.porn now the biggest new gTLD sunrise

.porn and .adult have taken the crown of the most-subscribed new gTLD sunrise periods to date.
The two ICM Registry spaces opened up for registrations from users of the Trademark Clearinghouse on March 2.
A little over a week later, the company tells DI that both gTLDs have individually exceeded the previous sunrise record holder.
My understanding is that .london was the new gTLD with the most sunrise registrations, selling just over 800 names to TMCH customers during its combined sunrise/landrush, which ended last July.
ICM revealed in a webinar last week that it expected its new gTLDs to have to biggest sunrise numbers to date.
“Both .porn and .adult will have exceeded that [.london] number comfortably,” ICM president Stuart Lawley confirmed to DI today.
.adult is “almost neck and neck” with .porn, Lawley said.
The numbers are still pretty small compared to ICM’s 2003-round gTLD, .xxx, which had over 80,000 sunrise applications in October 2011.
They’re also pretty small compared to the TMCH’s overall number of registrations, which at the last public disclosure was a little under 35,000.
But ICM has another couple opportunities for trademark owners to defensively register that may work out cheaper.
First, from April 6 to April 30 companies that bought non-resolving “blocked” names in the .xxx Sunrise B will be able to block the same strings in .porn and .adult.
ICM says registrars are offering discounts for five-year blocks.
Then, from May 6 to May 31 the Domain Matching program starts. That’s open to any .xxx registrant, defensive or otherwise, but not to those with .xxx Sunrise B blocks.

Europeans digging new gTLD more than Americans?

Are European registrants more likely to register new gTLD domain names than those in the US and elsewhere?
That’s the view of Tucows, which sees more new gTLD action from its European OpenSRS resellers than it does from others.
In a blog post last week, OpenSRS blogger Gustavo Arruda noted that Americans are still stuck in a .com mindset:

Our European resellers are leading the charge. We expected the European market to be more open to new gTLDs and that prediction proved correct. It’s a market used to ccTLDs so having a couple hundred more new gTLDs was not a big deal.
North American resellers are lagging behind. It continues to be a very .COM-centric market that is still skeptical about too much choice.
South American and Asian resellers complain about the English-centric nature of new gTLDs. A lot of the new gTLDs we have launched do not make sense in these markets so adoption has been slow.

The post came as OpenSRS recorded its 100,000th new gTLD domain sale.
One reason for the Euro-slant in the market could be the relatively good performance of city gTLDs, most of which are European, and which are easily grasped concepts for buyers familiar with ccTLDs.
Hover, Tucows’ retail registrar, is geo-targeting which TLDs it offers visitors. As DI is based in London, I get offered .london domains prominently when searching for domains there.
The only US geo-gTLDs available to date are .vegas and .nyc.

Donuts bought .reise

Donuts has been confirmed by a German news site as the new owner of .reise, which was auctioned by its previous owner last week.
It was the first time a live gTLD had been sold at auction.
The deal, which is believed to have cost Donuts at least $400,000, means the company now owns .reise and .reisen.
Both mean “.travel”. According to my GCSE German skillz, last exercised 22 years ago, .reisen is a verb and .reise is a noun, but .reisen is also the plural of the noun .reise.
I believe this means that Donuts is the first company to own both the plural and singular forms of a new gTLD string.
Heise Online reports that former registry Dotreise was forced to sell up due to competition from Donuts.
Donuts’ .reisen has over 4,000 names in its zone file, compared to .reise’s 1,300. It’s a small market so far, but Donuts has the lion’s share.
The article notes that Donuts got a better position in ICANN’s prioritization draw in late 2012, meaning it got to market slightly earlier. Donuts also sells for a much lower price.
I doubt time to market was as much of a factor as price.
But it might be interesting to note that while Donuts’ advantage was just six days in terms of contract-signing, that lead had been extended to six weeks by the time .reise was delegated.
Donuts, which has more experience than any other company when it comes to the transition to delegation process, managed to hit general availability two weeks sooner than .reise, even though Donuts’ sunrise period was twice as long.

