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The Lowdown

September 2006 Archive

Here's the The Lowdown from DNJournal.com! Updated daily to fill you in on the latest buzz going around the domain name industry!

Compiled by Ron Jackson (Editor/Publisher)


ICANN has issued a preliminary report on their September 25 board meeting at which pending contract renewals for the .org, .info and .biz registries were discussed. Public comment on those contracts was almost unanimously opposed to the agreements which would leave the door open for unlimited price hikes in domain registrations and renewals. The report says "The Board discussed a sense of the board that additional information was required for the Board to fully consider the agreements, and the Board specifically expressed a desire to see communications from each of the registries responding to the public comments that had been received during the public comment period. The Board agreed that if they received the responses before October 10th, that they would discuss the pending agreements again during their next scheduled board meeting on 18 October 2006." 
Posted Sept. 29, 2006

Meanwhile opposition also continues to a pending new agreement for Verisign to operate the .com registry. Yesterday one of the world's largest registrars, Network Solutions (ironically a company once owned by Verisign), called on the National Security Telecommunications Advisory Committee (NSTAC) to review the proposed .com agreement between ICANN and VeriSign. Network Solutions asked NSTAC, which provides advice to the President on communications issues related to national security and emergency preparedness, "to immediately assess the critical security concerns that the .com registry proposal poses for the Internet." The Network Solution statement added "The .com proposal is pending before the U.S. Department of Commerce for review. ICANN’s Board of Directors in February narrowly approved the agreement, which includes automatic renewal terms and up to $1.3 billion in cumulative, guaranteed price increases that would not have to be directed toward security improvements or otherwise justified. The proposal fails to provide a minimal level of ICANN oversight and security risk mitigation, omitting contractually enforceable requirements for security reporting, testing, monitoring and risk analysis."
Posted Sept. 29, 2006

New figures from the Interactive Advertising Bureau show that 2nd quarter spending on online advertising in the U.S. jumped 37% from last year's number. Spending for the quarter this year hit $7.9 billion. In individual categories, display advertising lost some ground to search, with display's share of the market dropping from 34% to 31% (search attracts 40% of online ad spending). Standard & Poor’s analyst Scott Kessler told the Financial Times that advertisers are shifting some money to online classified ads, referrals and lead generation. The FT article also has more details on the spending slowdown Yahoo! reported in certain categories last week.
Posted Sept. 26, 2006

In another sign of the times, The NewYork Times Company posted disappointing August earnings results late last week, with overall ad revenue falling 3.8% from the same month last year. While the company's print divisions languished, there was one bright spot...you guessed it...online revenues. Internet revenue jumped 17.3% above August 2005. The previous summer months were even better with July web revenues up 27.5%  compared to last year, June rising 23% and May climbing 27%. The Times and Business Week both published prominent articles about click fraud this past week and while that is certainly an issue of concern, you have to wonder how much of the motivation behind such articles is related to print media bashing of a new medium that is literally eating their lunch. Advertisers have also been shortchanged by print media through inflated circulation numbers and on TV where viewers zip past expensive commercials on their digital video recorders. There is no doubt that outright fraud needs to be stopped in every medium, but in today's imperfect world there is still nothing that beats online when it comes to being able to track return on your advertising dollar. 
Posted Sept. 25, 2006

The new .mobi extension opens for public registration Tuesday morning (Sept. 26) when the two-week land rush period begin at 10am U.S. Eastern time. Some of the biggest names in the wireless and internet industries are sponsoring, supporting and developing applications for .mobi, including Ericsson, Google, Microsoft, Nokia, Samsung, T-Mobile and Vodafone, but it remains to be seen how warmly the extension, meant for sites tailored for use on cellphones and mobile devices, will be received by domain registrants. 
Posted Sept. 23, 2006

Local search continues to enjoy rapid expansion. A new report from Borrell Associates predicts that local search advertising expenditures will hit $1.8 billion next year and that total spending on geo-targeted online advertising will soar 32% in the next year to $7.7 billion. This is obviously good news for owners of geo domains and it could also help country code domains, like .us, that are local by nature. Bob Heyman has more on what is happening in local search (including capsule reviews of several new local oriented websites) in a column he wrote for MediaPost.com today (free subscription required to read).
Posted Sept. 22, 2006

We've commented frequently on the migration of advertising dollars from old line media to the web. Advertisers are chasing readers and viewers who have moved from newspapers, radio and TV to the Internet. The encouraging thing for domain owners (whose PPC revenues are provided by advertisers) is that the flood of ad money is just starting to wash over the web. This was confirmed again yesterday when Ken Lowe, the President and CEO of E.W. Scripps Co. (one of America's top newspaper chains), told an audience at Cincinnati's Xavier University, ""Right now, eyeballs are shifting to the web faster than dollars." Of course, the dollars will catch up with the eyeballs that are now focused squarely on the Internet. Scripps is a newspaper company that is transforming itself into a modern Internet content company. Lowe told the Cincinnati Enquirer that revenue from the company's Internet sites, from comparison shopping to broadband shows on how to remodel your bathroom, now accounts for 13% of Scripps' total revenue - and will be even more once the effectiveness of Internet advertising is demonstrated to advertisers who haven't yet made the move.
Posted Sept. 21, 2006

