Digital Winner Microsoft $MSFT, Digital Loser Facebook $FB? (video)

2018's Most Spineless Board

L2inc.com video above published Nov 29, 2018--Scott Galloway's digital winners and losers--it's time for Facebook's Board of Directors to stand on their feet.

$MSFT

$FB

$AAPL

$AMZN

Auto-generated transcript:

00:00  A Winner: Microsoft earlier this week
00:04  Microsoft dethroned Apple even if just
00:07  for a minute as the most valuable firm
00:10  in the US boasting a market
00:11  capitalization north of 800 billion
00:15  dollars to be fair it's not that
00:16  Microsoft passed Apple but that Apple
00:19  fell below Microsoft shedding a quarter
00:21  of a trillion dollars in value as
00:23  analysts wonder if we've reached peak
00:25  iPhone what explains Microsoft success
00:28  or more specifically their staying power
00:31  two things first
00:32  diversity Microsoft maintains a diverse
00:35  revenue stream from software hardware
00:36  and cloud services meanwhile Alphabet
00:40  and Facebook are mostly ad dependent
00:42  Apple is a hardware firm and Amazon
00:44  relies mostly on product sales to
00:47  recurring revenue successful
00:49  organizations have convinced customers
00:51  to enter into a monogamous relationship
00:53  via recurring revenue streams think
00:57  Netflix Spotify and Amazon run what
01:00  Amazon Prime has done with the consumer
01:02  market Microsoft has done with the
01:04  business market visa vie their office
01:06  offering it's much easier to plan a
01:08  business against recurring revenue and
01:10  the market loves it a Loser the Facebook
01:14  Board of Directors our 2018 award for
01:17  most spineless and damaging Board of
01:19  Directors what is the role of a Board of
01:21  Directors care and duty specifically
01:24  serve as fiduciaries for stake holders
01:26  that includes teens that includes the
01:29  Commonwealth and of course shareholders
01:31  who have seen the value of their shares
01:33  shed a third of their value because of
01:36  irresponsible reckless negligent
01:39  behavior on the part of the CEO and the
01:42  CEO oh so at the end of the day what is
01:44  a board supposed to do they decide if
01:46  and when the company gets sold and to
01:48  hire and fire the CEO what has the board
01:51  done here nothing what should they do
01:54  first they should fire Sheryl Sandberg
01:57  the problem with a two-class shareholder
01:59  structure and the reason the SEC should
02:02  revisit the concept of banning all to
02:05  class companies or perhaps making it
02:08  such that when a company punched through
02:10  a hundred billion in market cap it
02:11  reverts to one class of stock
02:13  it has a ripple effect of unintended
02:16  consequences in the unintended
02:17  consequence here is that their COO that
02:20  should have been fired a year ago is
02:22  still here because quite frankly the
02:24  board does not want to be the board that
02:26  fires the woman in a sea of men in big
02:29  tech and that's a legitimate excuse
02:31  however she has made a billion dollars
02:35  and she will move on and do just fine
02:37  every day executives are fired for a
02:39  fraction of the infractions of Miss
02:42  Sandberg and the Zuck at the end of the
02:45  day the person ultimately responsible
02:47  for all of this reckless behavior that
02:49  this company is Mark Zuckerberg and he
02:52  should be removed from the CEO role he
02:55  should likely maintain his chairmanship
02:56  his DNA and programming genius is key to
03:00  retention of the value of this firm he
03:02  deserves to stick around he owned 16% of
03:05  the company however he can be fired and
03:08  this is how he could fight back he
03:11  controls 60% of the voting shares so if
03:13  he is removed from the CEO role it is
03:15  technically feasible that the next day
03:17  he removes the entire board what would
03:20  actually happen play this out the day
03:23  after he is removed from the CEO role he
03:26  fires his entire board that would be
03:29  utter chaos a five-car alarm alerting
03:33  legislators shareholder rights lawsuits
03:36  and governments globally we have to ask
03:38  would in fact the Zuck burn his castle to
03:42  save it the board should not be asking
03:44  this the board should be asking what is
03:47  the right thing to do as Emiliano Zapata
03:49  famously said it is better to die on
03:52  your feet than to live on your knees it
03:54  is time for the Board of Directors at
03:56  Facebook to stand on their feet ....

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News Review | ICANN Board Executive Committee, Conflicts of Interest

Domain Mondo's weekly internet domain news review (NR 2017-11-26) with analysis and opinion: Features •  1) ICANN Board Executive Committee, Conflicts of Interest, 2) ICANN news: a. ICANN61 Caravan, b. Public Comment Periods, c. 3 Peas in a Pod - ICANN is a "chummy private club", 3) Names, Domains & Trademarks:  a. DOJ Antitrust - ICANN & Verisign $VRSN Next?, b. ccTLD .au, c. GoDaddy $GDDY, d. SteelyDan.com, e. .COM Brand Credibility, f. Worth Reading, g. Good Advice, 4) ICYMI: Internet Freedom, 5) Most Read.

1) Executive Committee of the ICANN Board of Directors, Conflicts of Interest:

Background:

"A boardroom dispute over ethics has broken out at the organization that maintains the Internet address system after its most important supporter, the United States government, reproached the group for governance standards said to fall short of “requirements requested by the global community.” The Commerce Department said this month that while it was temporarily extending a contract with the Internet Corporation for Assigned Names and Numbers [ICANN] to manage the allocation of computers’ Internet protocol addresses ... it warned the organization that it needed to tighten its rules against conflicts of interest or risk losing a central role ... “ICANN must place commercial and financial interests in their appropriate context,” said Mr. [Rod] Beckstrom, who is scheduled to step down from his post [ICANN President & CEO] in July. “How can it do this if all top leadership is from the very domain-name industry it is supposed to coordinate independently? ..."--The New York Times March 18, 2012, under the title "Ethics Fight Over [new gTLDs] Domain Names Intensifies" (emphasis added).

