News Review | Caveat Emptor: ICANN & New gTLD Domain Names

Domain Mondo's weekly review of internet domain news:

Features • 1) New gTLD Domain Name Registrants Caveat Emptor: ICANN & New gTLD Domain Names, 2) Tweets of the Week, 3) ICANN Accountability Work Stream 2 slippage, 4) Names, Domains & Trademarks: A Brave New World Without Sunrises or the TMCH? 5) ICYMI Internet Domain News: We Need A New Internet and the IETF is a Mess, 6) Q1 2017 Earnings Season: Qualcomm April 19, 7) Most Popular.

1) Caveat Emptor Registrants: ICANN Says New gTLDs' Domain Names May Not Work As Expected on the Internet--

"WTF ICANN?"

"1.2 Technical Feasibility of String. While ICANN has encouraged and will continue to encourage universal acceptance of all top-level domain strings across the Internet, certain top-level domain strings may encounter difficulty in acceptance by ISPs and webhosters and/or validation by web applications. Registry Operator shall be responsible for ensuring to its satisfaction the technical feasibility of the TLD string prior to entering into this Agreement."--ICANN Base Registry Agreement (pdf), updated 09 January 2014 (emphasis added).

ICANN press release April 11, 2017: "... According to one study, 13 percent of websites reject new domain names with more than three letters [in the TLD (top-level domain)] ... many applications still do not accept the new domains [new gTLD domain names]. Universal Acceptance [UA] has progressed [even] less for IDNs than for gTLDs ..." (emphasis added) (Editor's note: ICANN has known about this UA problem since at least 2003 and yet the greedy, grossly negligent, and incompetent ICANN decided to proceed with its new gTLDs program, collect the money, and delegate over 1200 new gTLDs knowing they would "break stuff," without any disclosures or warnings to the general public or domain name registrants!)

Add to the above the fact that ICANN's new gTLDs come with no limitations as to future price increases to consumers (domain name registrants).  Unlike .COM domain names, that shiny new gTLD domain name that cost you $XX this year to register could cost you $XX,000 next year to renew, and ICANN is in the process of deleting the requirement that new gTLD registry operators notify ICANN about price increases--better not put your new gTLD domain name on "auto-renew."

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

How did ICANN come to screw up its new gTLDs program so badly? There's plenty of blame to go around--inept ICANN leadership compounded by rampant conflicts of interest, incompetence, and cronyism, the effects of which continue to this day, but if I had to choose a single point failure it would be ICANN's decision to not follow the advice they were given by the U.S. Department of Justice Antitrust Division (pdf) via the U.S. Department of Commerce (NTIA) (pdf) in December, 2008:

U.S. Dept. of Justice Antitrust Division advice to ICANN (Dec 8, 2008), supra, p.2

See also on Domain Mondo: Global Public Interest: Why ICANN Will Always Be A #FAIL and New gTLDs Failing, ICANN58 Ends, ICANN in La La Land.

2) Tweets of the Week: 
(a) @DomainKing on ICANN's new gTLDs:

Remember one thing, there was no clamor by a single consumer on earth for new extensions. They don't care. Never will. #newgTLDS #Domains

— Rick Schwartz (@DomainKing) April 10, 2017

(b) @SwiftOnSecurity on new gTLD .TOP:

I'm not sure what ICANN is doing, but .top is so bad that the friggen registrar is blacklisted in our Palo Alto when I try to go there.

— SwiftOnSecurity (@SwiftOnSecurity) April 12, 2017

Editor's note: What's ICANN doing? Nothing but collecting the money--.TOP is the second largest new gTLD in registrations--mostly in China (78%)--having a 15.4% market share among all new gTLDs.

3) ICANN Accountability-Work Stream 2 slippage, March 2017 status (updated 10 Apr 2017):

Note: Jurisdiction subgroup (see below), will miss its target date for completion of work. 3 other subgroups--Diversity, Ombuds Office, and Review of the CEP--are "behind schedule:"

Above: excerpt from Activity Dashboard embedded in full further below

CCWG Plenary,
I have attached a "discussion draft" of the Jurisdiction Subgroup's Revised Work Plan and Schedule.  While this was first reviewed at the Subgroup's meeting earlier today, it was based on earlier discussions in the Subgroup.--Greg Shatan, Rapporteur, April 12, 2017  --[see embed below, highlighting added]

• CCWG-WS2 public mail list: http://mm.icann.org/pipermail/accountability-cross-community/2017-April/013888.html
• The WS2-jurisdiction April 2017 Archive by date
• http://mm.icann.org/pipermail/ws2-jurisdiction/
• [Ws2-jurisdiction] Notes, recordings and transcript for WS2 Jurisdiction Subgroup Meeting # 26 | 11 April 2017: Next meeting 18 April 1900 UTC

CCWG-Accountability WS2 Activity Dashboard updated 10 April 2017:

4) Names, Domains & Trademarks

• A Brave New World Without Sunrises or the TMCH?--Review of all Rights Protection Mechanisms (RPMs) in all gTLDs PDP Working Group | ICANN.org--see mail list topics here. 