ICANN was under the microscope during a U.S. Congressional hearing today and the organization also learned it will likely be reigned in by the U.S. Department of Commerce, the government body that oversees the California-based group that makes domain name policy. Commerce assistant secretary John Kneur said the DOC plans to renew a memorandum of understanding with ICANN, "but it will likely add provisions designed to address complaints that the group is sometimes too secret and makes decisions that don't reflect the Internet community at large," Kneur said. ICANN has come under blistering criticism in the past month for proposing new contracts for the .org, .info and .biz registries that would allow them to charge any price they wish for domain registrations and renewals. There is more on that in our September newsletter. During the Congressional hearing today, Christine Jones, general counsel for GoDaddy.com Inc., said ICANN should be given a roadmap "to regain the confidence of the community it serves." She also echoed complaints that ICANN's recent decision to extend a contract with VeriSign Inc. to manage .com and .net names came without enough input from the Internet community. More details on the Commerce decision and Congressional hearing can be found in articles at Yahoo and MacWorld.
Posted Sept. 20, 2006

Some major domains and large portfolios have changed hands recently but unfortunately price information was not released on some of the larger deals. For example, InterSearch Group announced the acquisition of Banks.com, a domain that fits in nicely with their financial services portfolio that already includes IRS.com. InterSearch Chairman and CEO Dan O’Donnell said “We expect Banks.com will appeal to our advertising partners in such areas as mortgages, refinancing, credit cards, loans and other premium search terms." Also today, Oversee.net announced it has acquired 10 domain portfolios over the last two months. Oversee CEO Lawrence Ng said, “Oversee has accelerated its program to purchase domain portfolios. Because of our history in this space, domainers know we understand the dynamics of the industry and can quickly evaluate their portfolios. DomainSponsor is uniquely qualified to understand and exploit the value of domains, due to its proprietary technology and superior monetization expertise.”
Posted Sept. 20, 2006

Podcasting domains should benefit from the rapid growth in that technology. In a new article at Online Media Daily (free subscription required to read), author Murgesh Navar talks about Finding the Money in Podcasting. Navar says ad revenues for podcasters are expected to jump anywhere from 15-30% this year. The technology is especially hot with young people (a demographic advertisers always seek out). According to Arbitron 11% of Americans say they have listened to a podcast and more than half of those are under age 35. Major radio companies like Clear Channel are starting to offer podcast versions of their radio programs to take advantage of the new distribution channel that allows the audience to listen whenever and wherever they want. As  mainstream broadcasters adopt podcasting, they are expected to bring their existing advertisers with them which will further increase recognition and adoption of the new medium.
Posted Sept. 19, 2006

ICANN has posted the minutes from their Sept. 7 board meeting at which members were given a summary of the overwhelming opposition to new contract agreements with the .org, .info and .biz registries (see details in earlier posts below) that had been posted on ICANN's public comment boards. No action was taken on the contracts. Instead, the minutes say "the board directed staff to post the summary of the public comments for review by the public...the board agreed to discuss these agreements further at its next meeting." In the meantime, contract opponents are continuing to sign an online petition asking the U.S. Congress to intervene at BadForBusiness.org.
Posted Sept. 15, 2006

The future of ICANN and Internet governance will be looked at by the U.S. Senate Commerce, Science, and Transportation Trade, Tourism, and Economic Development Subcommittee during hearings scheduled to start at 10am Wednesday, Sept. 20 on Capitol Hill. Congress is currently being petitioned by domain registrants who are vehemently opposed to proposed new contracts for the .org, .info and .biz registries that would allow them to charge any price they wanted for domain registrations and renewals. Many critics say ICANN is violating it's Agreement of Understanding with the U.S. Department of Commerce by failing to negotiate reasonable prices for services rendered in the proposed contracts with registries that have been given a monopoly over these global TLDs by ICANN. We have more on this in our September newsletter.  
Posted Sept. 13, 2006

A new article published by the American Chamber of Commerce in Egypt has some interesting background on rising interest in International Domain Names (IDNs) and the possibility of a fully Arabic language domain system emerging soon. In the wide-ranging article written by Rashad Mahmood, you need to scroll down to the section with the heading "The Final Domain" for his take on IDNs and other comments he gathered from current IDN investors.
Posted Sept. 12, 2006