"If one wanted to capture ICANN on a single issue, or a group of interrelated issues, the most practical tactic might be bribery" -- John C. Coffee Jr., Columbia University Professor of Law, IANA Transition advisor to the U.S. Department of Commerce (NTIA). See News Review [24Jul]: IANA Transition & ICANN Corruption, Capture, and Control.

Executive Committee of the ICANN Board of Directors (source: ICANN.org)

ICANN Board Executive Committee "(A) To the extent permitted by law, the Committee shall exercise all the powers of the Board during the interval periods between regular Board meetings when the Board is unavailable or unable to meet. (B) The Committee shall not have the authority to adopt, amend or repeal any provision of the Bylaws or take any other action which has been reserved for action by the full Board pursuant to the Bylaws, a resolution of the Board or which the Committee is otherwise prohibited by law to take."--Executive Committee Charter | As approved by the Board of Directors on 2 November 2017.

Membership and Leadership of ICANN Board Committees | ICANN.org: "Executive Committee: Cherine Chalaby (Executive Committee Chair)[also ICANN Board Chair]; Becky Burr; Chris Disspain [ICANN Board Vice Chair]; Göran Marby [ICANN President & CEO]."

Becky Burr, a former U.S. government lawyer, is employed by privately-held Neustar, a domain name registry operator and backend registry services provider for hundreds of new gTLDs. Neustar also owns another backend registry services provider, which Burr failed to disclose in her SOI (see below), ARI Registry Services, which reportedly was involved in the secret conflict of interest which caused the resignation of Kurt Pritz, ICANN's Chief Strategy Officer "best known as the architect of ICANN's new gTLD program" in 2012. A complete list of the new gTLDs and new gTLD applicants for which Neustar or ARI Registry Services is the designated backend registry services provider is not readily available on the ICANN website, but ntldstats.com provides some information (via its listings) for delegated new gTLDs: Neustar (223 new gTLDs) and ARI Registry Services (58 new gTLDs). 

Burr's SOI (Statement of Interest)(June 2017):
"J. Beckwith Burr: Vice President and Deputy General Counsel for Neustar, Inc., which contract [sic] with ICANN to operates [sic] .Biz and .Neustar, and which provides back-end registry services for numerous other gTLDs under contract with ICANN."

[Editor's note: Burr not only failed to disclose Neustar's connection with ARI Registry Services, but also failed to mention pending new gTLD applicants for which either Neustar or ARI Registry Services may be providing services, now or in the future.]

Chris Disspain is the former CEO of .au Domain Administration Ltd. (auDA), which terminated his contract in 2016. A question relating to Disspain while at auDA may be involved in this Freedom of Information request, but that request, unfortunately, was refused by the Australian government. I say "unfortunately" because allegations relating to ccTLD .au, its administration and management, have been a continuing saga, and may have no basis in fact or nothing to do with Disspain as auDA CEO (see item at 3)b. below). On the other hand, it's possible some of allegations may be both relevant (to Disspain as auDA CEO) and true.

Disspain's SOI (June 2017):
"Chris Disspain: Until March 2016, was Director and CEO of .au Domain Administration Limited, the .au ccTLD manager; .au has sponsorship agreement with ICANN under which .au pays ICANN a yearly amount based on the amount of names under management. .au Domain Administration Limited licenses AusRegistry Pty Ltd to run the registry for the second level names in .au. Under the Registry License agreement, AusRegistry pays fees to .au Domain Administration Limited; companies affiliated with AusRegistry are affiliated with new gTLD applications and registry operators." (emphasis added)

[Editor's Note: AusRegistry is also owned by Neustar (acquired with ARI Registry Services and other subsidiaries of Bombora Technologies Pty Ltd. in July 2015), which Disspain failed to note in his SOI. Disspain's LinkedIn profile also states he is Chairman of the Board of WGP Global (Oct 2014 – Present) and CEO of DNS Capital Ltd (2017), neither of which are disclosed in his SOI.]

Marby's and Chalaby's SOIs state only: "Nothing identified."

[Editor's note: "Nothing identified" is a very inadequate SOI response by any Director of a nonprofit public benefit corporation such as ICANN, accountable to the global internet community, not just to ICANN's jurisdictional authorities, the U.S. government and State of California. "Nothing identified" is a purely subjective response, and gives stakeholders and other third parties, no information upon which they might alert the Director, ICANN organization, or ICANN community, of a possible conflict (of which the Director may not even be aware, e.g., in connection with a large enterprise). To avoid even the appearance of impropriety, at a minimum, all ICANN Director SOIs should state the present, recent, and prospective relationships or positions (if known), of each Director with any non-ICANN entity (see, for example, Steve Crocker's SOI), with more specificity as to any interest or connection to any entity that does, or may do, business with ICANN or any of its contracted parties, or any of their subcontractors or suppliers, including consulting or professional services. As a sidenote, I am alarmed by ICANN Director George Sadowsky's SOI disclosure: "also in discussions with registry operator(s) for potential independent contractor relationship, but nothing yet in place." Without knowing more, it's possible one or more registry operators may be trying to improperly influence an ICANN director by promising a future "independent contractor relationship"--see Professor Coffee's comment (first above) about capture of ICANN through bribery. It wasn't that long ago that the entire new gTLDs program was forever tainted, not only by an unethical ICANN Board of Directors (see first link above), or the resignation of ICANN CSO Kurt Pritz due to a secret conflict of interest as noted above, but also by the controversial resignation of ICANN Board Chairman Peter Dengate Thrush after a key vote on the new gTLDs program, followed by employment of that former Chairman by a new gTLDs applicant's parent company. The ICANN Board's Code of Conduct and Conflicts of Interest Policy (more info here) are in need of review and amendments.]