• Registrar, Registry, Domain Name…A Quick Primer… | Buchanan Ingersoll & Rooney PC | JDSupra.com: "... “What other documentation would be part of a domain name transfer (or sale)?” Excellent point. Beyond the processes above, if you are transferring a domain name to or from a third party, we generally recommend the parties enter into a Domain Name Transfer and Assignment Agreement that specifies domain to be transferred, the consideration to be paid between the parties (and when such amounts are paid), and contains at least three key concepts (sample wording for each is provided below) ..."

• India's Growing Internet Penetration and the Power of .COM by Prakhar Bindal | businessworld.in 12 Apr 2017: "So, even if you need to pay a little extra to get the domain name of your choice, it is almost always worth it. India’s growing online penetration spells a world of opportunity for Indian small businesses ... Choosing the right domain extension also matters. 79 percent of the SMBs in India currently prefer .com over other TLDs. Trust and the need for a professional image are the primary reasons driving this preference. This is in line with the global trend, where .com remains the most widely used TLD across the world ..."

• CEP and IRP Status Update – 14 April 2017 | ICANN.org  (pdf)

• TICK DIFFERENT – But Apparently Not All That Different? | Winthrop & Weinstine, P.A. | JDSupra.com: "... Swiss watchmaker Swatch AG finds itself embroiled in another trademark dispute with Apple, Inc. – this time, for the trademark TICK DIFFERENT. Swatch applied for the trademark in Switzerland, which Apple has challenged before the Swiss Federal Administrative Court. Apple, you may recall, coined the slogan THINK DIFFERENT in connection with a 1997 ad campaign ..."

• Trade Mark Scams - Beware of Unofficial Notices | Lexology.com

• Christian Dior sues more Chinese websites for selling fakes | SecuringIndustry.com

• No False Advertising Where There Is No Injury or Statements Are Opinions | McDermott Will & Emery | JDSupra.com: citing Verisign, Inc. v. XYZ.com LLC, Case No. 15-2526 (4th Cir., Feb. 8, 2017).

5)  ICYMI Internet Domain News 

• We Urgently Need a New Internet | circleid.com:  "... Unfortunately however, the current internet cannot be fixed. So we need a new one. My colleague Martin Geddes has written an excellent article on why the old net is broken and why it can't be fixed ..."
• Mend, Don't End, the IETF | circleid.com: "First things first: Martin is right. The IETF is a mess ..."
• The benefits and harms of e-commerce on competition law | Dentons | JDSupra.com
• DDoS attacks abusing exposed LDAP servers on the rise | InfoWorld.com: "Abusing the vulnerability could generate a "DDoS wildfire," Ixia's Murarasu said. It's also easy for attackers to find BIND servers that can be abused because all they have to do is set up a malicious nameserver to send a response and scan the internet for nameservers that respond with a large query."
• Why HTTPS Won't Keep Your Internet Usage Habits Secret | Inc.com: HTTPS will not protect you from an ISP that wants to sell information about your Internet usage habits.
• DDoS attack takes out Melbourne IT DNS servers | arnnet.com.au
• Wordpress hard pressed by malicious javascript and trojans | scmagazine.com
• Recognizing Access to the Internet as a “Basic Need,” Rejecting Blanket Bans on Internet Use, and Raising Questions as to the Scope of Monitoring Personal Computers | Wilentz, Goldman & Spitzer P.A. | JDSupra.com
• Beware ICANN Groupthink: "Groupthink is when a group of individuals on a project become overly insular and fail to rely on outside thinking or fresh perspective.--Blattel Communications | JDSupra.com.

6) Q1 2017 Earnings Season coverage on Domain Mondo this coming week:

Qualcomm NASDAQ: QCOM (Domain: qualcomm.com) --Apr 19, 2017, 4:45pm EDT Qualcomm Q2 FY17 Earnings Conference Call--this Domain Mondo coverage due to pending Apple vs Qualcomm litigation.

See also: Why We Think We’re Better Investors Than We Are | NYTimes.com: "Studies have revealed significant overconfidence in the judgments of scientists, lawyers, engineers, doctors and those in other professions ..."

7) Most popular post (# of pageviews Sun-Sat) this past week on DomainMondo.com: News Review | ICANN & Its New gTLDs: Pedophilia's Best New Friends?

-- John Poole, Editor, Domain Mondo 

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DISCLAIMER

MacroView: A Political Assassination, Yet Major Indexes' 5th Record Close

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”--Warren Buffett

Domain Mondo's review of  macro economic and investing news:

MacroView Feature • Political Assassination, Yet Major Indexes' 5th Record Close:

•  Major U.S. stock market indices continued their extended Trump Rally run on Wednesday, February 15, 2017: Stocks set another round of records as Trump pledges ‘massive’ tax plan | MarketWatch.com: "Major indexes see record close for 5th session in row"--

S&P 500 Index up 8.6% Nov 9, 2016-Feb 15, 2017 (source: google.com)

Nevertheless count me out--alarms are going off--is anyone listening?

