Facebook gunning for Web.com in latest $27 million-plus cybersquatting lawsuit

Facebook has sued what it believes is a Web.com subsidiary, claiming the company has been engaged in wholesale cybersquatting for well over a decade.

The complaint, filed in a Pennsylvania District Court, alleges that New Venture Services Corp current owns 74 domains, and has previously owned 204 more, that infringe its Facebook, Instagram and WhatsApp trademarks.

While no other named defendants are listed, the complaint makes it abundantly clear that it believes NVSC is a subsidiary of Web.com and a sister of Network Solutions, Register.com, SnapNames and Perfect Privacy.

Facebook is suing partly under the Anti-Cybersquatting Consumer Protection Act, allowing it to claim $100,000 damages per infringing domain, so we’re looking at a floor of $27.8 million of potential damages should the lawsuit be successful.

But it’s also looking for NVSC to hand over any profits it’s made from the domains in question, which are generally parked with ads and listed for sale via the SnapNames network for premium fees.

While NVSC is registered in the British Virgin Islands and uses a Pennsylvania post office box as its mailing address, there’s a wealth of evidence going back to 2007 that it’s been affiliated first with NetSol and then Web.com.

Web.com’s last regulatory filing before it went private in 2017 lists NVSC as a subsidiary, which is probably the most compelling piece of evidence establishing ownership.

It appears that NVSC is a shell company that Web.com uses to hold potentially valuable or traffic-rich domains that its customers have allowed to expire. The names are then parked and put up for resale.

Example domains listed in the complaint include httpinstagram.com, faceebbok.com, facebooc.net, instagram-login.com, and installwhatsapps.com.

One would have to assume these names were captured using a fully automated process; even a cursory human review would clock that they’re useful only to bad actors.

The lawsuit is the latest in Facebook’s crusade against mainstream registrars it believes are profiting by infringing its trademarks, which has already ensnared Namecheap a year ago and OnlineNIC in October 2019.

Namecheap recently filed a counterclaim in which it tries to get some of Facebook’s trademarks cancelled.

Facebook has all but admitted that putting legal pressure on registrars is part of its strategy when it comes to getting the policies it wants out of ICANN on privacy and Whois access, where there’s currently an impasse.

Here’s the complaint (pdf).

ICANN expects to lose 750 registrars in the next year

ICANN is predicting that about 750 accredited registrars will close over the next 12 months due to the over-saturation of the drop-catching market.
ICANN VP Cyrus Namazi made the estimate while explaining ICANN’s fiscal 2018 budget, which is where the projection originated, at the organization’s public meeting in South Africa last week.
He said that ICANN ended its fiscal 2017 last week with 2,989 accredited registrars, but that ICANN expects to lose about 250 per quarter starting from October until this time next year.
These almost 3,000 registrars belong to about 400 registrar families, he said.
By my estimate, roughly two thirds of the registrars are shell accreditations under the ownership of just three companies — Web.com (Namejet and SnapNames), Pheenix, and TurnCommerce (DropCatch.com).
These companies lay out millions of dollars on accreditation fees in order to game ICANN rules and get more connections to registries — mainly Verisign’s .com.
More connections gives them a greater chance of quickly registering potentially valuable domains milliseconds after they are deleted. Drop-catching, in other words.
But Namazi indicated that ICANN’s cautious “best estimate” is that there’s not enough good stuff dropping to justify the number of accreditations these three companies own.
“With the model we have, I believe at the moment the total available market for these sought-after domains that these multifamily registrars are after is not able to withstand the thousands of accreditations that are there,” he said. “Each accreditation costs quite a bit of money.”
Having a registrar accreditation costs $4,000 a year, not including ICANN’s variable and transaction fees.
“We think the market has probably gone beyond what the available market is,” he said.
He cautioned that the situation was “fluid” and that ICANN was keeping an eye on it because these accreditations fees have become material to its budget in the last few years.
If the three drop-catchers do start dumping registrars, it would reveal an extremely short shelf life for their accreditations.
Pheenix upped its registrar count by 300 and DropCatch added 500 to its already huge stable as recently as December 2016.