Interestingly, Burr and Disspain have not gone through the due diligence screening process (background checks) that the ICANN Nominating Committee (NomCom) utilizes for ICANN Board membership, but apparently both have recently volunteered to do so. 

[Editor's note: review of the above gives one an understanding of how ICANN--the Board, organization, and "ICANN community"--could have been so grossly negligent as to outsource "technical feasibility" testing of all new gTLDs [see RA §1.2 Technical Feasibility of String] to the new gTLDs' hucksters, i.e., the new gTLDs applicants, knowing (since at least 2003) that most new gTLDs would "fail to work as expected on the internet" which was again recently confirmed (pdf). Anyone ever seen a new gTLD applicant's report on the technical feasibility of any of their new gTLDs? Most, if not all, of the hucksters didn't bother, "it's all about the money." No wonder some have called ICANN's new gTLDs program a global "consumer fraud" upon both registrants and end users, about which ICANN has done nothing to warn or educate consumers or otherwise make consumers "aware" of all the defects of new gTLDs--no one at ICANN wants to talk about this kind of "awareness program." "It's all about the money."  See also on Domain Mondo:

• News Review: ICANN, New gTLD Domain Names, Consumer Fraud

• New gTLD Domain Names, Defects, ICANN Liability, FTC Complaints

• News Review | Report: ICANN's New gTLDs As Global DNS Malware

Hopefully the lax standards of ICANN and its Board of Directors, identified above and elsewhere, will be corrected before long.  Until then, members of the global internet community may rightfully ask, "When will ICANN be run like a nonprofit public benefit corporation accountable to the global internet community, instead of just a 'chummy private club' licensed by the State of California?" ]

"Those that cannot remember the past are doomed to repeat it."--George Santayana

2) ICANN news

a. ICANN's 'Chummy Private Club' Caravan to ICANN61--CCWG-Accountability-WS2 Travel Funding for ICANN 61--If  ICANN didn't pay people to show up (including travel expenses, hotel, $60 per diem, $400 stipend), how many would bother to come? The people being paid to show up over and over again, are a small group of 'ICANN insiders' who (to paraphrase the words of former ICANN Board Chair Esther Dyson) pretend to represent the global internet community. The "gravy train" reports are published here. (Note: ICANN60 reports unavailable.)

b. Public Comment Periods Closing in December 2017 | ICANN.org: at 23:59 UTC on the respective dates indicated below (subject to change):

• Proposal for Cyrillic Script Root Zone‬ Label Generation Rules Dec 6 

• Internationalized Domain Name (IDN) Implementation Guidelines (2nd) Dec 10 

• Enhancing Accountability - Recommendations for Diversity Dec 15 

• Recommendations to Improve ICANN's Office of Ombudsman (IOO) Dec 22 

c) 3 Peas in a Pod

New #icann venue, same old friends 🤗 pic.twitter.com/ZRYHgjJ3Tp

— Frank Schilling (@Frank_Schilling) October 31, 2017

Uniregistry's 3000% Frank Schilling, with his pals ICANN GDD President Akram Atallah and ICANN GDD VP Cyrus Namazi at ICANN60. ICANN is a "chummy private club."
 
3) Names, Domains & Trademarks

a. Antitrust Enforcement: First AT&T, ICANN and Verisign $VRSN Next? 

"ICANN is just a scam and the entire industry is based on monopolistic fraud with DC payoffs."--Mike Mann, domain names registrant and domainer, March 30, 2017.

President Trump's new head of the U.S. Department of Justice Antitrust Division, Makan Delrahim, brings the Trump administration's first major antitrust enforcement action: AT&T, U.S. Prepare to Battle in Court Over Time Warner Merger | Bloomberg.com Nov 20, 2017: "The legal challenge ... [deals] a blow to a tie-up that appeared to be sailing toward approval as recently as a month ago. That was before Delrahim was appointed to his post. “This merger would greatly harm American consumers,” he [Delrahim] said Monday. “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”

[Editor's note: Maybe Delrahim can do something about monopolists ICANN and gTLD registry operators, which are shamelessly price-gouging consumers (registrants) in the United States and worldwide. For background, see this and this. See also: News Review | Global Public Interest: Why ICANN Will Always Be A #FAIL.]

b. ccTLD .au: Review of Australia’s .au domain management | Department of Communications and the Arts | gov.au: "seeking feedback on the management of the .au domain to ensure it remains fit for purpose in serving the needs of Australians online."  Consultation Period: Nov 16, 2017 16:00 AEDT to Dec 18, 2017 17:00 AEDT. Review of Australia’s .au domain management - Discussion paper for Review of Australia’s .au domain management published 16th Nov 2017: Download PDF (393.02 KB). More info at the first link above, and at Lexology.com.

c. GoDaddy (NYSE:GDDY): Goldman Sachs has added GoDaddy to its hedge fund VIP list. Shares of the top five companies on that list--Facebook, Amazon, Alibaba, Google, and Microsoft--have outperformed the S&P 500 by 770 basis points this year--SeekingAlpha.com.

d. SteelyDan.com: Donald Fagen has sued Walter Becker's estate, alleging the Becker estate is improperly asserting control over the Steely Dan name, specifically, the band's website [domain: steelydan.com], which the estate currently operates, and that Becker's estate has not "relinquished or shared control of that domain name with Fagen" and "absent an injunction… will continue to misappropriate Steely Dan's website and otherwise inappropriately use the Steely Dan name.""--RollingStone.com.

e. How to make your brand look credible for overseas customers | startups.co.uk: 1. Get a .COM domain name. [Editor's note: the default TLD for business in the U.S., and globally, is .COM (and will continue to be for the foreseeable future despite all the misinformation coming from inept ICANN and its new gTLDs' "partners.") More info here.]

f. Worth Reading: The Big Issues in the Domain Industry - Part 2 | whizzbangsblog.com.

g. Good Advice: Only buy what (domains) you need | OnlineDomain.com.