ICANN wins .hotels/.hoteis confusion appeal but has to pay up anyway

The proposed new gTLDs .hotels and .hoteis are too confusingly similar to coexist on the internet.
That’s the result of an Independent Review Process decision this week, which denied .hotels applicant Booking.com’s demand to have ICANN’s string confusion decision overturned.
But the IRP panel, while handing ICANN a decisive victory, characterized the string confusion and IRP processes as flawed and said ICANN should have to pay half of the panel’s $163,000 costs.
Booking.com filed the IRP a year ago, after the new gTLD program’s String Similarity Panel said in February 2013 that .hotels was too similar to rival Despegar Online’s proposed .hoteis.
.hoteis is the Portuguese translation of .hotels. Neither string was contested, so both would have been delegated to the DNS root had it not been for the confusion decision.
In my view, the String Similarity Panel’s decision was pretty sound.
With an upper-case i, .hoteIs is virtually indistinguishable from .hotels in browsers’ default sans-serif fonts, potentially increasing the ease of phishing attacks.
But Booking.com, eager to avoid a potentially costly auction, disagrees with me and, after spending a year exhausting its other avenues of appeal, filed an IRP in March 2013.
The IRP decision was handed down on Tuesday, denying Booking.com’s appeal.
The company had appealed based not on the merits of the SSP decision, but on whether the ICANN board of directors had acted outside of its bylaws in establishing an “arbitrary” and opaque SSP process.
That’s because the IRP process as established in the ICANN bylaws does not allow appellants to changed a decision on the merits. IRP panels are limited to:

comparing contested actions of the Board to the Articles of Incorporation and Bylaws, and with declaring whether the Board has acted consistently with the provisions of those Articles of Incorporation and Bylaws.

The IRP panel agreed that the SSP process could have been fairer and more transparent, by perhaps allowing applicants to submit evidence to the panel and appeal its decisions, saying:

There is no question but that that process lacks certain elements of transparency and certain practices that are widely associated with requirements of fairness.

But the IRP panel said Booking.com was unable to show that the ICANN board acted outside of its bylaws, highlighting the limits of the IRP as an appeals process:

In launching this IRP, Booking.com no doubt realized that it faced an uphill battle. The very limited nature of the IRP proceedings is such that any IRP applicant will face significant obstacles in establishing that the ICANN Board acted inconsistently with ICANN’s Articles of Incorporation or Bylaws. In fact, Booking.com acknowledges those obstacles, albeit inconsistently and at times indirectly.
…
Booking.com has failed to overcome the very obstacles it recognizes exist.

The IRP panel quoted members of ICANN’s New gTLD Program Committee extensively, highlighting comments which questioned the fairness of the SSP process.
In contrast to usual practice, where the losing party in an IRP bears the costs of the case, this panel said the $163,000 costs and $4,600 filing fee should be split equally between ICANN and Booking.com:

we can — and we do — acknowledge certain legitimate concerns regarding the string similarity review process raised by Booking.com, discussed above, which are evidently shared by a number of prominent and experienced ICANN NGPC members.
…
In view of the circumstances, each party shall bear one-half of the costs of the IRP provider

Booking.com and Despegar will now have to fight it out for their chosen strings at auction.
The full decision can be read in PDF format here. Other documents in the case can be found here.
The TL;DR version: ICANN wins because it has stacked the appeals deck in its favor and the IRP process is pretty much useless, so we’re going to make them pay up for being dicks.

Live gTLD .reise sold at auction

The first auction of a live new gTLD resulted in a sale, I can reveal.
Dotreise’s .reise, which is German for “.travel”, changed hands in an auction managed by Applicant Auction last Friday.
Unfortunately, I haven’t been able to identify the winning bidder or the winning bid, but the winner’s identity will inevitably be revealed sooner or later.
Applicant Auction had said there was to be a $400,000 starting bid on the gTLD.
.reise has been general availability since August but has only about 1,300 names in its zone file. It retails for up to $180 a year.
If the TLD’s new owner is not Donuts, the company will find itself competing with Donuts’ much cheaper and more popular .reisen.