The Political Assassination of Michael Flynn | Bloomberg.com: "... it's strange that Flynn's "lie" to Pence would get him fired. It doesn't add up ... In the end, it was Trump's decision to cut Flynn loose. In doing this he [Trump] caved in to his political and bureaucratic opposition. Nunes told me Monday night that this will not end well. "First it's Flynn, next it will be Kellyanne Conway, then it will be Steve Bannon, then it will be Reince Priebus," he said. Put another way, Flynn is only the appetizer. Trump is the entree."

•  Americans Just Broke the Psychologists’ Stress Record | Bloomberg.com: "A national survey of anxiety finds a statistically significant increase for the first time since it was launched in 2007."

•  S&P 500 Hits Record $20 Trillion Market Cap As Warning Signs Mount | SeekingAlpha.com

•  Inflation Alarms Expose Vulnerability in Richly Priced S&P 500 | Bloomberg.com

•  Goldman Warns of China Economy Risks During Year of the Rooster | Bloomberg.com: "... economists warn that a push to rein in cheap loans will weigh on key sectors such as housing. Officials are trying to keep a lid on frothy house prices without harming the wider economy, where growth remains heavily reliant on government spending. The scale of the lending boom was laid bare in data Tuesday ..."

•  Trump and Markets: ".... we are in the business of managing assets, and politics impact that business whether we like it or not. We still have a cash reserve, but it is smaller than before, and we are mostly back in the markets and watching the rally extend itself. Our positions could change at any time."--David R. Kotok, writing on ritholtz.com Feb 8, 2017.  See also It's Worse Than Bush Derangement Syndrome | RealClearPolitics.com: the dreaded mental disorder known as Trump Derangement Syndrome -- a/k/a TDS.

And I haven't even gotten to Europe and its myriad problems--Caveat Emptor!

Also, it's not just Trump and the Republicans and Democrats and media in D.C.:
•  How Democrats broke Illinois, a state beyond hope--read Special Report: The man behind the fiscal fiasco in Illinois | reuters.com, excerpt--"... As [Illinois House of Representatives] speaker for all but two years since 1983, Madigan has directed the fate of key pension, labor and tax laws. As state Democratic Party chairman since 1998, he has shaped the fortunes of his allies and stymied opponents ... Madigan’s Illinois is the state that doesn’t work. The speaker is one of America’s most powerful politicians, presiding over arguably its most dysfunctional state capital. Illinois is beyond broke. It is the first state in eight decades to go without an annual budget, according to the National Conference of State Legislatures. Its bond ratings, the lowest of any state, are near junk status. It is projected to have a budget deficit this fiscal year of $5.3 billion and owes vendors about $10.8 billion in unpaid bills ..." (emphasis added).

This could all get ugly, real fast.

One Last Thing: If nothing else, invest like you would Ride Downhill on a Bicycle | NYTimes.com: The bike follows your vision, so look where you wish to go, scanning the road ahead so you will have time to prepare and glide calmly past obstructions.

-- John Poole, Editor, Domain Mondo 
This may be the last MacroView posting (at least for awhile), I need a respite from all the drama and insanity right now in D.C. Full disclosure: At present I'm out of the stock market and have no intention in the short term of getting back in, but for index funds and Berkshire Hathaway.

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DISCLAIMER

Caveat Emptor Domain Name Registrants re: ICANN Base New gTLD RA

There is now no question that ICANN, post-IANA transition, is a domain name industry-captured organization and does not operate in the global public interest, but completely disregards the interests of domain name registrants. Ted Cruz may have been right, the IANA transition may have been a terrible mistake, premature at best. Maybe Trump can do something.

Caveat Emptor new gTLD domain name registrants: ICANN intends to eliminate price increase transparency for new gTLD domain names in its ICANN base new gTLD Registry Agreement (RA):

"Comments on the proposed amendments. A number of comments relate to the proposed amendments to Sections 2.9 and 2.10. The proposed amendment removes the requirement that a Registry Operator notify ICANN (in addition to its contracted ICANN accredited registrar partners) of increases in the price charged by a Registry Operator to register a domain name in the TLD. ICANN and the Working Group agreed to this modification for several reasons. First, it should be noted that a Registry Operator is not required to provide ICANN with the registration pricing initially charged to ICANN accredited registrars to register names in a TLD. Second, the price charged by Registry Operators is viewed as the “wholesale” price for registering a domain name in a TLD and is not necessarily the price ultimately charged to registrants by ICANN accredited registrars. As such, Registry Operator’s pricing is only one data point that leads to the price charged to registrants, and the disclosure and analysis of this data may be misleading to registrants. Third, it is not necessary for ICANN to be notified of price increases in order to ensure Registry Operator’s compliance with the substantive requirements of Section 2.10 as ICANN’s compliance department is entitled to request this information as part of its normal compliance process. Fourth, ICANN is concerned that collecting, retaining and analyzing this information could be seen as ICANN playing a role in the pricing policies and decision-making of Registry Operators, which historically ICANN has not done."--Updated ICANN Staff Report on Proposed Amendments to Base New gTLD Registry Agreement (pdf) at page 9 (emphasis added).