Neustar to auction .nyc premiums during New York Fashion Week

Neustar is to release a batch of reserved, fashion-related .nyc premium domains to coincide with next month’s New York Fashion Week.
Twenty-four names, including clothes.nyc, fashion.nyc, salon.nyc, models.nyc and shop.nyc will be released via an auction, the company said in a press release.
SnapNames will manage the auction at Auctions.nyc from February 1 to February 28. This period includes the duration of New York Fashion Week, which starts February 9.
It’s the second batch of premiums released by Neustar, which runs .nyc on behalf of the City of New York, after a real estate-themed auction in 2016.
That auction resulted in modestly priced sales including realestate.nyc ($21,300) and apartments.nyc ($16,155).

Pheenix adds 300 more registrars to drop-catch arsenal

The domain drop-catching arms race is heating up, with budget player Pheenix this week acquiring 300 more registrar accreditations from ICANN.
According to DI records, the company now has almost 500 registrar accreditations in its family.
More accreditations means more registry connections with which to attempt to acquire expired domains as they return to the available pool.
It also means that Pheenix’s dropnet (a word I just made up that sounds a bit like “botnet” in a pathetic attempt to coin a term for once in my career) is now a bit bigger than that of Web.com, the registrar pool behind Namejet and SnapNames.
It’s still a long way behind TurnCommerce, owner of DropCatch, which two weeks ago added a whopping 500 new accreditations, bringing its total to over 1,250.
An extra 300 accreditations would have cost Pheenix over $1 million in up-front ICANN fees and will incur ongoing fixed annual fees in excess of $1.2 million.

Web.com acquires dozens of registrars from Rightside

Web.com has acquired dozens of registrars from rival/partner Rightside, seemingly to boost the success rate of its SnapNames domain drop-catching business.
I’ve established that at least 44 registrars once managed by Rightside/eNom have moved to the Web.com stable in recent weeks, and that might not even be the half of it.
All of the registrars in question are shell companies used exclusively to register pre-ordered names as they are deleted by registries, usually Verisign.
The more registrars you have, the more EPP connections you have to the Verisign registry and the better your chance at catching a domain.
Web.com runs SnapNames, and is in a 50-50 partnership with Rightside on rival drop-catcher NameJet.
The two compete primarily with NameBright’s DropCatch.com, which obtained hundreds of fresh ICANN accreditations last year, bringing its total pool to over 750.
Web.com has fewer than 400 accreditations right now. Rightside has even fewer.
It’s usually quicker to buy a registrar than to obtain a new accreditation from ICANN.
If Web.com finds itself in need of more accreditations in order to compete, and Rightside is happy to let them go, it could be possible to infer that SnapNames is doing rather better in terms of customer acquisition than NameJet.
But the two services recently announced a partnership under which names grabbed by either network would be placed in an auction in which customers of either site could participate.
This would have the effect of increasing the number of caught names going to auction due to there being multiple bidders, and thus the eventual sales prices.

Seller’s remorse despite .club leading $1m NamesCon auction

The Right Of The Dot and SnapNames auction here at the NamesCon conference in Las Vegas last night raised just shy of $1 million, in what attendees broadly seem to agree was a successful event.
The grand total was $990,851, with 87 out of the 134 lots hitting their reserve and selling during the live/online bidding.
Leading the pack was homecare.com, which sold for $350,000.
But that deal actually closed before the live event began, leaving .CLUB Domains’ wine.club at the top of the sold list with a winning $140,000 bid.
Despite the sale, registry CEO Colin Campbell — evidently disappointed he had not placed a higher reserve on the name, expressed some seller’s remorse on Twitter this morning.

After selling .CLUB for 140,000 in auction I was a bit depressed. Is this normal? It was my favorite. #namescon pic.twitter.com/xMRIIzTFiT

— Colin.club (@ColinDotClub) January 14, 2015

.CLUB also offloaded reserved names weed.club ($16,000), fight.club ($13,500) and tequila.club ($8,000), among others.
.com of course had the best night, with carauctions.com going for $90,000, susan.com going for $34,000 and tik.com and vil.com both going for $33,000.
Organizer Mike Berkens took a $76,000 hit on sexeducation.com, which he purchased for $100,000 and sold without reserve for $24,000.
Also noteworthy was what I believe was the biggest bid of the night — a $1.2 million in-room bid for auctions.com, owned by .xyz registry CEO Daniel Negari.
The domain failed to meet its reserve, however, and will join the other unsold names in an extended online auction that begins this weekend.