Tucows and Namecheap exit $14m .online deal

Tucows and Namecheap have both pulled out of their joint venture with Radix to run the .online registry.
Tucows revealed the move, which will see Radix run .online solo, in a press release yesterday.
Both Tucows and Namecheap are registrars, whereas Radix is pretty much focused on being a registry nowadays.
While financial terms have not been disclosed, Tucows CEO Elliot Noss had previously said that each of the three companies had funded the new venture to the tune of $4 million to $5 million.
I estimate that this puts the total investment in the deal — which includes the price of winning .online at auction — at $13 million to $14 million.
Noss has also hinted that the gTLD sold for much more than the $6.8 million paid for .tech.
.online has not yet been delegated.

More security issues prang ICANN site

ICANN has revealed details of a security problem on its web site that could have allowed new gTLD registries to view data belonging to their competitors.
The bug affected its Global Domains Division customer relationship management portal, which registries use to communicate with ICANN on issues related to delegation and launch.
ICANN took GDD down for three days, from when it was reported February 27 until last night, while it closed the hole.
The vulnerability would have enabled authenticated users to see information from other users’ accounts.
ICANN tells me the issue was caused because it had misconfigured some third-party software — I’m guessing the Salesforce.com platform upon which GDD runs.
A spokesperson said that the bug was reported by a user.
No third parties would have been able to exploit it, but ICANN has been coy about whether any it believes any registries used the bug to access their competitors’ accounts.
ICANN has ‘fessed up to about half a dozen crippling security problems in its systems since the launch of the new gTLD program.
Just in the last year, several systems have seen downtime due to vulnerabilities or attacks.
A similar kind of privilege escalation bug took down the Centralized Zone Data Service last April.
The RADAR service for registrars was offline for two weeks after being hacked last May.
A phishing attack against ICANN staff in December enabled hackers to view information not normally available to the public.

Google buys .app for over $25 million

The fiercely competed new gTLD .app has sold to Google for a record-breaking $25 million.
The company’s Charleston Road Registry subsidiary beat out 12 other applicants for the string, including Donuts, Amazon, Famous Four Media, Radix and Afilias.
The auction lasted two days and fetched a winning bid of $25,001,000, more than any other new gTLD to date.
The previous high is believed to be .blog, which I estimate sold for less than $20 million.
Because it was an ICANN-run “last resort” auction, all of the money goes into ICANN’s special auction proceeds fund, which previously stood at just shy of $35 million.
Previous ICANN auctions have fetched prices between $600,000 and $6,760,000.
Google originally proposed .app as a closed registry in which only Google and its partners could register names.
However, after the Governmental Advisory Committee pressured ICANN to disallow “closed generics”, Google changed its application to enable anyone to register.

Verisign sues .xyz and Negari for “false advertising”

Handbags at dawn!
Verisign, the $7.5 billion .com domain gorilla, has sued upstart XYZ.com and CEO Daniel Negari for disparaging .com and allegedly misrepresenting how well .xyz is doing.
It’s the biggest legacy gTLD versus the biggest (allegedly) new gTLD.
The lawsuit focuses on some registrars’ habit of giving .xyz names to registrants of .com and other domains without their consent, enabling XYZ.com and Negari to use inflated numbers as a marketing tool.
The Lanham Act false advertising lawsuit was filed in Virginia last December, but I don’t believe it’s been reported before now.
Verisign’s beef is first with this video, which is published on the front page of xyz.com:

Verisign said that the claim that it’s “impossible” to find a .com domain (which isn’t quite what the ad says) is false.
The complaint goes on to say that interviews Negari did with NPR and VentureBeat last year have been twisted to characterize .xyz as “the next .com”, whereas neither outlet made such an endorsement. It states:

XYZ’s promotional statements, when viewed together and in context, reflect a strategy to create a deceptive message to the public that companies and individuals cannot get the .COM domain names they want from Verisign, and that XYZ is quickly becoming the preferred alternative.