4) ICYMI Internet Domain News 

• Only 23% of the World Has a Free and Open Internet | Nextgov.com. [Editor's Note: soon to be far less than 23%--see next item below.]

• U.S.: Ajit Pai and the FCC want it to be legal for Comcast to block BitTorrent | TheVerge.com: "Pai says his rules will “significantly reduce the likelihood” ISPs like Comcast will engage in behaviors that harm consumers. Not prevent, mind you, but reduce the chances. Such trust in market forces to work in a broadband market where 51 percent of Americans only have one choice of broadband provider! And if there is harmful behavior? Well, it won’t be so bad because at least we didn’t impose regulatory costs on Comcast and Verizon." [Editor's note: sounds like FCC Chair Ajit Pai is reading from the same playbook as inept ICANN. The sh*t hits the fan on December 14--Orwellian agenda item: "Restoring Internet Freedom."]

• Pakistan: Study: Internet Freedom Worsens in Pakistan | VOAnews.com: "Pakistan among the top four countries, including Brazil, Mexico and Syria, where people have been murdered in each of the last three years for writing about sensitive subjects online."

• China: Cyberspace Administration of China (CAC) Rejects Censorship Critics, Says Internet Must Be 'Orderly'--VOAnews.com.

• U.S.: Defense Department Spied On Social Media, Left All Its Collected Data Exposed To Anyone | Techdirt.com: "I know that the US government still has this "collect it all" mentality, but as we've discussed over and over again, adding more hay to the haystack doesn't make it easier to find the needles."

5) The Four Most Read Posts (# of pageviews Sun-Sat) this past week on DomainMondo.com: 

1. News Review | Incompetent Lawyers, Domain Names & ICANN's UDRP

2. How Apple, Google, Microsoft, Amazon & Facebook Make Their $Billions

3. Quad9: A Safer Internet Experience, A Free Global DNS Service

4. Retail Trends: Death of the Department Store, Is It Too Late? (video)

-- John Poole, Editor, Domain Mondo 

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DISCLAIMER

ICANN a Steward? LOL! This Is How ICANN Wastes Registrants' Money

UPDATE (emphasis added) [CCWG-ACCT] See Photos from Last Night's AFRALO Showcase/Fadi Tribute in #ICANN55:

Dear Eberhard,
Thank you for your question. The Afralo showcase and tribute to Fadi was held on Monday night. The 2 purposes were combined so that they don’t conflict on the schedule and to save logistics and costs. The entire event cost approximately $106,000 to ICANN which was planned for 1200 people. The Afralo showcase (musicians, dancers,…) was paid for by Afralo. In case of interest, ICANN has previously held a community farewell cocktail for exiting CEOs at their last meeting. The cost of this is typically between $50,000 and $60,000. The additional $40,000 we had to pay this time was for the fitted out marquee including AV. This was required on this particular occasion as no other room large enough to accommodate the entire community was available. I hope this is helpful and addresses your question.
Best,
Xavier Calvez
CFO, ICANN

"Thank you very much.
I am shocked at the amount of money ICANN has to waste.
That does put the pressure being applied with regards to funding of WS2
into perspective.
greetings, el"  [Dr Eberhard W Lisse]

[--end of UPDATE--]

From the CCWG-Accountability public email list: [CCWG-ACCT] See Photos from Last Night's AFRALO Showcase/Fadi Tribute in #ICANN55:

"Xavier [Xavier Calvez, ICANN CFO],
I have received the below.
How much did this extravaganza cost ICANN?
greetings, el"
[Dr Eberhard W Lisse - CCWG-Accountability member, representing ccNSO, from the African Region]

"Camels, Drummers And Hundreds of ICANNers: Last Night's AFRALO Showcase And Fadi Tribute Was A Hit!

"Monday's night Tribute to Fadi was a lively affair. Hundreds of ICANN55 participants filled the Orion Tent at the Palmeraie Golf Palace and Resort to enjoy the food, hear traditional Moroccan music and honor Fadi Chehadé's legacy.  Many took to the stage during the evening's festivities including: El Mountassir Billah Azdine, Director General of the National Agency for Regulation of Telecommunications; Xiaodong Lee, CEO & CTO, China Internet Network Information Center; Demi Getschko, Member of the Board, Brazilian Internet Steering Committee; Rinalia Abdul Rahim, ICANN Board Member  and Board Chair Steve Crocker. If you didn't get a chance to take your own camel selfie, you can download last night's photos from ICANN's Flickr account here."--source: ICANN55 newsletter (links added)

The "Fadi" referred to is Fadi Chehade, ICANN's outgoing President & CEO, who gave notice last year that he was quitting ICANN with 2 years left on his contract, and after having served only 2 1/2 years (with a salary+benefits package in the range of $1,000,000+ annually).

Domain Mondo is sure that all domain name registrants worldwide (who fund the bulk of ICANN's wasteful spending), and U.S. Senator Ted Cruz et al, will all be interested to see how ICANN is such a "good steward" of money. Wait until ICANN is no longer subject to U.S. government oversight when the IANA stewardship transition is finished!

Here is an ICANN tweet from last night's "Tribute to Fadi"--

Packed tent at #ICANN55 Fadi Tribute! Happening now at Orion. pic.twitter.com/C7VjWjPEkt

— ICANN (@ICANN) March 7, 2016

Does anyone wonder what would happen if a government official in the U.S. spent taxpayer funds like ICANN officers and directors spend registrants' taxes fees? How about officers and directors of a publicly listed Fortune 500 corporation who engaged in this kind of corporate waste?

