Yesterday the dramatic story about the situation with the new domain .WEB that thrilled the whole domain community for almost a month reached a final point. Domain .WEB was initially viewed as the most promising new gTLD and the only potential competition to .COM. That’s why it’s not surprising that owners of large domain portfolios such as Radix and Donuts and also “heavyweights” as Google were fighting for it.
One of the contenders was an unknown company Nu Dot Co (NDC). Its leading founders were two unknown firms as well, registered in March 2012 shortly before the deadline for applying for new domains. All of this was a clear statement that the powerful companies behind NDC don’t want to reveal themselves. Up to a point it didn’t cause any additional interest, however, the situation changed when unknown Panamanian company Primer Nivel won a private auction for the new gTLD .BLOG. It became known soon that Automattic, a company which owns one of the most popular blogging platforms in the world – WordPress, is behind Primer.
It caused quite understandable indignation among the rest of the auction bidders. According to the rules of private auctions, a part of the sum paid by the winner goes to other participants as compensation. If bidders for .BLOG knew that a company this big is behind Nivel they would have pushed up the price during the auction to get a more generous compensation. Contenders for .WEB feared that this would happen again during the private auction and tried desperately to find out who was behind NDC. Verisign was named more often than others, however, there was no proof.
Then came another surprise. Private auction for .WEB didn’t take place. Out of all seven contenders – NDC, Radix, Donuts, Schlund, Afilias, Google and Web.com – it was only NDC that was against. This automatically meant that the domain would be put to so-called last-resort auction conducted by ICANN. It also meant that NDC, which is not a valid registry and has no experience managing domains, seriously intended to get .WEB. And also leave competition without any compensation at all: according to the rules of last-resort ICANN auctions participants don’t get any payments, the whole amount paid by the winner goes to corporation’s special fund.
The auction was planned for July 27th. Registries that apply for .WEB did everything that they could to cancel or at least postpone it. During two weeks Radix, Schlund and Donuts at first sent an official letter and later an appeal to ICANN requiring a check on NDC. According to them, after NDC applied for domain .WEB the owner of the company has changed, which should have been reported to ICANN and wasn’t. All complains were dismissed. Then Donuts decided to play double or nothing 5 days before the auction and filed an appeal to court against ICANN. The suit had all the same requirements – to cancel the auction and check NDC. Moreover, Donuts accused ICANN for financial interest in conducting the auction, because the whole amount paid will go to corporation’s budget. Its own losses caused by ICANN’s actions the company estimated at $10 million.
However, the Court didn’t consider Donuts arguments to be even remotely convincing. The suit was dismissed and on July 27th the auction started. But haven’t finished – first time in the history of last-resort ICANN auctions ten hours and 15 rounds of bidding was not enough to determine the winner. It was decided that the auction would be continued on the next day. In the end NDC did win the auction, it paid 135 million dollars to the right to manage .WEB domain, ICANN reported. This is an absolute record of ICANN auctions, the amount paid for .WEB is almost 1.5 times higher than the revenue from all previous last-resort auctions all together. Moreover, it’s probably more than any amount paid for a gTLD in private auction, the financial results of which traditionally don’t get disclosed.
Finally, yesterday Verisign finally confirmed that it provided financial support for NDC to win at the auction. It is willing to get the right to manage domain .WEB in the near future. It’s unlikely now that the new gTLD will be a big competition to .COM since it is managed by Verisign as well.