ICANN has released the staff summary from their Sept. 7 board meeting in which widely opposed new contracts for the .org, .info and .biz registries were discussed. The summary details the wide range of objections posted against the contracts during a 30-day public comment period that ended August 28. The board was told that a "majority" opposed approval of the contracts which is technically true, but the board would have been given a much truer picture of the depth of opposition if they had been told that sentiment against the proposals was virtually unanimous with more than 1,000 unique posters against approval and less than 5 in favor. In one important line it was noted that "Staff reported during the Board meeting that negotiations with the registries are already underway regarding clarification of the issues surrounding differential pricing." Differential pricing is not prohibited in the proposed contracts which means the registries could charge different prices for different domains (as well as charging any amount they wished for any domain renewal or registration). 
Posted Sept. 11, 2006

A number of major registrars and domain industry organizations have signed and sent ICANN a letter asking the organization to put off action on proposed new .org, .info and .biz registry contracts that have raised a firestorm of protest from domain registrants. The letter, signed by GoDaddy, DirectI, Network Solutions, Tucows and Register.com, among others, notes "Under the ICANN bylaws, the Generic Names Supporting Organization (GNSO) has primary responsibility for developing gTLD policy. In recognition of this fact, the GNSO earlier in 2006 launched a policy development process to identify consensus policy for existing gTLD contracts. That PDP, called PDP 06, is progressing, with recommendations scheduled to be issued by the end of 2006." Signatories to the letter want ICANN to wait until those recommendations are delivered before making any contract decisions.
Posted Sept. 10, 2006

With local advertisers migrating to the web (see item below), the plight of newspapers seems to get worse daily. The Boston Herald is slashing an average of six pages from its daily edition to save money according to a report in the Boston Business Journal. The Herald's editorial director Kenneth Chandler said the move was prompted by business realities and competition from the Internet. "We've tried to cut in a way that isn't too obvious to readers," Chandler said.
Posted Sept. 9, 2006

A new report from research firm Borell Associates Inc. predicts that local online advertising will soar 32% to $7.7 billion in 2007. Almost a fourth of that amount will go to the fastest growing category, paid local search. The lion's share will still go to local banners and listings which are expected to increase 18% percent to $5.6 billion. The numbers show that the global web is quickly going local and attracting ad dollars that used to go exclusively to traditional media outlets that serve limited geographic areas, such as local newspapers, radio and TV. 
Posted Sept. 8, 2006

We understand that ICANN will not make a decision today on the controversial proposed new contracts for the .org, .info and .biz registries (see multiple items below for more background on the issues involved). The overwhelming public opposition to the contracts was to be discussed at the board meeting with a decision to come at a later date. Minutes from the meeting should be posted on the web within the next few days. We will let you know when that happens.
Posted Sept. 7, 2006

The .US registry, in partnership with Vendare Media, has quietly rolled out a local information network based on zip codes, that includes every single American zip code in the .us extension. Check any zip code, for example, the one for our Tampa, Florida office, 33625.us, and you will see what they have started doing. More local content will be added to the sites and the registry expects the network to dramatically increase .us recognition. The registry had reserved all 5-number domains from the beginning, so they owned the complete set when the deal was struck with Vendare to handle the development. Marchex.com has built a similar network with .com and .net domains but does not have the complete set of zip codes in one extension, so it will be interesting to see how the competition between the two networks plays out.
Posted Sept. 6, 2006

Adam Chibib has joined Internet REIT (iREIT.com) as its new Chief Financial Officer. Chibib was most recently CFO of TippingPoint Technologies, where he helped grow company revenues from $5.7 million to $33.3 million in one year. Chibib was also the chief negotiator in the 2005 sale of TippingPoint to 3Com Corporation for approximately $430 million. Chibib has over fifteen years of experience in mergers and acquisitions, general management, investor relations, finance and accounting, deal structuring and leadership in both public and private high-tech firms. He was awarded the Ernst & Young Entrepreneur of the Year Award in 2002. iREIT CEO Bob Martin said, “iREIT is at a point in our development where we will benefit immensely from the experience, financial discipline and relationships that Adam brings to the company.”
Posted Sept. 6, 2006

ICANN has moved the date of their special board meeting to consider the widely vilified new contract proposals for .org., .info and .biz registries up from Sept. 13 to Thursday, Sept. 7. The proposals, which for the first time would allow the registries to charge anything they wanted to for domain registrations and renewals (even different prices for different domains), were almost universally condemned during the 30-day public comment period that ended August 28. Now we will see if ICANN pays any attention to Internet users, or ignores the public outcry and hands the keys to the store over to the registries they are supposed to regulate. In the meantime, we urge you to sign the online petition asking the U.S. Congress to intervene at BadForBusiness.org.  Americans can also make their voice heard by going to Congress.org where you can  enter your zip code in the box in the upper left corner to bring up direct email links to your Congressmen. This will allow you to quickly lodge protests directly with them.
Posted Sept. 5, 2006

If you've been out of the loop lately, catch up in the Lowdown Archive!

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