It is important to know what YOU ARE NOT ALLOWED to Discuss @ #ICANN55
Never compare #ICANN to BELL CALIFORNIA https://t.co/V7o8JF2khz #OOS

— Techno.CAT.® (@Techno_CAT_R) March 8, 2016

See also on Domain Mondo:

• US Senators Cruz, Lankford, Lee's New Letter to ICANN Chairman re: China
• After Wuzhen, Should ICANN President & CEO Fadi Chehade Be Fired?
• US Congressman Tells ICANN CEO To 'Abandon' IANA Transition
• What Caused ICANN President and CEO Fadi Chehadé To Quit?
• GNSO Calls for Independent Accountability Body to Oversee ICANN
• ICANN Exists for Itself and Insiders, to Exploit Domain Name Registrants
• ICANN Intends to Become Accountable, Too Little Too Late?
• The REAL Domain Hogs: ICANN Officers, Staff, Lavish Pay, Benefits, Accountability Risks Institutionalized

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One 'Must Read' For Those Attending ICANN55, Marrakech, March 5-10

Are you attending, in person or remotely, ICANN55 in Marrakech, Morocco, March 5-10?

Are you troubled by ICANN's pivot towards, and 'unrelenting propaganda' about, new generic top-level domain names (“new gTLDs”)?

Are you tired of ICANN pushing 'garbage extensions' to a user base that 'quietly knows better' ?

Isn't it time for ALL of the failed leadership at ICANN, including its Board of Directors, to resign?

Below is the Rightside (NASDAQ:NAME) shareholder letter published by the S.E.C. on March 1, 2016. A similar letter could also have been sent to the ICANN Board of Directors for their failed leadership and corruption of ICANN (ref. also Dr. Paul Vixie), in propagating the new gTLDs program. The ICANN Board has failed to act in the global public interest as steward of the global DNS.  Highlighted sections of the letter below are as applicable to ICANN as they may be to Rightside. Like Rightside, ICANN is a U.S.-based corporation, legally controlled by its Board of Directors.  Directors owe fiduciary duties. ICANN stakeholders do not owe fiduciary duties. 

EX-99 2 Exhibit_99.htm EXHIBIT 99 (source: U.S. Securities and Exchange Commission) (emphasis added)

February 19, 2016

Mr. David E. Panos
Chairman of the Board
Rightside Group, Ltd.
5808 Lake Washington Boulevard NE
Suite 300
Kirkland, WA 98033

Dear Mr Panos

I am troubled by the pivot toward, and unrelenting propaganda about, new generic top-level domain names (“GTLDs”). Whilst I concede that new GTLDs are one of many opportunities in the emerging market for second generation domain names, Rightside Group, Ltd. (“Rightside”, “NAME”, or our “Company”) is the second-largest domain name registrar, a business that is here and now. I don’t hear Rightside speaking to this strength. Our Company glosses over this critical revenue component and plays up new GTLDs at the expense of the revenue contribution made by the traditional registrar business.

The user interfaces at eNom and Namejet look and feel clumsy and stale. Looking past the main page of NAME’s sites, the logged-in front-end infrastructure is untouched and acts like time capsule to what existed half a decade ago. Most of our growth in names under management is coming from a reseller channel that is out-executing your own in-house registrar eNom.

While I am a believer in new GTLDs, it is going to be many years before their revenue in any way materially approaches the revenue potential of our registrar operations. In my view, NAME’s registrar has become like a crazy aunt kept in the basement, one that you refuse to adequately clothe or feed, but who steadfastly spins straw into gold used to subsidize a stable of largely substandard new GTLDs such as .democrat, .dance, .army, .navy, and .airforce. Most of these new GTLDs are irrelevant and will never be sold in material volumes. NAME is holding back the growth potential of your registrar by pushing garbage extensions to a user base that quietly knows better.

Rightside is a gem in that it has many assets which are unique or difficult to duplicate. Cannell Capital LLC would not have acquired 1,389,953 shares otherwise. We have some good new domain-endings as well, with .news being one example, but this particular domain-ending and a clutch of others like it do not constitute enough of a “front” to gloss over the majority of your extensions which are low in value and should be spun-off. I believe that we should sell or even abandon some of our worst extensions. They should not consume all the resources of our Company at the expense of the assets that are currently profitable.

The current members of the Board of Directors and indeed many of your shareholders don’t seem to recognize this. I do. Today I stand up to be that paladin. To wit, I submit both a plan and a request: (i) Unify all Company products under the eNom.com brand; (ii) Terminate no less than 20% of your weaker staff; (iii) Move the Name.com entity to Seattle under the eNom.com brand and close expensive ancillary offices; (iv) Rebuild and relaunch the front-end infrastructure at eNom.com to bring it to the current standard expected by consumers; (v) Refinance all debt; and (vi) Add two new board members with a suggestion, but not a requirement that two incumbents resign.

I would prefer to avoid waging an expensive proxy battle to elect my own slate of directors. Such a fight would be costly to both myself and our Company. It is my sincere hope that substantive discussions between myself and the current Board of Directors could result in the infusion of fresh blood without such a fight.

Best Regards!

Sincerely,
/s/
J. Carlo Cannell
Cannell Capital LLC

--end of letter--

See also on Domain Mondo: ICANN Damaged a Competitive Domain Name Market With Its New gTLDs

Editor's note: a copy of this post has been sent to Steve Crocker (Chairman of the iCANN Board of Directors), Larry Strickling (NTIA, US Department of Commerce), and select members of the U.S. Congress. 


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DISCLAIMER

Caveat ICANN: FIFA Bans Blatter and Platini For Conflict of Interest (video)

FIFA Bans Blatter and Platini From World Soccer -  FIFA President Sepp Blatter and the head of European soccer, Michel Platini, have been banned from world soccer for eight years by a FIFA ethics committee for "Conflict of Interest."  Published on Dec 21, 2015 by WSJ.com.

