A week of news while I was away on vacation.

I’m back from an enjoyable family vacation at Disneyland. If you ever make the trip, I highly recommend staying at this house — the kids will love it! Also, a quick shout out to my daughter, who just turned 4 last week yet braved Space Mountain. Gutsy girl.

As much as I’d like to just click the pause button on the industry while I’m out of town, it doesn’t work that way. Here’s some of the week’s news, as reported by my fellow bloggers.

- Here’s the latest on the .xxx contract

-Quotes.com sells for $1.15 million

-Thinking about going to the Epik conference next month? Read this interview with Rob Monster over at Elliot’s Blog.

-Domain attorney Zak Muscovitch is running for the Canadian Internet Registration Authority (CIRA) board of directors.

One man’s story should serve as a warning to domain name registrants.

Blake Smith is a savvy internet user. After all, he runs a web consulting business. In his role he’s ordered dozens of domain names from GoDaddy for both himself and his clients.

One of his clients orders domains at GoDaddy frequently enough that he decided to set up an account specifically for him, and even added the one-click payment option with GoDaddy where your credit card information is saved. It made it a lot easier to order, but also to make a mistake.

And that’s just what happened a couple months ago. Smith’s client, who we’ll call Darin (because that’s his real name), asked him to order a domain.

“I was downloading a big project file when I started getting text messages from Darin telling me he needed me to buy a domain fast!” Smith recounts. “I couldn’t really stop my download but told Darin as soon as I could I would get his order taken care of.”

Really, Blake? Is that what happened?

“OK, technically that ‘download’ thing was a euphemism,” he admits. “I was sitting on the toilet when these urgent texts came through. As soon as I could I ordered the domain betterthanfred.com for Darin. I went to GoDaddy, saw the word “Available,” clicked on purchase, checked the stupid agreement check boxes and bought it. Done!”

Moments later he received a purchase confirmation that read “GoDaddy.com Order Confirmation‎ – … Name Registration $10.87 BETTERTHAN…”

Mission accomplished, all while sitting on the toilet.

It wasn’t an important domain, it was more of a joke.

“It turns out that Darin was at a meeting with a guy named Fred. Fred’s an important web commerce guy and Darin was joking about how he had a site that was better than Fred’s this and better than Fred’s that; A little amusing one-upmanship. While Fred was gone from the table for something, Darin sprang into action to snag this amusing betterthanfred.com site so he could joke that no matter what Darin would have a site that was better than Fred. It was pretty funny and I was happy to have helped.”

He was happy until Darin received his credit card bill the next month. Darin called Smith and asked him if he ordered a $10,000 domain name on his credit card.

“You know how they say in novels, ‘his blood ran cold’ and it sounds cliché?” asks Smith.

“It’s not as cliché as you might think. I told Darin I’d come right over. With just a few minutes of checking I realized I’d somehow purchased one of GoDaddy’s so-called premium domain names. I couldn’t even imagine how that could have happened. I mean yeah, I’d been in a hurry to help Darin with his urgent purchase – but the website had said available and from my perspective $10,000 makes it pretty frigging far from ‘available’. That’s way the hell over in ‘unavailable’ land.”

Fortunately for Smith, Darin is his neighbor and they have a good relationship. Darin tried to work with GoDaddy and American Express to undo the transaction. But keep in mind that GoDaddy had sold the domain on behalf of someone else, who already had his check in hand. And technically, Darin had authorized Blake to make the purchase.

“I’ve been working with Darin on ways to pay off the ridiculous debt,” said Smith. And maybe we’ll even figure out a way to make the domain profitable at some point – Darin’s got a lot of great ideas. For the moment though, it is a giant GoDaddy albatross rotting around my neck. I’m sure if Darin reads this he’ll appreciate the Samuel Taylor Coleridge reference.”

This has been one painful lesson for Smith, especially since he prides himself on being aware of these sorts of things.

“The worst part of it for me – besides the awful, nerve-wracking feeling of having made a $10,000 mistake – is that I’m also way too familiar with the process that made this error so simple. I was in a hurry. I was looking for a specific word “available.” I saw that word and ignored all the other things that should have warned me I was about to make a $10,000 mistake.

