon applications — in breach of its bylaws — due to a GAC objection that appeared on the face of the public record to be based on little more than governmental whim.
The panel essentially highlighted a clash between ICANN’s bylaws commitments to fairness and transparency and the fact that its New gTLD Applicant Guidebook rules gave the GAC a veto over any application for any reason with no obligation to explain itself.
It told ICANN to reopen the applications for consideration and “make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications”.
That was back in July. Earlier today, the ICANN board of directors in response to the IRP passed a resolution calling for the GAC to explain itself before ICANN 61 in March next year, resolving in part:

Resolved (2017.10.29.02), the Board asks the GAC if it has: (i) any information to provide to the Board as it relates to the “merits-based public policy reasons,” regarding the GAC’s advice that the Amazon applications should not proceed; or (ii) any other new or additional information to provide to the Board regarding the GAC’s advice that the Amazon applications should not proceed.

Other governments speaking today expressed doubt about whether the IRP ruling should have any jurisdiction over such GAC advice.
“It is not for any panelist to decided what is public policy, it is for the governments to decide,” Iran’s Kavouss Arasteh said.
During a later session today the GAC, talking among itself, made little progress in deciding how to formally respond to the ICANN board’s resolution.
A session between the GAC and the ICANN board on Tuesday is expected to be the next time the issue raises its increasingly ugly head.

This is who won the .inc, .llc and .llp gTLD auctions

The winners of the auctions to run the gTLD registries for company identifiers .inc, .llc and .llp have emerged due to ICANN application withdrawals.
All three contested gTLDs had been held up for years by appeals to ICANN by Dot Registry — an applicant with the support of US states attorneys general — but went to private auction in September after the company gave up its protests for reasons its CEO doesn’t so far want to talk about.
The only auction won by Dot Registry was .llp. That stands for Limited Liability Partnership, a legal construct most often used by law firms in the US and probably the least frequently used company identifier of the three.
Google was the applicant with the most cash in all three auctions, but it declined to win any of them.
.inc seems to have been won by a Hong Kong company called GTLD Limited, run by DotAsia CEO Edmon Chong. DotAsia runs .asia, the gTLD granted by ICANN in the 2003 application round.
My understanding is that the winning bid for .inc was over $15 million.
If that’s correct, my guess is that the quickest, easiest way to make that kind of money back would be to build a business model around defensive registrations at high prices, along the lines of .sucks or .feedback.
My feedback would be that that business model would suck, so I hope I’m wrong.
There were 11 original applicants for .inc, but two companies withdrew their applications years ago.
Dot Registry, Uniregisty, Afilias, GMO, MMX, Nu Dot Co, Google and Donuts stuck around for the auction but have all now withdrawn their applications, meaning they all likely shared in the lovely big prize fund.
MMX gained $2.4 million by losing the .inc and .llc auctions, according to a recent disclosure.
.llc, a US company nomenclature with more potential customers of lower net worth, went to Afilias.
Dot Registry, MMX, Donuts, LLC Registry, Top Level Design, myLLC and Google were also in the .llc auction and have since withdrawn their applications.

Double-charging claims as registries ramp up new gTLD refund demands

Registry operators have stepped up demands for ICANN to dip into its $100 million new gTLD cash pile to temporarily lower their “burdensome” accreditation fees.
A new missive from the Registries Stakeholder Group to ICANN this week also introduces a remarkable claim that ICANN may have “double charged” new gTLD applications to the tune of potentially about $6 million.
The RySG wants ICANN to reduce the quarterly fixed fees new gTLD registries must pay by 75% from the current $6,250, for a year, at a cost to ICANN of $16.87 million.
ICANN still has roughly $96 million in leftover money from the $185,000 per-TLD application fees paid in 2012, roughly a third of which had been earmarked for unexpected expenses.
When Global Domains Division president Akram Atallah refused this request in August, he listed some of the previously unexpected items ICANN has had to pay for related to the program, one of which was “implementation of the Trademark Clearinghouse”.
But in last week’s letter (pdf), the RySG points out that each registry was already billed an additional $5,000 fee specifically to set up the TMCH.

Your letter states that registry operators knew about the fee structure from the start and implies that changes of circumstance should be irrelevant. The TMCH charge, however, was not detailed in the applicant guidebook. ICANN added it on its own after all applications were accepted and without community input. Therefore, ICANN is very much in a position to refund registry operators for this overcharge, and we request that ICANN do so. Essentially, you would be refunding the amounts we paid with our own application fees, which should have been used to set up the TMCH in the first place.

