Mint.com domain name sale worth about $2 million.

Mint.com Domain Name sale about $2.M

Hite Capital sold the Mint.com domain name to the recently sold finance web site for equity a few years ago. It has paid off, according to an article by Michael Arrington on Tech Crunch.

…Mint gave a “substantial” amount of Series A stock to Hite Capital in exchange for the Mint.com domain name. That stock was worth a “couple of million dollars,” says one source, after the acquisition.

Not bad. For Hite Capital, selling a domain name for equity paid off. (It’s not clear if there was cash involved in the transaction as well.) But selling a domain for equity doesn’t always work out as planned. One high profile case is Business.com, which Marc Ostrofsky sold for $7.5M in 1999. But that wasn’t cash; it was equity. And according to the buyer, it ended up redeeming that equity for only $2.0M in 2004.

A look at how big companies have joined forces to cybersquat and how they justify it.

In May 2007, I noticed something curious on a new Gateway desktop computer I purchased. When I mistyped a web address, my browser showed a page full of ads.

That’s nothing new. But who profited from the page was. It wasn’t some small fry cybersquatter. It was Gateway.

I later found out that Dell did the same thing. Both computer manufacturers had teamed up with search companies to show a page of links when someone typed in a non-existent domain name.

Shortly thereafter, internet service providers such as Verizon, Time Warner, and later Comcast jumped on the bandwagon and started similar schemes.

There’s only one reason these companies do this: money. They earn money every time someone clicks on a paid link on one of these error pages. But almost all of the companies masquerade error redirect pages as a “service” for their customers.

What’s perplexing is that many of the companies that use error services, including Verizon and Dell, are members of Coalition Against Domain Name Abuse (CADNA). CADNA seeks to stamp out cybersquatting. Yet Verizon and Dell essentially typosquat on fellow members.

To understand how particularly egregious these company’s activities are, consider that almost all of the typos they serve ads on are of existing sites — essentially, trademarks. They aren’t of generic domains, which is a large part of traditional domain name parking. After all, when was the last time you typed in a generic domain name and it wasn’t already registered? Because all of the generic web addresses are registered, it’s clear that the typos these companies are serving up are mostly trademarks.

Earlier this year I interviewed Verizon Vice President and Associate General Counsel Sarah Deutsch about new top level domain names. Although I didn’t include it in my original story, I asked Deutsch about these error pages. She explained that they were very different from domain parking. Among her reasons:

1. If you typo a domain, the first thing you see on the page is a link “did you mean to go to realdomain.com…”

2. You can opt-out, which you can’t do of domain parking

3. The pages show organic listings in addition to ads

Although not won over by her arguments, I let it rest. But recently I received some screenshots of just how Verizon’s error pages look. Here’s one for DomainNameWir.com (notice the missing ‘e’):

Notice that most of the page is just ads. Where are the organic listings? They’re there, but they’re below the fold. It’s clear that the intent of this page is to get you to click on an ad. If it were to help you find the site you mistyped, the organic listings would be at the top of the page.

As for a suggestion of which web site you really meant to visit, apparently your web site needs to be bigger than just the 29,989th most trafficked site on the web to qualify.

To be fair, I’m sure Deutsch would rather her company not offer this service. Someone within these companies sees a money making opportunity, agrees to terms, and then forces it on the IT department to implement and deal with customers’ furor. I doubt the intellectual property attorney is consulted in the process; they just have to defend it when their company’s hypocrisy is called out.

Just how much revenue do companies earn from error redirects? It’s hard to tell. Google advertisers get a break out of how much traffic they get from error pages. In my experience, it’s dwarfed by the amount of parking traffic my campaigns get. And although Google reports the specific parked pages that served ads, it doesn’t show which error pages served up ads.

But the revenue is meaningful. Otherwise Google, Yahoo, and these companies wouldn’t put up with the kicking and screaming from their customers.