“When I’m not doing web work my hobby is skeptical activism and a large part of it has to do with people mistakenly identifying things as ghosts, bigfoot, etc. The psychology behind some of the common mistakes we make is fascinating, unless they’re happening to me. But I fell prey to something called inattentional blindness. And it’s the same kind of error that makes it so dangerous to text while driving. My attention was focused on the wrong thing and I saw the tree and missed the forest completely. GoDaddy had plenty of information to show me what the price was – I just couldn’t see it in my rush to help Darin get “betterthanfred.com” before Fred came back. It reminds me a lot of the classic psychology experiment with counting basketball passes.”

It’s certainly a painful lesson. But I’m also trying to picture the guy who sold the domain through GoDaddy. He had just registered the domain earlier this year, and quickly sold it for $10,000. He probably hit the ceiling, although reading this story might make him feel at least a little sorry for the buyer.

by Ken Hansen, Neustar

[A big hurdle for new top level domains is getting attention as potentially hundreds of competitors are launched concurrently in the near future. In this guest post Ken Hansen, Senior Director of Business Development at Neustar, explains that getting good distribution from domain registrars is key. Neustar Registry Services operates the global registry for .biz and .us and provides back-end registry services for .co, .tel and .travel. -Andrew]

Will new gTLDs will be successful? The answer I’ve always given is, “yes and no” and, “it depends on how you define success”. For some gTLDs, success simply means serving the needs of a specific community or advancing a cause, while generating enough cash to support ongoing operating expenses. Applicants for gTLDs with broad mass market appeal like .web on the other hand, are likely to define success as millions of registrations. Brand owners will measure success based on incremental brand awareness, advertising return-on-investment, or market share. One measure of success, although certainly not the goal at the very beginning, is simply staying in business. Based on that criterion, not a single gTLD introduced in the past has failed.

Regardless of how success is defined, with so many new gTLDs coming to market at the same time, some will be successful and others (perhaps many others) will not. Although there will be many factors that determine which gTLDs will “succeed”, with the exception of brand gTLDs, for most distribution will be critical.

Like most products in the brick-and-mortar world, getting on store shelves is an essential step in building a new gTLD business. With hundreds of gTLDs coming to market, the competition between gTLDs for prime shelf space will be fierce. So how do you ensure your new gTLD will gain the distribution required?

For those seeking broad distribution of a new gTLD, instituting policies and processes that are consistent with other gTLDs is recommended. Anything “non-standard”, unless it adds substantial value to registrants, and therefore drives demand, will require Registrar development and create an obstacle that could result in fewer channel partners. Unless your gTLD is compelling for some other reason, make your gTLD registrar-friendly by sticking to what is familiar to them and their users.

It is also advisable to work with a registry that is already connected to a large number of registrars. With hundreds of new gTLDs coming to market, registrars may be hard pressed to find the time and resources to integrate with a registry they are not currently working with. Turning up a new gTLD with an existing registry partner is a relatively simple task for a Registrar. A registry partner that knows and works with a large number of registrars can also be very helpful in terms of making registrar introductions. Also look for registry partners with significant experience working with the distribution channels to launch new gTLD through the sunrise, land rush and first-come-first-serve phases.

Some gTLDs, particularly those targeted at narrowly defined niche markets, will find it very challenging to get broad distribution. Even if they are successful in attracting registrar partners, they may be relegated to the bottom of drop-down menus or several clicks deep on a registrar site. Some gTLD applicants, for this reason, may even prefer to work with one or a few registrars for which their gTLD is an important revenue stream. Indeed, the needs of niche gTLDs could be addressed by the emergence of new registrar channels that are focused on single gTLDs and their target markets (e.g. focused on the Music or Sports industries). Existing registrars might also deploy gTLD specific sites and marketing initiatives.