These additional fees could have easily topped $6 million, given that there are over 1,200 live new gTLDs.
Was this a case of double-charging, as the RySG says?
My gut feeling is that Atallah probably just forgot about the extra TMCH fee and misspoke in his August letter. The alternative would be a significant accounting balls-up that would need rectifying.
RySG has asked ICANN for a “detailed accounting” of its new gTLD program expenses to date. If produced, that could clear up any confusion.
Group chair Paul Diaz, who signed the letter, has also asked for a meeting with Atallah at the Abu Dhabi public meeting later this month, to discuss the issue.
The letter also accuses ICANN of costing applicants lost revenue by introducing policies such as the ban on two-letter domains, increased trademark protections, and other government-requested restrictions that were introduced after application fees had already been paid.
The tone of the letter is polite, but seems to mask an underlying resentment among registries that ICANN has not been giving them a fair chance to grow their businesses.
UPDATE: This story was updated October 12 to correct the estimate of the total amount of TMCH setup fees collected.

New gTLDs still a crappy choice for email — study

New gTLDs may not be the best choice of domain for a primary email address, judging by new research.
Over 20% of the most-popular web sites do not fully understand email addresses containing long TLDs, and Arabic email addresses are supported by fewer than one in 10 sites, a study by the Universal Acceptance Steering Group has found.
Twitter, IBM and the Financial Times are among those sites highlighted as having only partial support for today’s wide variety of possible email addresses.
Only 7% of the sites tested were able to support all types of email address.
The study, carried out by Donuts and ICANN staff, looked at 749 websites (in the top 1,000 or so as ranked by Alexa) that have forms for filling in email addresses.
On each site, seven different email addresses were input, to see whether the site would accept them as valid.
The emails used different combinations of ASCII and Unicode before the dot and mixes of internationalized domain name and ASCII at the second and top levels.
These were the results (click to enlarge or download the PDF of the report here):

The problem with these numbers, it seems to me, is the lack of a control. There’s no real baseline to judge the numbers against.
There’s no mention in the paper about testing addresses that use .com or decades-old ccTLDs, which would have highlighted web sites that with broken scripts that reject all emails.
But if we assume, as the paper appears to, that all the tested web sites were 100% compliant for .com domains, the scores for new gTLDs are not great.
There are currently over 800 TLDs over four characters in length, but according to the UASG research 22% of web sites will not recognize them.
There are 150 IDN TLDs, but a maximum of 30% of sites will accept them in email addresses.
When it comes to right-to-left scripts, such as Arabic, the vast majority of sites are totally hopeless.
UASG dug into the code of the tested sites when it could and found that most of them use client-side code — JavaScript processing a regular expression — to verify addresses.
A regular expression is complex bit of code that can look something like this: /^.+@(?:[^.]+\.)+(?:[^.]{2,})$
It’s not every coder’s cup of tea, but it can get the job done with minimal client-side resource overheads. Most coders, the UASG concludes, copy regex they found on a forum and maybe tweak it a bit.
This should not be shocking news to anyone. I’ve known about it since 2009 or earlier when I first started ripping code from StackOverflow.
However, the UASG seems to be have been working on the assumption that more sites are using off-the-shelf software libraries, which would have allowed the problem to be fixed in a more centralized fashion.
It concludes in its paper that much greater “awareness raising” needs to happen before universal acceptance comes closer to reality.