What's wrong with removing price increase transparency? Healthy competition in a free market is destroyed when price transparency is removed:

A 'free market' in healthcare is doomed | LATimes.com: Unleashing the power of choice and competition is the best way to lower healthcare costs and improve quality,” declares House Speaker Paul Ryan in his conservative manifesto “A Better Way.” The problem with that, however, is that the healthcare industry — hospitals, drug companies, insurers — have worked tirelessly to prevent the medical marketplace from functioning with sufficient transparency and efficiency to allow consumers to benefit from classic supply-and-demand economics. Instead, the opaque and frequently unfathomable healthcare market promotes runaway corporate greed that often can be countered only by shaming businesses into behaving fairly and responsibly.

And that Fourth reason for not even collecting and publishing pricing information:

Fourth, ICANN is concerned that [merely] collecting, retaining and analyzing this information could be seen as ICANN playing a role in the pricing policies and decision-making of Registry Operators, which historically ICANN has not done."

"ICANN is concerned"? Really? How so? Sounds like ICANN can not handle the responsibility of being a responsible steward acting in the global public interest--pricing information should be transparent to everyone in a free competitive market--but ICANN shirks its responsibilities to the global internet community, which includes domain name registrants!

ICANN obviously never really wanted "competition" in the domain name marketplace, instead ICANN prefers crony capitalism and monopolistic franchises exploiting domain name registrants, enabling opaque pricing that encourages the 'runaway greed' of ICANN's "partners," the gTLD domain name registry operators. Likewise the ICANN fee waivers enabled by the amendments will encourage gTLD registry operators' dependency upon ICANN for favoritism, and will ultimately lead to corruption between ICANN management/staff and the gTLD registry operators.

ICANN Publishes Updated Staff Report on Proposed Amendments to Base New gTLD Registry Agreement | ICANN.org: 

Los Angeles – 22 December 2016 – "ICANN today published a revised Staff Report of Public Comment Proceeding regarding Proposed Amendments to Base New gTLD Registry Agreement. Read the Reissued Report [PDF, 544 KB]. The reissued report supplements the staff report published on 17 August 2016 and includes additional explanatory text in Section I and a revised Section IV to reflect an analysis of the public comments by ICANN and the Working Group. More Information: Public Comment: Proposed Amendments to Base New gTLD Registry Agreement." Updated as of 22 December 2016:

"This Staff Report (see Reissued Report below) supplements the Staff Report published on 17 August 2016 to include additional explanatory text in Section I and a revised Section IV to reflect discussions between ICANN and the Working Group in response to the public comments. On 17 August 2016, ICANN published a summary report outlining comments received and committed to later publish an updated Report of Public Comment Proceeding to include analysis of the public comments, once considered with the Working Group as provided for in the Registry Agreement. For convenience, Sections I, II, and III have been reproduced from the 17 August 2016 Staff Report below for reference. As a result of the analysis, a few minor adjustments were made to the originally posted amendment. The updated version is reflected in the clean and redlined documents below:

• Clean version of amended base New gTLD Registry Agreement as of December 2016 [PDF, 423 KB] embed below
• Redlines from previous version of the amended base New gTLD Registry Agreement as of December 2016 [PDF, 403 KB] embed below

Background:

• News Review: ICANN Secretly Colludes With New gTLD Registry Operators | DomainMondo.com 17 July 2016.
• Comments to ICANN Proposed Amendments to Base New gTLD RA | DomainMondo.com 23 July 2016: "After ICANN colluded in secret for 18 months with new gTLD registry operators, ICANN published for public comment Proposed Amendments to Base New gTLD Registry Agreement. Among other things, ICANN's Global Domains Division (GDD), headed by former ICANN CEO Fadi Chehade's crony Akram Atallah, proposed eliminating price increase transparency for new gTLD domain names, and allowing ICANN to grant discretionary fee waivers to new gTLD registry operators. Comments closed 20 Jul 2016 23:59 UTC ..."

Clean version of amended base New gTLD Registry Agreement as of December 2016:

Redlines from previous version of the amended base New gTLD Registry Agreement as of December 2016:

Updated Next Steps according to ICANN: "According to Section 7.7(c) of the Registry Agreement, the Proposed Revisions shall be submitted for Registry Operator Approval (as defined in Section 7.6) and approval by the ICANN Board of Directors. If such approvals are obtained, the Proposed Revisions shall be deemed an Approved Amendment (as defined in Section 7.6) by the Applicable Registry Operators and ICANN, and shall be effected and deemed an amendment to this Agreement upon sixty (60) calendar days notice from ICANN to Registry Operator."