Of course, no one distribution strategy is right for all gTLDs. Many factors other than distribution will also influence whether an individual gTLD will be successful. Those factors include: market size; market maturity; growth rate; segment dependence on the Internet; number of alternative gTLDs choices; and, the number of attractive premium names in a gTLD. One thing for sure; given the number of new gTLDs expected to come to market, having a well thought out distribution strategy will be critical in determining whether or not your gTLD will be the next .co!

You can contact Ken Hansen at newgtld@neustar.biz.

French company guilty of reverse domain name hijacking for VirtualExpo.com.

A French company has been found to have attempted reverse domain name hijacking of the domain VirtualExpo.com.

M. Corentin Benoit Thiercelin, who claims to run a company called VirtualExpo, filed the complaint with WIPO to get the domain name. The domain was registered in 1996, well before the complainant filed trademarks on the name. The earliest of the trademarks was registered in 2005.

The panelist pointed out that it was impossible that the domain was registered with the complainant’s future trade name in mind:

The Complainant asserts in the Complaint that “The Domain Name was only registered in order to prevent the owner of the trade mark from reflecting the mark in a corresponding domain name”. On the papers before the Panel this was a wild, unsupported and wholly misconceived claim.

In finding that the case was brought in bad faith, the panelist wrote:

In the view of the Panel this is a Complaint which should never have been launched. The Complainant knew that the Domain Name was registered nearly 10 years before the Complainant acquired his registered rights, no attempt was made to demonstrate the existence of any earlier rights nor was any attempt made to address the issue arising from the disparity in dates. It simply was not mentioned. Instead, a flagrantly insupportable claim was made as to the Respondent’s bad faith intent at time of registration of the Domain Name and the Panel can only assume that it was hoped that the Panel would miss the point.

by Aaron Krawitz, Gary Males & Patrick Carleton

[This article explores the latest with IDN ccTLDs such as .рф and .日本. Aaron Krawitz of IDNBlog and Gary Males of IDNDemystified co-own IDNDroplist, IDNTools and IDNNewsletter. Patrick Carleton is Executive Director of Associated Cities. -Andrew]

Change is afoot in the world of IDN ccTLDs.

Just a few days ago, we learned that the registry, JPRS, was the only one to apply to manage the .日本 IDN ccTLD (meaning “.Japan” in Japanese). JPRS is the current .JP registry and has previously spoke out in favor of aliasing or unlocking .JP in an IDN equivalent. As such, the practical implication of the above application is that we will likely soon see owners of IDN.JP domains owning IDN.日本 names as well.

Hiro Hotta the Director of Corporate Planning at JPRS previously stated: “In my opinion, the registrant of IDN.jp should automatically have the right to register IDN.日本 . . . [i]t is relatively easy for [the] .JP registry (JPRS) to implement this aliasing.”

Meanwhile, the release of .рф IDN ccTLD (meaning “.RF” in Russian) is on track. The sunrise period is currently open to trademark holders, with a number of .рф sites already having gone live, and landrush is to follow this fall.

Awareness

There are several material implications of the IDN ccTLD progress, the first of which is greater awareness of IDNs in general. As IDNs are in the news on a daily basis, investors, developers and end-users are realizing that IDN.com domains exist now, IDN.IDN-ccTLD names will exist soon and these foreign language domains are great platforms to use in order to engage users in their native languages.

Extension Question

Though the publicity of IDN ccTLDs are having a positive effect on the awareness and value of IDN.com names, such new ccTLDs also pose a competitive threat. In the world of IDNs, to many it seems like buying an IDN.com is the intuitive choice as .COM is already a global brand. However, in many markets, new IDN ccTLDs will be available long before an internationalized IDN.com-in-IDN domain will be available, and such IDN ccTLDs will at times have the advantage of being the first IDN.IDN in a certain region.

Consequently, it is anyone’s guess as to whether the new IDN ccTLDs, ASCII .COM, or the future IDN .COM alias becomes the extension of choice for IDNs in a given country and the prudent investor should buy both.

Opportunities Overlooked

Lastly, amidst the blockbuster releases of IDN ccTLDs for Japan and Russia, smaller countries tend to get overlooked even though they too are releasing IDN ccTLDs. IDN opportunities will surely abound in these smaller markets as well.