SnapNames acquired by Web.com

Web.com has acquired domain name dropcatcher SnapNames for an undisclosed sum, according to press releases from it and former owner KeyDrive, confirming reports from Friday.
Web.com said the deal will be “immaterial” to its 2014 financial results.
The Nasdaq-listed company already owns leading registrars Network Solutions and Register.com. It’s also a new gTLD applicant, one of many companies having applied for .web.
KeyDrive acquired SnapNames, along with the registrar Moniker, from Oversee.net in 2012.
Just last week KeyDrive announced that Moniker, which with SnapNames had been managed by Craig Snyder, was getting a new CEO in the form of Key-Systems exec Bonnie Wittenberg.

Moniker gets a new CEO

KeyDrive has appointed Bonnie Wittenburg, Key-System USA executive vice president, as the new CEO of sister registrar Moniker.
She replaces Craig Snyder, who was CEO of Moniker and SnapNames and remains CEO of SnapNames. Wittenburg keeps her EVP roles at Key-Systems.
“Through her expanded role she will drive cooperation and develop a synergistic relationship between the KeyDrive members,” the company said in a statement.
The KeyDrive stable also includes Key-Systems, NameDrive and KS Registry.
Wittenberg is a 15-year veteran of the domain name industry, with previous stints at Network Solutions and Iron Mountain.

Rogue registrar suspended over “stolen” domain

ICANN has told Turkish domain name registrar Alantron that its accreditation will be suspended for a month due to its shoddy record-keeping.
The suspension, which will become effective March 8, follows an investigation into allegations of double-selling.
ICANN issued the suspension last Thursday after trying unsuccessfully for almost three months to get its hands on Alantron’s registration records.
The company now has until March 28 to sort out its compliance problems or face losing its accreditation entirely.
I understand the investigation was prompted by complaints filed by an American named Roger Rainwater over the potentially valuable domain name pricewire.com.
Pricewire.com spent a couple of years under Whois privacy but was grabbed last August by Turkish registrant Altan Tanriverdi, according to historical Whois records.
Rainwater, who says he had been monitoring it for three or four years, subsequently paid Tanriverdi an undisclosed sum for the domain, signing up for an Alantron account so it could be pushed.
Rainwater showed up in the Whois for pricewire.com on September 7 last year. But he says he was unable to change his name servers and 48 hours later the name disappeared from his account.
He says he was told by Alantron that it had put the domain in Tanriverdi’s account “by mistake” and that it was sold to SnapNames as part of a batch of dropping domains.
According to emails sent to Rainwater, seen by DI, Alantron said that pricewire.com was “registered via a partner company called Directi for a company called Snapnames”.
SnapNames had already auctioned the name – apparently there were more than 40 bidders – and the name has since been transferred to one Sammy Katz of Philadelphia.
However, given that Whois reliability is at question here, it’s not entirely clear who owns it. It’s currently parked at InternetTraffic.com.
Tanriverdi, who appears to be equally aggrieved, has published an extensive history of the dispute, along with screenshots, here (in Turkish).
In short: Alantron stands accused of double-selling pricewire.com.
ICANN’s compliance team has been unable to get its hands on the underlying transaction data despite repeated attempts because Alantron apparently doesn’t have it.
Its suspension notice alleges that Alantron was running two registration systems in parallel and that they weren’t talking to each other, resulting in the same name being sold to two parties.
Read ICANN’s suspension notice in PDF format here.

Moniker and SnapNames join Key-Systems stable

KeyDrive has acquired rival registrar Moniker and rival aftermarket player SnapNames from Oversee.net, according to a statement on the company’s web site.
The deal, which closed in January, would make the combined company the sixth-largest ICANN-accredited registrar, with over 5.4 million domains under management, KeyDrive said.
KeyDrive formed with the merger of German registrar Key-Systems and aftermarket services provider NameDrive last July. It’s based in NameDrive’s native Luxembourg.
The deal gives the primarily European company an additional footprint in the US market. Moniker is based in Florida, SnapNames in Oregon.
It’s a not-too-soon exit for Moniker, which had a disappointing 2011 largely defined by the super-fast churning of domains under management and the regular canning of staff.
I’ve been hearing rumors that the two Oversee units were on the auction block for months.
It’s the fifth significant piece of M&A in the registrar market in the last six months, following the sale of Go Daddy and Group NBT to private investors, Tucows’ acquisition of EPAG and NetSol’s move to Web.com
Terms of the acquisition have not been disclosed. Indeed, there does not appear to have been an official announcement yet, beyond the KeyDrive home page.
The deal was first reported by DomainNameNews.
More details as they come in.