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DISCLAIMER

*******

UPDATE: ICANN enjoined from delegating .AFRICA by California State Superior Court Judge

ICANN CDAR Internet Root Server System Stability Draft Report Comments

New gTLD Registry Service Providers, XYZ, CentralNic $CNIC & ICANN

"... downward pressure on prices due to competition among Registry Service Providers has drained capital from the marketplace that might otherwise be used to fund stable, resilient infrastructures ...  it is equally apparent that the downward spiral of Registry Service Provider pricing will lead to cut corners. The result will be a failure ..."--Kurt Pritz (former ICANN Chief Strategy Officer), Why Registry Service Providers Should be Accredited by ICANN | circleid.com.

.XYZ Domain Helping To Drive Growth at CentralNic Says CEO:

The chief executive of  domain name registry services provider CentralNic Group PLC (LON:CNIC), Ben Crawford, in the above video tells ProactiveInvestors that the .XYZ* new gTLD (new generic top-level domain) has been a revelation and helped the company to drive up revenues and profits in the first half of 2016. “We have six of the top 25 [new gTLDS]. Number one is .xyz which is very well known because Google used it for Alphabet, the new parent company,” says Crawford. “Mark Zuckerberg’s used it, the founders of Skype are using it for one of their new companies and it’s the most popular [new gTLD] all around the world.” Crawford estimates that CentralNic has about a 34% market share, adding that other domain names such as .art, .am and .fm are also boosting the finances. He also touches on the company’s cash position, explaining that there is “never an issue” with that as all of the company’s divisions are cash-generative. *CentralNic is the "backend" registry services provider for new gTLD .XYZ (registry operator XYZ.COM LLC), and for other new gTLDs.

Video above published Oct 12, 2016, by ProActive Investors Stocktube [stocktube.com]. According to its website, "Stocktube is part of the Proactiveinvestors Group, a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London."

Centralnic Group PLC a/k/a CentralNic

Principal domain: centralnic.com

Stock exchange: symbol | LON: CNIC

Recent 5-year stock chart of Centralnic Group PLC (LON: CNIC) showing shares DOWN -41.81% since Sep 11, 2015. 

Note that $CNIC priced in GBX (pence sterling) on the London Stock Exchange. 43.50 pence sterling = US$0.53.

Also note that one of the larger domain name registrars, Namecheap, has experienced connectivity issues with CentralNic registry: 

"We are currently experiencing connectivity issues with CentralNic registry. As a result, recently registered .US.COM / .DE.COM / .PW / .WEBSITE / .HOST / .PRESS / .SPACE / .SITE / .XYZ / .TECH / .DESIGN / .ONLINE / .COLLEGE / .RENT / .BR.COM, .CN.COM / .EU.COM / .GB.COM / .GB.NET / .UK.COM / .UK.NET / .UY.COM / .HU.COM / .NO.COM / .QC.COM / .RU.COM / .SA.COM / .SE.COM / .SE.NET / .ZA.COM / .JPN.COM / .AE.ORG / .KR.COM / .LA / .AR.COM / .US.ORG / .GR.COM / .COM.DE / .JP.NET / .HU.NET / .WIKI / .IN.NET / .REST / .REIT / .FANS / .INK / .FEEDBACK / .MEX.COM / .CO.COM / .BAR / .COM.SE / .TICKETS / .LOVE / .PROTECTION / .SECURITY / .THEATRE domains may not resolve properly and DNS updates may not propagate as well. The case has been escalated to the Registry. They are aware of the issue and doing their best to resolve this. Kindly allow some time for the issue to get resolved and do not place new .US.COM / .DE.COM / .PW / .WEBSITE / .HOST / .PRESS / .SPACE / .SITE / .XYZ / .TECH / .DESIGN / .ONLINE / .COLLEGE / .RENT / .BR.COM, .CN.COM / .EU.COM / .GB.COM / .GB.NET / .UK.COM / .UK.NET / .UY.COM / .HU.COM / .NO.COM / .QC.COM / .RU.COM / .SA.COM / .SE.COM / .SE.NET / .ZA.COM / .JPN.COM / .AE.ORG / .KR.COM / .LA / .AR.COM / .US.ORG / .GR.COM / .COM.DE / .JP.NET / .HU.NET / .WIKI / .IN.NET / .REST / .REIT / .FANS / .INK / .FEEDBACK / .MEX.COM / .CO.COM / .BAR / .COM.SE / .TICKETS / .LOVE / .PROTECTION / .SECURITY / .THEATRE domain related orders for now. This status post will be updated once we have any news ... UPDATE @ 10:20 EDT | 14:20 UTC [Oct 12, 2016] We are glad to let you know that we received a confirmation from the Registry that the matter is resolved now ..."--Namecheap.com (emphasis added)

Caveat Emptor Domain Name Registrants: ICANN, the global monopoly authorizing new gTLDs, neither captures nor publishes information about registry service providers' failures. Instead, incompetent ICANN sees itself as a "marketing agency" for new gTLD domain names. To heck with consumer protection and the global public interest?