As regular readers will be aware, .xyz’s zone file, which had almost 785,000 names in it yesterday, has been massively inflated by a campaign last year by Network Solutions to push free .xyz domains into customers’ accounts without their consent.
It turns out Verisign became the unwilling recipient of gtld-servers.xyz, due to it owning the equivalent .com.
According to Verisign, Negari has used these inflated numbers to falsely make it look like .xyz is a viable and thriving alternative to .com. The company claims:

Verisign is being injured as a result of XYZ and Negari’s false and/or misleading statements of fact including because XYZ and Negari’s statements undermine the equity and good will Verisign has developed in the .COM registry.
…
XYZ and Negari should be ordered to disgorge their profits and other ill-gotten gains received as a result of this deception on the consuming public.

The complaint makes reference to typosquatting lawsuits Negari’s old company, Cyber2Media, settled with Facebook and Goodwill Industries a few years ago, presumably just in order to frame Negari as a bad guy.
Verisign wants not only for XYZ to pay up, but also for the court to force the company to disclose its robo-registration numbers whenever it makes a claim about how successful .xyz is.
XYZ denies everything. Answering Verisign’s complaint in January, it also makes nine affirmative defenses citing among other things its first amendment rights and Verisign’s “unclean hands”.
While many of Verisign’s allegations appear to be factually true, I of course cannot comment on whether its legal case holds water.
But I do think the lawsuit makes the company looks rather petty — a former monopolist running to the courts on trivial grounds as soon as it sees a little competition.
I also wonder how the company is going to demonstrate harm, given that by its own admission .com continues to sell millions of new domains every quarter.
But the lesson here is for all new gTLD registries — if you’re going to compare yourselves to .com, you might want to get your facts straight first if you want to keep your legal fees down.
And perhaps that’s the point.
Read the complaint here and the answer here, both in PDF format.

.xxx boss says new gTLD registries need to “wake up”

ICM Registry president Stuart Lawley may be just weeks away from launching his second and third gTLD registries, but that doesn’t mean he has a positive outlook on new gTLDs in general.
“I think people need to wake up,” he told DI in a recent interview. “If you do the math on some of these numbers and prospective numbers, it just doesn’t stack up for a profitable business.”
“The new ‘Well Done!’ number seems to be a lot less than it was six months ago or 12 months ago,” he said.
Lawley said he’s among the most “bearish” in the industry when it comes to new gTLD prospects. And that goes for ICM’s own .porn, .sex and .adult, which are due to launch between March and September this year.
While he’s sure they’ll be profitable, and very bullish on the search engine optimization benefits that he says registrants could be able to achieve, he’s cautious about what kind of registration volumes can be expected. He said:

If you add up everybody that has ever bought a .xxx name, including the Sunrise B defensives, we have got a target market of about 250,000 names. People to go back to and say, “Look, you still have a .xxx or you had a .xxx at some stage. Therefore, we think you may be interested in buying .porn, .sex or .adult for exactly the same reasons.”
So, our expectations to sell to a whole new market outside of those quarter of a million names is probably quite limited.

Lawley said that he believes that the relatively poor volume performance of most new gTLDs over the last year will cause many registrars to question whether it’s worth their time and money to offer them.

I can see why registrars can’t be bothered. How many of these am I going to sell? Am I going to sell two hundred of them? Am I going to make five dollars per name? That’s one thousand dollars. It’s not worth it to me to put in ten thousand dollars worth of labor and effort to make one thousand dollars in revenue. So, I think that’s a challenge that many of the small lone player TLDs may face.

Lawley said he’s skeptical about the ability of major portfolio players, such as Donuts, to effectively market their hundreds of gTLDs, many of which are targeted at niche vertical markets.
He said in an ideal world a gTLD would need to spend $20 million to $30 million a year for a few years in order to do a proper PR job on a single TLD — ICM spent about $8 million to $9 million, $5.5 million of which was on US TV spots — and that’s just not economically viable given how many names are being sold.
But he added that he thinks it’s a good thing that some new gTLDs are seeing a steady and fairly linear number of daily additions, saying it might point to better long-term stability.

A lot of the TLDs that seem to be doing okay — .club for argument’s sake and several others in that ilk — seem to be doing their three hundred domains per day ADD, or 32 or 12 or whatever the number is, in a relatively linear fashion six or seven months after launch, which I think is potentially positive if one extrapolates that out.

The full interview, which also addresses SEO, dot-brands, registrar pay-for-placement and smart search, can be read by DI PRO subscribers here.