Note: hypocrisy.com is a real web site, unrelated to this article.

Details of letter sent to ICANN CEO Rod Beckstrom.

Yesterday DNW wrote about a letter that House Judiciary Committee members Lamar Smith and Howard Coble sent to ICANN CEO Rod Beckstrom. This letter covers the roll out of new gTLDs and the expiration of ICANN’s joint project agreement with the U.S. Government.

Domain Name Wire has obtained a copy of the letter (pdf) and its detailed questions of ICANN. The letter is dated September 15, and requests a response by September 22. This tight deadline is probably due to the impending expiration of the JPA with ICANN at the end of this month.

In the letter, Smith and Coble discuss numerous issues:

Price Caps: “We note that the absence of price caps in the new registry agreements could mean that legitimate businesses with an established consumer base and Internet presence may be discriminated against and compelled to pay a premium for each new domain name they register or renew.”

Economic justification for new TLDs: “We also note that the record concerning the impact this proposed expansion will have on competition is woefully inadequate. To our knowledge, the only economic justification put forth thus far has been an ICANN-commissioned report that has been widely criticized for failing to include empirical data or analysis in support of its conclusion that the unrestricted expansion of gTLDS will result in net consumer benefits”

Policy development process, transparency, and accountability: “…we note with disappointment that serious consideration of these [intellectual property] interests did not occur in the normal course of ICANN’s policy development process, and the IRT was formed only after considerable public outcry arose from the business and intellectual property communities.” The letter further notes that decisions on IRT’s proposals haven’t been announced and aren’t planned to be announced prior to the expiration of the JPA. The congressmen note, “This apparent time-line reinforces the perception that ICANN decision-marking processes lack critical transparency and accountability.”

ICANN’s track record: “Given the late consideration of intellectual property concerns, the lack of a credible independent analysis on competition issues in the context of proposals to expand gTLDs, as well as ICANN’s less-than-stellar track record on a variety of other issues (enforcement of registrar obligations, accuracy of publicly available Whois data), we have serious misgivings about the prospect of terminating the formal relationship between the U.S. Government and ICANN that is currently represented by the JPA.”

The letter then asks pointed questions about IRT’s recommendations, the launch of new gTLDs, and the JPA.

ICANN terminates Red Register, Inc.’s accreditation.

Internet Corporation for Assigned Names and Numbers has terminated Red Register, Inc.’s accreditation.

According to a letter (pdf) sent by ICANN Director of Contractual Compliance Stacy Burnette, the registrar was violating many terms of its accreditation agreement.

Among those: not paying its accreditation fees to ICANN, failure to maintain accurate contact information for the registrar, and failure to provide access to its whois database.

I’m glad ICANN is stepping up enforcement, dropping a number of domain registrars in recent months. It seems that ICANN has been gun shy in the past, and also handcuffed by the strict measure it has to take to terminate an accreditation.

Perhaps it should have acted a bit faster on Red Register. It sent breach notices to the registrar in December and April over unpaid accreditation fees. Neither of those breaches were cured.

Bido releases system to manage domain purchases and sales.

Bido’s new transaction manager

When you sell one domain name a day, managing the payment and transfer process can be done manually. When you start selling dozens of domains a day, it gets more complicated.

Bido has released a new buyer and seller transaction system to make its dozens of daily transactions easier. It includes both buyer and seller overviews and the ability to drill down to manage individual transactions. This self-serve tool is essential when you’re dealing with many sub-$100 sales each day.

I haven’t come across many domains that interested me on Bido lately, until yesterday. Two auctions — DFW.info and LotteryNumbers.us — caught my attention. I ended up bidding on LotteryNumbers.us, although I let someone else have it at $48. DFW.info attracted lots of attention, and sold for $324 with 19 bids. I’m not going to opine on the value of Bido in terms of creating liquidity. But I will say, if you have domains you’re looking to sell for as little as $28, it’s worth taking a look at Bido.