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DISCLAIMER

Caveat Emptor: Neustar MarketShare Acquisition, 2016 $NSR Guidance

Third UPDATE Jan 7, 2016: Will Technology and Domain Name Registry Services Company NeuStar (NYSE: NSR) Go Down Like SunRocket Did Under CEO Lisa Hook's Leadership?

"Her tenure at SunRocket betrays a lack of ethical duty to the company's employees and most of all, the 200,000 subscribers who paid the cost for her failure. It is remarkable that just two years after this highly-publicised failure, she would be assigned the top job managing a large public company with a $1.5B market cap. As to why SunRocket failed, there are a couple of great post-mortems written here, here and here. All seem to suggest the same cause: poor management." (Seeking Alpha, infra)

John Zhang, writer at Seeking Alpha, has penned a new post on NeuStar: NeuStar: CEO's Track Record Reinforces The Bear Case (Seeking Alpha), and asks: "... Was it a coincidence that NeuStar lost their most important contract and the long-held Common Short Codes contract under Lisa Hook's leadership? It's possible, but the evidence of management missteps suggest otherwise. These events signal incompetence at the top, and that the bulk of the responsibility lies with Lisa Hook ... NeuStar submitted a bid so ludicrously high for the NPAC contract that it would have lost out to any other bidder ... We think these are not isolated incidents, but indicative of a larger trend. One could cite more examples of dubious actions, such as canceling the share repurchase programme halfway through to acquire a loss-making entity at rich multiples. (Recall that the $200M buyback was announced on the same day of the contract loss, which artificially propped up the share price). Furthermore, we are perturbed by the lack of disclosure with regard to the change in financial covenants and cancellation of the share repurchase program, which was conveniently excluded from the press release..." Read more at Seeking Alpha. [Disclosure: Zhang is short Neustar]

"Loss of the NPAC contracts on or after September 30, 2016 will have a material impact on our future operating results when compared to our current financial profile.  We expect to lose approximately $500 million of annual revenue and this loss will adversely impact our income from operations and operating margin.  Additionally, this loss may have a disproportionate material negative impact on our operating margin because of the largely fixed and shared cost structure that is designed to support all of our services.  We are unable to quantify the impact on our income from operations and operating margin at this time because the end date of the NPAC contract is uncertain and due to our largely fixed and shared cost structure .... When our seven contracts with North American Portability Management LLC are terminated, the timing of which is uncertain, our revenue and profitability may be materially adversely affected. We cannot be certain whether our contracts to provide local number portability services will be extended beyond September 30, 2016. Once the contracts terminate, our annual revenue will decrease by approximately $500 million. As a result of the uncertain contract end date and due to our cost structure, which is organized by function, the impact of the termination of the contracts on our income from operations is not currently quantifiable. At the time of termination, our revenue and profitability will be dependent upon the success of our remaining business. If we are not able to replace this lost revenue and adjust our operating plans to support our remaining business, our total revenue and profitability may be materially adversely affected." Neustar 10-Q, Oct 29, 2015 (emphasis added)

Second UPDATE: NeuStar:2016 Guidance Makes Little Sense - NeuStar, Inc. (NYSE:NSR) | (Paulo Santos) Seeking Alpha: "... NSR has been delaying the recognition of the loss of this [NAPM] contract for quite long now. This has been the case because there's good reason to believe the said contract represents NSR's entire EBITDA profitability ... NSR isn't yet fully ready to recognize just how much profitability it stands to lose (hint: all of it)... In case anyone has doubts regarding what's happening to this contract, you can always visit NAPM's own website, which includes a tab labeled "LNPA Transition" ... NSR was charging nearly $500 million per year for something which is now being awarded ... for 7 years ($142.9 million per year) … a reflection of the massive margins NSR is realizing on this contract ... Assumptions are supposed to be very likely to happen, not this [2016 guidance] ..." (emphasis added, read more at the link above)

First UPDATE Dec 10, 2015: see Neustar: Management Sets Themselves Up To Fail With 2016 Guidance - NeuStar, Inc. (NYSE:NSR) | Seeking Alpha (John Zhang): "... the odds of Neustar meeting the [2016] guidance is close to zero. Like most companies that try to mislead shareholders, Neustar has hidden a number of extremely questionable assumptions in their guidance figures to artificially inflate the numbers. Furthermore, the shocking non-mention of a change in financial covenants in their press release is worth examining closely, as it shows Neustar's risk of default in 2016 has increased dramatically... Neustar's share price is set up for a temporary boost followed by a drastic decline once the true state of their financials are revealed..." (emphasis added, read more at link above)

--[Note: Original Domain Mondo post, 10 Dec 2015, below]--

Pursuant to a Form 8-K filed with the SEC on December 9, 2015, technology company and domain name registry operator Neustar, Inc. (NYSE:NSR) disclosed it has completed its acquisition of MarketShare Partners LLC for approximately $450 million (using cash, shares, and debt--see further below) and issued 2016 guidance:

"The company [Neustar] expects its 2016 revenue to range from $1.16 billion to $1.20 billion, representing growth of 11% to 15%."

