Go Daddy cracks the five figure mark with three digit domain.

Go Daddy Auctions, still often referred to as TDNAM in domainer circles, is known for selling a high volume of domains but rarely very valuable ones. This past week was an exception as 778.com traded hands on the platform for $23,000.

Unlike many domains that sell at GoDaddy, this wasn’t an expired domain auction. It was an offer/counter-offer transaction.

Many of the domains at Go Daddy sell for good prices thanks to existing traffic, but 778.com likely sold because of the popularity of number domain names in Asia. 778 is also an area code in Vancouver.

This is the highest price sale I’ve seen come across from Go Daddy in at least a couple months. Other sales this past week include:

NationalGunForum.com $5,500
HomeSaving.com $4,000
LeadersIn.com $2,300
iBatteries.com $1,900
MetalGearSolid.org $1,700
Lounging.com $1,600
AlgenWeb.us $1,083
Dizajn.biz $1,005
Gardenal.org $1,005
BethMessiah.org $1,000

[Update: To clarify, these are sales from Go Daddy Auctions. The company sells a lot of domains for good prices through other channels, including Premium Listings, that are not disclosed.]

Customers voice frustration over paying for whois privacy.

When you give something away for free, it’s really hard to then start charging for it. Just ask Name.com.

On April 21 the company announced via its blog that new domain name registrations would no longer come with free whois privacy. Domains that already have privacy turned on will continue to receive the service for free; new registrations must pay $1.99 per year for the service as “promotional price”. But the company also disclosed a coupon code to get the service for free for the first year of each domain registration.

Five days later, the blog post has 92 comments, and many of them are rather angry.

A typical comment: “This really blows. In the past 30 days I moved over 60 domains over to you because of the privacy being free AND was about to move another 160 domains.”

Increasing prices is difficult — but increasing them from $0 is even harder. Name.com offered freebies to existing customers but a vocal crowd is still upset. When making a move like this, sometimes it’s easiest to take a grandfathered approach. For example, when unions agree to health care concessions, they try to apply the changes only to new members. That way their existing members aren’t affected and don’t raise a fuss.

Sex.com disagreement isn’t sexy, but it is an important warning.

If you’ve ever formed a partnership or had a business partner in a venture, you know how contentious it can get. When you draft the legal documents, the lawyer wants a provision for every possible outcome under the sun. Everyone is on good terms at the time, so you don’t suspect there’s any reason for half of the provisions.

But when things do go wrong, it can really be a mess. In the case of Sex.com owner Escom LLC, it appears that one major roadblock is that all Managers of the company have to agree to sell the domain name. That provision was certainly inserted into the agreement to protect all parties, but it is now a roadblock.

The following two paragraphs from a DOM Partners submission urging the bankruptcy court to appoint a trustee are typical of the challenges companies face.

5. All parties recognize that ESCOM must sell the Domain Name to satisfy the secure claims against it. The Managers, DOM and WTA, however, disagree on the manner and method of selling the Domain Name. Upon information and belief, this disagreement stems from WTA’s refusal to value the Domain Name at or near its true market value, instead claiming unrealistically high amounts be set as a reserve price in a private sale in an attempt either to protect the claim by iEntertainment, an entity that is controlled by WTA’s Chairman, Michael Mann, even though iEntertainment’s claim is junior to the claims held by WTA and DOM, or dissuade bidders from purchasing the Domain Name, and thereby retaining Mr. Mann’s control over it. WTA’s refusal to appropriately value the Domain Name has prevented WTA and DOM from agreeing on the parameters by which the Domain Name should be sold. In addition, DOM and WTA disagree as to whom shall act as auctioneer or broker for the sale of the Domain Name, how much of a commission to pay to the selling person or entity, the time frame needed to market and sell the Domain Name, and the order and amount of the distribution of sale proceeds. DOM has negotiated in good faith with WTA since at least January 2009 in an effort to come to an agreement on how to best sell the Domain Name. WTA has consistently impeded the sale of the Domain Name and continues to do so. DOM and WTA are hopelessly deadlocked on this issue.

6. Moreover, upon information and belief, WTA’s Chairnan, Mr. Mann, is affiliated with or has some interest in most if not all of the companies with which ESCOM does business, thereby providing Mr. Mann with an incentive to refuse to agree to sell, or otherwise delay the sale of, the Domain Name. For this reason, a trustee is needed to replace ESCOM’s management and vendors until the Domain Name can be sold.

WIPO panelist selection numbers are very different from National Arbitration Forum. Why?

Attorney Zak Muscovitch released a study last month about distribution of cases to panelists at National Arbitration Forum. His findings were shocking. Not only were there “runaway panelists” who have heard a disproportionate number of cases, but those runaway panelists happen to find in favor of complainants much more than the typical panelist.

With the help of UDRPsearch.com, Domain Name Wire analyzed similar data from the other leading UDRP provider, World Intellectual Property Organization. The results are shocking, but not because WIPO shows a similar sort of systematic bias. Instead, the data show completely opposite results.