Millions spent as three more new gTLDs auctioned

Two or three new gTLDs have been sold in a private auction that may well have seen over $20 million spent.
The not-yet-delegated strings .inc, .llc and (I think) .llp hit the block at some point this month.
They are the first new gTLDs to be auctioned since Verisign paid $135 million for .web a little over a year ago.
At this point, nobody wants to talk about which applicant(s) won which of the newly sold strings, but it seems that the proceeds ran into many millions.
MMX, which applied for .inc and .llc, said this morning that it has benefited from a $2.4 million windfall by losing both auctions.
The auctions evidently took place in September, but CEO Toby Hall declined to comment any further, citing non-disclosure agreements.
There were nine remaining applicants for .inc and eight for .llc.
I don’t think it’s possible to work out which sold for how much using just MMX’s disclosure.
But private auctions typically see the winning bid divided equally between the losers.
I believe .llp was probably sold off by auction at the same time.
The reason for this is that .llc, .inc and .llp were contention sets all being held up by one applicant’s dispute with ICANN.
Dot Registry LLC had applied for all three as “community” gTLDs, which meant it had to go through the Community Evaluation Process.
While it failed the CPE on all three counts, the company subsequently filed an Independent Review Process complaint against ICANN, which it won last August.
You may recall that this was the IRP that found disturbing levels of ICANN meddling in the drafting of the CPE panel’s findings.
Ever since then, ICANN has been conducting an internal review, assisted by outside experts, into how the CPE process worked (or didn’t).
Lawyers for Dot Registry and other affected applications (for .music and .gay) have been haranguing ICANN all year to get a move on and resolve the issue.
And yet, just as the end appeared to be in sight, Dot Registry seems to have decided to give up (or, possibly, cash out) and allow the strings to go to auction.
CEO Shaul Jolles declined to comment on the auctions today.
All I can currently tell you is that at least two of the Dot Registry holdout strings have been sold and that MMX did not win either of them.
The applicants for .inc were: Uniregistry, Dot Registry, Afilias, GMO, GTLD Limited, MMX, Nu Dot Co (now a known Verisign front), Donuts and Google.
The applicants for .llc were: MMX, Dot Registry, Nu Dot Co, Donuts, Afilias, Top Level Design, myLLC and Google.

MMX revenue slips despite domain growth

MMX today posted a smaller loss for the first half of the year, despite managing to grow domains under management and hit some important financial milestones.
The new gTLD registry formerly known as Mind + Machines, which announced a few months ago that it’s looking to be acquired, reported an H1 loss of $526,000 compared to a loss of $1.9 million a year earlier.
Revenue and billings were both down due to the lack of any big launches in the period; H1 2016 had benefited from the strong launch of .vip in China.
Revenue, which is recognized over the duration of the domain registrations, was $5.3 million compared to $7.4 million in 2016. Billings, a measure of cash sales, were $5.6 million compared to $8.1 million.
Despite these dips, MMX is happy enough that the “quality” of its revenue is getting better.
The company said that revenue from domain renewals more than doubled to $2.4 million and represented 45% of revenue. A year ago, it was 15%.
As another measure of the health of its business, it also said that its renewal billings was greater than its operating expenditure for the first time, after cost-cutting.
Domains under management went into seven figures for the first time, to 1.1 million. That was up from 821,000 at the start of the year.
It processed 318,000 new registrations in the six months, compared to 452,000 a year earlier (when .vip’s launch provided a boost).

More delay for Amazon as ICANN punts rejected gTLD

Amazon is going to have to wait a bit longer to discover whether its 2012 application for the gTLD .amazon will remain rejected.
ICANN’s board of directors at the weekend discussed whether to revive the application in light of the recent Independent Review Process panel ruling that the bid had been kicked out for no good reason.
Instead of making a firm decision, or punting it to the Government Advisory Committee (as I had predicted), the board instead referred the matter to a subcommittee for further thought.
The newly constituted Board Accountability Mechanisms Committee, which has taken over key functions of the Board Governance Committee, has been asked to:

review and consider the Panel’s recommendation that the Board “promptly re-evaluate Amazon’s applications” and “make an objective and independent judgment regarding whether there are, in fact, well-founded, merits-based public policy reasons for denying Amazon’s applications,” and to provide options for the Board to consider in addressing the Panel’s recommendation.

The notion of a “prompt” resolution appears to be subjective, but Amazon might not have much longer to wait for a firmer decision.
While the BAMC’s charter requires it to have meetings at least quarterly, if it follows the practice of its predecessor they will be far more frequent.
It’s possible Amazon could get an answer by the time of the public meeting in Abu Dhabi at the end of next month.
ICANN’s board did also resolve to immediately pay Amazon the $163,045.51 in fees the IRP panel said was owed.
The .amazon gTLD application, along with its Chinese and Japanese versions, was rejected by ICANN a few years ago purely on the basis of consensus GAC advice, led by the geographic name collisions concerns of Peru and Brazil.
However, the IRP panel found that the GAC advice appeared to based on not a great deal more than whim, and that the ICANN board should have at least checked whether there was a sound rationale to reject the bids before doing so.