But--Caveat Emptor--

"This [2016] guidance assumes that the company will remain the local number portability administrator for 2016." (emphasis added)

That's a BIG assumption, see previous posts on Domain Mondo:

• Investors Flee Neustar, $NSR Stock Down 19% in Five Trading Days
• Neustar $NSR Shares Tanked Friday After Marketshare Announcement
• Neustar $NSR Will Lose $500 Million Annual Revenue, 80% Downside?

And see on Seeking Alpha:

• NeuStar: Costly Acquisition Strengthens Bear Case
• NeuStar: The Loss Of The NAPM Contract Sees New Disclosure
• Neustar: 80%+ Downside Within 13 Months
• $NSR among S&P 1500 Most Heavily Shorted Stocks | Seeking Alpha

Further Caveat: Investors should read closely the Form 8-K and attached exhibits:

Form 8-K, including documents referenced therein, and items:

• Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. and
• Item 3.02. Unregistered Sales of Equity Securities (emphasis added)

AMENDMENT NO. 1 TO THE CREDIT AGREEMENT AND SECURITY AGREEMENT
AMENDMENT NO. 2 TO CREDIT AGREEMENT

Press Release, dated December 9, 2015

Also note in the Form 8-K:
Item 9.01. Financial Statements and Exhibits.

(b) Financial Statements of Business Acquired.
The financial statements required by this item are not being filed herewith. To the extent information is required by this item, it will be filed with the SEC by amendment as soon as practicable, but no later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The pro forma financial information required by this item is not being filed herewith. To the extent such information is required by this item, it will be filed with the SEC by amendment as soon as practicable, but no later than 71 days after the date on which this Current Report on Form 8-K is required to be filed. (emphasis added)

Finally note the one after-hours trade of only 200 shares (see charts below) which jumped the share price of Neustar:

Neustar stock chart, Dec 9, 2015 (source: google.com)

After hours trading in Neustar shares Dec 9, 2015 (source: Nasdaq) 

Caveat Emptor!

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DISCLAIMER

Ex Machina Wall Street, Bots Have Taken Over the Markets

A world prone to "computer stampedes"--

If you're first out the door, that's not called panicking. - Margin Call (2011)

Rise of the bots - Fortune: "In short, algorithms are taking over our lives. An algorithm is simply a piece of software code that operates like a decision tree, considering multiple variables and then spitting out a decision or recommendation. (A bot is typically a collection of algorithms.) Without taking a step back, as Christopher Steiner does in Automate This: How Algorithms Came to Rule Our World, it’s hard to appreciate how fast and far algorithms have come in recent years, and what the consequences are for modern culture. Steiner, a former Forbes writer, set out three years ago to explain how trading algorithms (which, in their simplest form, make buy/sell decisions based on various data inputs) had overtaken Wall Street. By that time, wildly complex trading bots had transformed financial markets..."

High-speed trading, also known as High-frequency trading (HFT) in action:

Citadel Group, a high-frequency trading firm located in Chicago, trades more stocks each day than the New York Stock Exchange. (CNN, July 2013). Domain name: citadel.com

"While it may take weeks before regulators understand why the plunges occurred, one reason for the swing is that automated computer programs have changed how markets function… Orders are being executed at lightning speeds in huge volumes. But there is another, often overlooked implication: these machines are being programmed to link numerous market segments together into trading strategies. So when computer programs cannot buy or sell assets in one segment of the market, they will rush into another, hunting for liquidity. Since their algorithms are often similar (or created by computer scientists with the same training) this pattern tends to create a “herding” effect. If a circuit breaks in one market segment, it can ripple across the system faster than the human mind can process. This is a world prone to computer stampedes." - FT.com, Aug 27, 2015 (emphasis added)

"... if you think it was human beings executing sales of Starbucks (SBUX) down 22% on Monday’s open [24 Aug 2015], you’re dreaming. And if you believe that it was thinking, sentient people blowing out of Vanguard’s Dividend Appreciation ETF (VIG) at a one-day loss of 26% at 9:30 am..." - Josh Brown

Just remember:

"... despite its obvious attributes “Black Box” trading [is] very tricky. The algorithms may work for a while [even a very long while] and then, inexplicably, they’ll just completely “BLOW-UP”... The real challenge ... [is] to “sniff out” the degrading model prior to its inevitable “BLOW-UP” .... “because, you know, eventually they ALL blow-up“… as most did in August 2007..." - Black Box Trading: Why They All “Blow-Up” | GlobalSlant

XKCD

Caveat Emptor!

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DISCLAIMER

New gTLDs, Brands, Domain Name Consultants, The Biggest Con

The idea that a brand needs its own TLD must be the biggest con ever perpetrated by domain consultants.
— Ken Schafer (@kenschafer) September 15, 2014

Not to pick on all domain name consultants (there are a few really good domain name consultants)--but frankly, there are also plenty of charlatans and snake oil salesmen who call themselves "domain name consultants" or "brand consultants" or by some other domain name industry or professional title. Some of them end up on ICANN committees/groups/boards "pushing" new gTLDs for brands and other unwanted, unneeded programs that are not in the global internet community's best interests. ICANN calls all of them "stakeholders"--that's ICANN's generic title for everyone, including the influence-peddling hucksters trying to score their next con, who weasel their way into the ICANN decision-making process, often as part of, or sponsored by, the very entities who stand to profit from ICANN's decisions. I've got some better words for all of these characters.