What would happen at ICANN in a similar situation? The evidence indicates conflicts of interest, or inappropriate conduct with parties having vested interests ("stakeholders"), by ICANN Officers (and staff) are tolerated, ignored, or even encouraged and rewarded! Who's legally responsible? Ultimately the ICANN Board of Directors under California law. Has the ICANN Board of Directors been held accountable for its failure to have in place or enforce an effective Code of Conduct for all ICANN officers and staff? Of course not! That's the reality of ICANN accountability, now, and probably in the future, despite all the talk of "enhancing ICANN accountability"--see, e.g., on Domain Mondo: this, this, this, this, this, this, this and this.

Will ICANN Ever Adopt & Enforce a Code of Conduct for @ICANN Officers and Staff? https://t.co/bCCXwPqYrc #Conflicts #Corrupt #ICANN

— Domain Mondo (@DomainMondo) December 21, 2015

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DISCLAIMER

IANA Transition, ICANN Accountability, "Has Always Been About POWER"

How to capture ICANN: "The first thing we do, let's spill all the Board members."*

*With apologies to William Shakespeare: Shakespeare's line ''The first thing we do, let's kill all the lawyers,'' was stated by Dick the Butcher in ''Henry VI,'' Part II, act IV, Scene II, Line 73. Dick the Butcher was a follower of the rebel Jack Cade, who thought that if he disturbed law and order, he could become king. Shakespeare intended it as a compliment to attorneys and judges who instill justice in society. (source)

"... At least the USG (US government) offers some accountability. ICANN's primary active stakeholders are businesses making money off the DNS; most users are too busy elsewhere to pay much attention..."--Esther Dyson, ICANN's founding Chairman, Sept 22, 2015

"Sole Member given reserved power under Bylaws to override Board decision directly, regardless of Board fiduciary duties." - Legal counsel for CCWG-Accountability (pdf) opinion on 2nd draft

"WS1 has always been about power"--Jonathan Zuck, CCWG-Accountability participant, infra 

The biggest problem that the global multistakeholder community (a/k/a the global internet community which is a lot larger and broader than just ICANN's relatively small "stakeholder community"), has right now is that so many members and participants comprising the CCWG-Accountability are engrossed in their own groupthink that they apparently have not taken the time to actually read and analyze all the public comments to their own "fundamentally flawed" 2nd Draft Report which is supported overall by only 19 out of 90+ comments. If you read the CCWG mail list regularly, you will discover that many, if not most, CCWG members are actually operating under the delusion that the global multistakeholder community supports their proposed "power grab." 

Indicative of this state of "denial" or what might be called ignorant arrogance among CCWG-accountability members and participants are the remarks made on the CCWG public mail list by Philip Corwin, who represents a group known as the "Internet Commerce Association," of which major supporters include new gTLDs registry operator Donuts, and other domain name industry "players." Here's an excerpt from Corwin's response to Domain Mondo's post China (CAICT) Objects to ICANN CCWG Accountability 2nd Draft Proposal:

"If the CCWG Proposal is a "power grab" then it's the sorriest excuse for one I've ever seen. It is almost exclusively a proposal for greater defensive rights in reaction to ICANN Board/corporate actions, and would hardly put "vested self-interested special interests ("ICANN stakeholders" or "lobbyists")" in charge of the enterprise." -- Phil Corwin, September 25, 2015 

I suggest Mr. Corwin, (and all other CCWG members and participants), take the time to read carefully all the comments to the 2nd draft report and then take note of the following post on the CCWG mail list by the President of the Association for Competitive Technology (ACT), after which, hopefully, they might actually be more "informed and enlightened" and less consumed by their own "ignorant arrogance"--

"WS1 has always been about power and WS2 about implementation. WS1 was never going to be complete and, for that matter, WS2 won’t ever be complete either. That said, if we have the power to spill the board with relative ease, we can easily reconvene, flesh out the member model, submit it to the board and spill them if they aren’t constructive. We don’t need to worry about deadlines, the Congress, NTIA, etc. the whole point of WS1 is to ensure the capability to do just this." Jonathan Zuck, President of ACT and CCWG participant, September 29, 2015 (emphasis added)

Clearly and succinctly said Mr. Zuck! Sounds like a neat way to hijack or supplant ICANN Board authority and bypass any encumbering "fiduciary duties." The use of the word "constructive" above is clearly a euphemism for "submissive." It's all about the "power." The problem, as noted, is that the mostly profit-seeking, self-interested ICANN stakeholders, or "lobbyists," do not have the ICANN Board of Directors' fiduciary duties to the global internet community, nor the fiduciary duty to operate in the "global public interest." By their own self-admission, most ICANN stakeholders are self-seeking, self-interested, profit-making individuals and enterprises, who are primarily interested in their own "agendas" not what is in the "global public interest." That job is usually left to either governments, trustees, or a carefully selected Board of Directors held to fiduciary standards. While ICANN stakeholders should have input into ICANN policy-making, (and I know this may come as a "shock" to some of those stakeholders), they are hardly "infallible." Of course, directors, even though held to fiduciary standards, can still, from time to time, "fail," which is why "enhanced ICANN accountability," in the absence of US government oversight, needs to have "means or methods" whereby any member of the global internet community can seek redress of a Board decision, action, or adopted ICANN policy, which violates ICANN's articles, bylaws, or the Board's fiduciary duties to the global multistakeholder community and the global public interest. The ICANN Board says they agree and have offered suggested "means or methods" by which such redress can be provided. Other accountability "enhancements" or requirements, including, for example, transparency (e.g., record requests etc.), can easily be provided to any member of the global internet community by having appropriate provisions in ICANN's bylaws, none of which requires implementation of the proposed Single Member Model (SMM or CMSM) which, understandably, the ICANN Board does not support.