.xyz back on sale in China

Chinese registrars have started to carry .xyz domains again, about five months after a Chinese government ban.
West.cn and Net.cn are two of the China-based companies that appear to be selling .xyz names at the yuan equivalent of a US dollar, based on a spot check this morning.
West.cn flagged the “restoration” of service on its blog today, saying it was “overjoyed” to resume sales.
XYZ.com revealed back in May that its new gTLD domains were “temporarily” no longer available via Chinese registrars, after the government there suspended its license.
The reason for the suspension has always been a little vague, but the registry told DNW back in May that it related to Real Names Verification.
RNV is the government-mandated identity check that must take place before anyone in China can register and use a domain name.
XYZ had been outsourcing the function to ZDNS, but that relationship fell apart for some reason (rumor has it there was a money dispute) and XYZ decided to switch to Tele-info.
In the interim, Chinese registrars, apparently under order of their government, dutifully stopped carrying .xyz domains.
XYZ also went through ICANN’s Registry Services Evaluation Process to get its move to Tele-info approved at the Registry Agreement level.
The downtime prevented XYZ from masking the precipitous decline in its number of domains under management, which has fallen by over three million since May.
XYZ and the Chinese government have yet to issue statements about the newly reinstated license.
UPDATE 10/10/2017 — XYZ.com got in touch last week to say that .xyz was never “banned” in China.
A spokesperson said in an email: “We had RNV in place with ZDNS and opted to switch. To be compliant with ICANN, we suspended registrations in China.”
He declined to clarify whether the suspension was voluntary or ICANN-mandated.
He also declined to confirm or deny that Chinese registrars been told to suspend .xyz registrations by the government, as local sources have previously told DI and Domain Name Wire.
Other gTLDs owned by other registries have previously obtained Chinese licenses without ICANN first approving their RNV providers.

Okay, pedants, only 36% of new gTLDs are shrinking

Thirty-six percent of non-brand new gTLDs are shrinking, DI analysis shows.
According to numbers culled from zone files, 156 of the 435 commercial gTLDs we looked at had fewer domains yesterday than they did a year earlier.
On the bright side, that means the majority of them are still growing, but…

You: Wait, Kev, didn’t you write this exact same story yesterday, but said that 40% of new gTLDs were shrinking? Why are you now saying it’s 36%?
Me: People in the comments and on social media complained that I’d used domains under management (DUM) from May’s registry transaction reports — the most recent available — to collate the data yesterday, rather than more recent but less accurate zone files.
You: Why did they complain?
Me: I think because the May numbers show .xyz gaining on an annual basis, and yet everyone and his grandmother knows that .xyz’s numbers dropped off a cliff in July.
Your Grandmother: It’s true, they did. They lost millions…
You: Shut up, Gran. So, Kev, presumably if you do the same survey again, using the same TLDs, but use zone file data from this week instead, you’ll discover that the number of shrinking TLDs is far greater than 40%?
Me: Why would you presume that?
You: Because I also hate new gTLDs in general, not just .xyz specifically.
Me: Actually, the number of shrinking new gTLDs turns out to be smaller.
You: How come?
Me: Because only 36% of the gTLDs I surveyed had fewer numbers in their September 18, 2017 zone file than they did in their September 18, 2016 zone file.
You: So you actually over-reported the shrinkage in your first post? How come? I thought you were a shameless stooge of the new gTLD industry.
Me: I get that a lot.
You: Is .xyz at least on the list of biggest losers now?
Me: It is. Right at the top.
You: Good. I really fucking hate .xyz. What else changed? Stands to reason that some losers first time around are now gainers.
Me: Correct. Famous Four Media’s .party, for example, was a top 10 loser in the report comparing May 2016 DUM to May 2017 DUM, losing over 100,000 names, but it’s a top 10 gainer in the September-September zone file report, adding 85,000.
You: Explain.
Me: Well, .party’s reg numbers fell off a cliff in July 2016, and were still pretty depressed a year ago, but have since regained ground, presumably due to them costing less than a pack of gum.
You: Got it. Any others?
Me: It’s a similar story for .webcam, .work, .bar, .audio, .rest and a few others. They all shrunk May-May but gained September-September.
You: So, in summary, the new gTLD industry isn’t as unhealthy as you made out on Monday?
Me: Maybe. To be honest I don’t think the disparity between 36% and 40% makes a whole lot of difference. It’s still quite a lot of TLDs growing in the wrong direction. At one time, that kind of thing was virtually unheard of.
You: True dat.
Me: Anyway, can I get back to my blog post now?
You: Sure. Just don’t expect me to read to the end.