Notice that the smartest guy in Silicon Valley didn't fall for the new gTLDs for brands con game? Facebook bought how many gTLDs for their brands? That's right: -0-, none, nada. “Facebook did not apply for .facebook or any other new top level domains,” says spokesperson Andrew Noyes (source infra).

Facebook Is Ignoring The 'Greatest Internet Landgrab In History': "... The question is: is this [new gTLDs program] really necessary? From the New York Times:

There is also a lingering question about whether the new suffixes are needed at all. Some top-level domains that ICANN has created in previous, smaller expansion rounds have attracted little interest. Many consumers find Web sites via search engines, rather than typing in an exact Web address. Others are increasingly using mobile applications, rather than the open Internet.

"If the Web is truly on its deathbed, as Wired has claimed, those spending money on this may be [www.just].throwingitaway. Their money would be better spent on better mobile apps."

Protecting Brands on Internet Will Cost | Adweek [April, 2013]: "..."It's not a fair system," said Brad Newberg, a partner with Reed Smith, who represents a number of large brand owners. "The protections that were put into place are extremely costly, put all the burden on the trademark owner and may not be effective at all." With the costs of defensive registrations sure to skyrocket into the tens of millions, many brands are rethinking their Internet identity strategies. "There is no way this fortress mentality can be continued going forward," said Bill Smith, a senior policy advisor for PayPal, said ... "Companies aren't sure they should defensively register," said Amy Mushahwar, an attorney with Ballard Spahr, which represents advertisers. "What they are contemplating is boycotting the defensive registration all together.""

And of course, for those who got suckered, they can still mitigate their losses: see Most brands may never sign the ICANN contract.

Forewarned is forearmed. Caveat Emptor.


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ICANN's new gTLD domain names: Innovation OR Hokum by Hucksters?

Domain Shane: "I’m going to have to admit it. Many of the articles on the domaining feed are down right unreadable. We all pump. We get paid to pump. But due to the sheer number of new gTLDs coming out there is a much bigger need for pumping. The competitiveness had [sic] also turned things ugly as readers and customers are getting tired of the articles and even the registries and their approaches. It’s even worse in the domain conference world...."

WANTED: Fiction writers to come up with riveting copy and narratives for launch of ICANN's new gTLDs (generic top-level domain names).

Frank Schilling explains ICANN's new gTLDs in the video above--beware story-tellers with products for sale--ICANN's new gTLDs: we are only limited by our imaginations! (Plus $185,000 up front to ICANN plus renewal fees.) "Narrative makes for a compelling story. It appeals to us emotionally. It often falls apart when scrutinized" (source infra).

"Late last year, we had a wholesaler from a major exchange-traded-fund firm visit our office. At the time, the chatter was all about the planned Alibaba Group Holding Ltd. initial public offering. It was going to be, in his words, “huge, disruptive, incredibly powerful"... Never mind that IPO returns are on average mediocre or worse ...This guy had a great story to tell, and to the uninitiated, it was enthralling. The story, as it turns out, was and is completely and utterly wrong. The narrative, as is so often the case, failed. But not its appeal to our deep lizard brains...In politics, when your narrative fails, the other guy wins. With investing, following narratives leads to lost capital..." -- Barry Ritholtz, The Alibaba Story-Telling Failure - Bloomberg View

Domain name buyers: Caveat Emptor!



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What’s In a Domain Name? You Better Find Out BEFORE You Buy!

You like two character country code domain names like .TV and .CO ? How about a .SY or .SU ? Read the following article about .eh --

What’s In a Domain Name? A Real-Life Civil War — War is Boring — Medium: " . . . a Massachusetts businessman acquired the rights to the .nu domain—the country-code for the impoverished Pacific island of Niue. Because “nu” is Swedish for “now,” the domain turned into a multimillion-dollar business for the businessman . . . who charged Swedish companies for the marketable domain name’s use. On a darker note, the derelict .su domain name, assigned to the Soviet Union in 1990, has become a haven for online crime. . . ." (read full article at first link above)

If you stray from buying a dot Com name, and opt for a 2 character country code domain name, or any of the new gTLDs, you better know (in addition to all other due diligence, history, trademark clearances, etc.), what nation you are buying into, the registry, the registrar, all of the requirements, the costs, the applicable laws and jurisdiction, and all other risks--for example: They Clicked With Investors—Now What? Who Will Win the Race to Sell Art Online? | Gallerist: " . . .Artsy, which hit 27,627 (its traffic possibly hindered by the fact it had to change its URL in early 2013 to Artsy.net, since its older, trendier URL Art.sy was technically based in Syria . . ."

Caveat Emptor!

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