(Updated October 1, 2015)

-- John Poole, Editor, Domain Mondo

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DISCLAIMER

China (CAICT) Objects to ICANN CCWG Accountability 2nd Draft Proposal

Fiduciary Duty: "Definition: A fiduciary duty is a legal duty to act solely in another party's interests. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals. Fiduciaries may not profit from their relationship with their principals unless they have the principals' express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries' other clients. A fiduciary duty is the strictest duty of care recognized by the US legal system. Examples of fiduciary relationships include those between a lawyer and her client, a guardian and her ward, and a director and her shareholders." -- Legal Information Institute (link above) (emphasis added)

CCWG's CMSM to #ICANN Board: "Forget Your Fiduciary Duties, Do As We Say OR You Are Fired!" http://t.co/cg0ecAUiHR @realDonaldTrump

— DrivingTheDay (@DrivingTheDay) September 24, 2015

UPDATE September 24, 2015: CCWG-Accountability "On the Way to LA" to hijack the Global DNS from the Global Multistakeholder Community through their deceptively named CMSM or "Community Mechanism as Sole Member" Model which allows select groups of ICANN "stakeholders" to override ICANN Board decisions and disregard the ICANN Board's fiduciary duties to the global multistakeholder community including the Board's fiduciary duty to act in the global public interest at all times.

"... At least the USG (US government) offers some accountability. ICANN's primary active stakeholders are businesses making money off the DNS; most users are too busy elsewhere to pay much attention..."--comment of Esther Dyson, ICANN's founding Chairman, in The Guardian, Sept 22, 2015

"Sole Member given reserved power under Bylaws to override Board decision directly, regardless of Board fiduciary duties." - Legal counsel for CCWG-Accountability (pdf) opinion on CCWG 2nd draft

China's CAICT has joined others in objecting to the power grab by the "ICANN community stakeholders" a/k/a ICANN insiders to the exclusion of the "global Internet community" in the most recent CCWG-Accountability 2nd Draft Report (pdf) which proposed a Single or "Sole Member" Model (comprised by only select ICANN stakeholder groups) to be "on top" over the ICANN Board of Directors and control ICANN, said Sole Member having no accountability to the global Internet community nor fiduciary duty to act in the global public interest--in fact one leading member of the CCWG has responded to an ICANN Board Member on the CCWG mail list and noted that with the "Sole Member Model" the ICANN Board will no longer have to worry about breaching "fiduciary duties" (to the global multistakeholder community a/k/a global internet community, e.g., or to act in the global public interest)--

"Members don't owe fiduciary duties generally speaking, just as the organisations that would comprise the member (the SOs and ACs) don't today. The [ICANN] Board's members do. The existence of a membership system modifies those duties for Board members - they do not breach fiduciary duties in implementing a decision a member has made. This could be a rabbit hole but the point is that the member option has more flexibility in determining matters and does not create impossibilities for the Board where it does so. That's a design feature of the choice of membership." -- Jordan Carter, CCWG-Accountability member (emphasis added)

Rabbit hole? "Down the rabbit hole" - a metaphor for an entry into the unknown, the disorientating or the mentally deranging, from its use in Alice's Adventures in Wonderland. source: Rabbit hole - Wikipedia

Meanwhile, China's CAICT has joined with others and objects to the CCWG's 2nd Draft Report--

"... We believe, in designing a voting system, the most important element that need to be considered is the representation of the global Internet community, instead of the representation of the ICANN community. Therefore, geographical balance should be an important element in terms of allocating the votes in the community; users' representation and the interests of developing countries should be properly considered too. For instance, Internet users in Asia exceed 1.4 billion, accounting for 45% of the world users. If there's no votes or extremely limited votes for Asian representatives, then this voting system is not appropriate..." -- Comment (pdf) submitted by China Academy of Information and Communication Technology (CAICT), September, 2015, Beijing, China, in response to CCWG-Accountability's 2nd Draft Report (emphasis added)

The above echoes other comments made, including the following submitted to the ICG mail list by Richard Hill on September 20, 2015:
Dear ICG,
A portion of the work of CCWG-Accountability is directly related to the transition proposal that you are coordinating. CWG-Accountability does not have, as far as I know, a public comments forum
such as the this one, and it does not accept comments from the general public, so I'm posting this message here and requesting that it be forwarded to CWG-Accountability. I refer to the draft summary of comments on the CWG-Accountability proposal published at: http://mm.icann.org/pipermail/accountability-cross-community/attachments/20150915/8167a9d5/2nd-draft-CCWGtrends-v4-0001.pdf
I detail below my concerns.
1. Who are the stakeholders? [in other words, the Global Multistakeholder Community or just certain "ICANN stakeholders"?]

Slide 2 of the PDR referenced above presents a "Stakeholder Distribution of Comments Received". The identified categories of stakeholders are:
* Governments
* ccTLDs
* Advisors to the CCWG-Accountability
* Chartering Organizations
* CWG-Stewardship
* Technical Community
Does this imply that individuals and civil society organizations are not stakeholders? Does this imply that comments from individuals and civil society organizations were not considered?
2. Misleading statistics
Slides 8 ff. of the PDF present breakdowns of responses. For example, it is stated that 27 responses agreed that the CCWG-Accountability proposal enhances ICANN's accountability while 61 did not provide an answer. It may be correct that 61comments did not explicitly answer that question, but at least six responses did answer it negatively, albeit implicitly ... The statistics presented are misleading because they imply that "did not provide answer" implies support for the proposal, which is not necessarily the case ..."

Domain Mondo has previously noted the CCWG-Accountability publishing misleading representations of the public comments received to the 2nd Draft Report. The CCWG-Accountability is scheduled to meet with members of the ICANN Board this Friday and Saturday. Maybe the ICANN Board of Directors can at least do something about the CCWG leadership publishing "misleading statistics." The CCWG-Accountability is looking more and more like an "insider deal" favoring the vested self-interested special interests ("ICANN stakeholders" or "lobbyists") who have always wanted to totally control and financially benefit from ICANN policy-making, to the exclusion of "outsiders" (a/k/a global multistakeholder community or "global Internet community") and to the detriment of the "global public interest." With US (NTIA) stewardship in place, the lobbyists could never totally control ICANN--now is their chance.