Analyzing WIPO UDRP data from 1999 until early 2010, it turns out that the five WIPO panelists who have heard the most cases are in the bottom quartile when it comes to finding in favor of the complainant and transferring or canceling a domain. 8 of the top 10 busiest panelists are in the bottom quartile. In other words, there’s little possibility that cases are being handed to arbitrators because they’re more likely to rubber stamp them for the complainant.

Top 10 Panelists by Number of Cases

Willoughby, Tony 293
Abbott, Frederick M. 238
Donahey, M. Scott 236
Foster, Dennis A. 204
Barker, Sir Ian 196
Page, Richard W. 196
Limbury, Alan L. 193
Bernstein, David H. 160
Partridge, Mark 158
Perkins, David 157

Top 5 Lowest Complainant Win % *
33% Sorkin, David E.
56% Lyon, Richard G.
57% Partridge, Mark
59% Blackmer, W. Scott
60% Bernstein, David H.

*Minimum 50 cases required to be considered

When you consider WIPO’s panel selection criteria, these numbers shouldn’t be too surprising. David Roache-Turner, Head – Domain Name Dispute Resolution Section at WIPO, explained to Domain Name Wire in a written statement (you can read the full statement here – pdf):

As to WIPO’s own panel appointment considerations, these are informed by a range of highly conservative, legally and ethically responsible factors, including: panel language capability; party and panel nationality; geographic diversity; panel availability; panel experience; jurisdictionally relevant expertise; where possible, prior cases involving parties at issue, and citation in pleadings to previous decisions; and lack of panel conflict as confirmed by declarations of independence and impartiality (WIPO’s declaration document is publicly posted on the WIPO website).

Indeed, some of the most prolific WIPO panelists probably find for complainants less often because they are assigned to more contentious cases. Assignment to three member panels might also play a role, since three member cases necessarily have an active respondent.

To call a WIPO panelist “prolific” might be a little misleading as well. Even the most active WIPO panelist wouldn’t fall into the top 10 at National Arbitration Forum. NAF’s top panelist has heard over three times as many cases as WIPO’s most active panelist, a fact not lost on Roache-Turner:

“As you would be aware, none of the most frequently appointed WIPO panelists even remotely approach the remarkable NAF appointment shares now receiving attention. In apparently sharp contrast to the situation elsewhere, of the most frequently appointed WIPO panelists, the transfer rate is, as you would also know, well within the overall average for all UDRP panelists.”

In a recent letter to ICANN relating to the proposed Uniform Rapid Suspension scheme, National Arbitration Forum explained some factors used in selecting panelists:

Some practical considerations the Forum asks ICANN to contemplate before promulgating specific rotational rules are that some panelists are simply far more available than others. There are some panelists who refuse most cases, some who have conflicts, and others who take more time than the Policy and Rules have allotted to accept the case. So, while the Forum endeavors to appoint panelists in as fair a rotation as possible, there are varying considerations that should be taken into account.

How can two UDRP managers, both claiming to assign panelists equitably, have such different numbers? Surely Carolyn Marks Johnson, who is closing in on 1,000 cases decided at National Arbitration Forum, isn’t assigned to that many cases merely because she’s more available than other panelists.

At ICANN’s board meeting last week, it discussed “UDRP Policy – relationships with service providers; changes in procedures”. The minutes from that meeting are not yet available, so it’s unclear exactly what the discussion was about.

But to maintain confidence in UDRP, it makes sense that there would not be any significant difference in how various providers assign panelists or interpret the rules of UDRP. Clearly, that’s not the case.

Three letter domains continue to be hot commodity.

With Comwired’s relaunch as DNS.com, I found a recent study by domain investor Nat Cohen on three character domains rather timely.

Cohen randomly generated 100 three letter domain names that contained only premium letters (no j, k, q, x, y, z) to see who owned them. Here’s what he found:

Small and Medium Business: 51%
Large Business: 20%
Domainers: 20%
Non-profits/Educational/Government/Religious: 2%
Personal: 1%
Inactive: 6%

73% were owned by businesses or institutions. In 2008 Cohen ran a similar analysis with a smaller pool (50 domains) and found that 58% were actively used by businesses. Cohen notes that “businesses are slowly absorbing the pool of LLL.com domains that are “in play”. 42% of premium LLL.com domains were not actively used by business in 2008. In a little over two years that percentage is down to 27%”.

Not surprisingly, a number of large companies use their three letter domains to redirect to other corporate web sites.

Cohen believes domainers have been facilitating this absorption by businesses by reaching out to private domain owners to acquire their three letter domains and then reselling them to businesses. Cohen himself has been a big investor in three letter domains.

Here are some recent three letter domain acquisitions:

DNS.com – Comwired, Inc
IPA.com – Austin Web Development
RMC.com – Restoration Management Company
Glo.com – Microsoft (currently registered to BermanBraun)

As far as I know, here are three “domain sites” using three character domains: Domain Name Wire (DNW.com), Domain Name News (DNN.com), and Domain Name Forum (DNF.com). All three use the domains to redirect.