See also on Domain Mondo:

• Only 19 of 90 Comments Support ICANN Accountability Proposal Overall (Sept 22, 2015) 
• ICANN CCWG-Accountability Co-Chair Comments on the Public Comments (Sept 15, 2015) 
• FIFA Corruption Scandal, Lessons For ICANN and IANA Transition (May 27, 2015)

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DISCLAIMER

Comments Overwhelmingly Oppose URS for CAT and PRO gTLDs

Comments closed 7 Jul 2015 23:59 UTC on:

Proposed Renewal of .CAT Sponsored TLD Registry Agreement--all comments are here. 

Proposed Renewal of .PRO Unsponsored Registry Agreement--all comments are here.

ICANN staff has only one supporter--Intellectual Property Constituency (IPC)--the trademark lobbyist (a/k/a stakeholder) organization within ICANN whose President, Trademark Attorney Greg Shatan, filed the lone comment "supporting" ICANN staff's attempt to apply new gTLDs' URS provisions in the renewal of incumbent gTLDs registry agreements. Even the ICANN Business Constituency (BC) filed an "opposition" comment, stating, in part:

"... our concern is that a unilateral decision by ICANN contractual staff to take the new gTLD registry agreement as the starting point for renewal RAs for legacy gTLDs has the effect of transforming the PDDRP and the URS into de facto Consensus Policies without following the procedures laid out in ICANN’s Bylaws for their creation. The fact that these RPMs are present in all three proposed renewal RAs referenced in this letter reinforces that conclusion..." (emphasis added)

In Domain Mondo's opinion, the unilateral actions taken by ICANN staff in recent months raise legitimate questions as to whether Intellectual Property stakeholders may be exercising undue influence over ICANN officers and staff--how else to explain: (1) ICANN staff's attempt to bypass policy-making procedures and bylaw requirements (see BC comment above) and apply the URS in three incumbent gTLD RAs--.TRAVEL, .CAT, .PRO--as well as (2) ICANN officers and staff's attempt to throw under the bus dotSUCKS Registry Operator Vox Populi without any finding of breach of the Registry Agreement or other wrongdoing, but just because the IPC sent ICANN one letter? Why didn't ICANN just respond by telling the IPC to file a complaint with the FTC or OCA? If the IPC (or any special interest stakeholder group within ICANN) says "jump," do ICANN officers and staff only ask "how high?" The entire world saw what the US Federal Trade Commission and Canada's OCA thought of the whole ICANN dotSUCKS fiasco.

To be clear, this has nothing to do with the merits of the various positions taken by the IPC, some of which Domain Mondo happens to agree with, e.g., who is in favor of exorbitant or extortionate domain name registration pricing schemes? Certainly not domain name registrants! No, this is about integrity of process, transparency, accountability.

Questions:

1. Is this any way to run a global multi-stakeholder organization that claims it is ready to be "free of US government oversight"?
2. Doesn't the global multi-stakeholder community deserve better performance from ICANN staff and officers than indicated above?

The "ICANN Staff Report" is already way "overdue" on .TRAVEL with no explanation on the ICANN website. What are they waiting for? Who are they conferring with? Are ICANN Officers and staff plotting strategy with interested stakeholders? We have no way of knowing. This is ICANN transparency and accountability?

In most organizations the rot starts at the top. "Accountability," is a word ICANN loves to preach, but rarely practices. And, unfortunately, the ICANN Board of Directors has allowed ICANN CEO Fadi Chehade to laden ICANN with his personal "cronies" in most top positions--a burden for the next ICANN CEO to deal with, along with ICANN's out-of-control spending, including lavish salaries and benefits. The ICANN Board needs to start holding ICANN staff and officers accountable by asking some direct questions of ICANN Global Domains Division President Akram Atallah. If the Board can't get straight answers and reasonable explanations by those in leadership positions, then perhaps the Board needs to start taking action by telling Akram Atallah (or others) to follow, or precede, "his buddy" Fadi Chehade "out the door." That's called real "accountability."

For additional background, see on Domain Mondo:

• ICANN Staff Report OVERDUE on Proposed Renewal of .TRAVEL Registry
• Most Comments OPPOSE ICANN Extending URS Policy to dotTRAVEL
• ICANN is NOT a new gTLDs Marketing Agency: ICANN 53 Review, Part 3
• The dot SUCKS Conundrum: ICANN, FTC, OCA, New gTLD Domains
• What Caused ICANN President and CEO Fadi Chehadé To Quit?
• The REAL Domain Hogs: ICANN Officers, Staff, Lavish Pay, Benefits, Accountability Risks Institutionalized

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ICANN, Parasites, Consultants, Directors, Feeding at the Public Trough

ICANN, Parasites, Consultants, Directors, Feeding at the Public Trough--and ICANN transparency and accountability--referenced below: ICANN FY13 Form 990--

Checking in with George Kirikos:

You can see why the parasites attend #ICANN meetings, when $130 million is being spent on "consultants" (e.g. new gTLDs evals, etc.)
— George Kirikos (@GeorgeKirikos) October 31, 2014

#ICANN spent over $130 MILLION on "professional services" in 2013+2014 http://t.co/PHR6zH2dpb (page 7) Little of that was shown in Form 990.
— George Kirikos (@GeorgeKirikos) October 31, 2014

#ICANN Board Members feasting at the public trough, $2 million in compensation/expenses http://t.co/gYMr64Pu3y #oink #greed #accountability
— George Kirikos (@GeorgeKirikos) October 31, 2014

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