Short .net domain name idea off the table.

VeriSign has withdrawn its request to ICANN to allow it to release one and two character .net domain names.

The company asked ICANN back in August to let it auction off any one or two letter .net domain name that wasn’t already registered. Some one and two letter domains were registered prior to a restriction on the practice that was introduced for technical reasons.

A number of other registries have either already distributed these short domain names or have asked ICANN to let them. So why is VeriSign backing out? Here are three possible reasons:

1. VeriSign said it would use the proceeds to promote general awareness of .net. This is a plausible argument for new top level domain names such as .biz, but .net already has mindshare. Not to mention that VeriSign makes so much money off of running the .net registry that it wouldn’t need this extra money to promote it.

2. The company’s proposal had a controversial element that would never let these short domain names go through the deletion cycle; instead VeriSign would take them back and re-auction them.

3. More so than other TLDs, VeriSign is seen as a steward for .net and .com. It’s not the company’s duty to promote them. I also suspect that many view it as outside the company’s role to distribute and profit off these reserved domains. When the idea of releasing one character .com domains was floated five years ago, it was ICANN leading the charge. If nothing else, I’m sure ICANN would want a cut of the action. And if it took a cut, then people would argue that it was only allowing the domains to be auctioned because it would make money off of them.

I suspect the .net proposal was a trial balloon for VeriSign trying to release one and two character .com domains. You can push that idea off further into the future.

Company asks ICANN to let it auction off short domain names.

dotMobi is asking ICANN (pdf) for permission to auction off remaining one and two character .mobi domain names. Back in 2008 dotMobi requested permission to release one and two character domain names through an RFP process. Now the group wants to auction off any remaining ones, and then open up unclaimed short domains to general registration.

Many other registries have released (or are in the process of releasing) one and two character domain names, which was originally forbidden for gTLDs. .Biz had successful auctions for its short domain names. Even .net might be getting in on the action soon (VeriSign has withdrawn its request to release one and two character .net domains.)

.mobi is one top level domain name where a very short domain could pay big dividends given that people access .mobi sites through small keyboards on mobile phones. Still, these short .mobi domains would have sold for a lot more a couple years ago before the TLD fell out of favor amongst domain investors. How far has .mobi fallen? We might find out next month at TRAFFIC, when flowers.mobi will be auctioned with no reserve. It originally sold for $200,000.

Another domain name price increase announced.

.Biz domain name registry NeuStar has informed ICANN (pdf) that it intends to raise wholesale prices for .biz domain names effective April 1, 2011. That’s the same time that Public Interest Registry will raise its rates on .org domain names to $7.21.

The wholesale cost of a .biz domain name will increase from $6.85 to $7.30. That does not include an ICANN fee of $.18 cents that registrars must pay, so the wholesale cost will really be $7.48. With about 2 million domain names registered, .biz will bring in about $15 million to NeuStar per year under the new pricing.

Most domain name registrars I use bake in a fairly healthy margin to .biz domain registrations, so I’m unsure how much of this cost will be passed on to registrars. For example, Go Daddy typically charges $14.99 per year for a .biz domain.

FB.com domain name sells. Likely buyer: Facebook.

American Farm Bureau has sold the domain name FB.com, as George Kirikos noted this morning on Twitter. The domain names whois record now points to a division of Mark Monitor, which manages domain names for Facebook.

So did Facebook buy the domain name? I’ve contacted both American Farm Bureau and Facebook for details.

A PR representative for American Farm Bureau told me he’s not sure how much the organization can say about the sale, and he’s looking into it. The organization’s primary URL is FB.org. Facebook has not yet responded to my request.

But of all of Mark Monitor’s clients, I can’t think of any that would be good candidates to purchase this domain name. It makes perfect since for Facebook, which could use the domain name as a URL shortener. Facebook already owns FB.me for URL shortening and it has been aggressively pursuing intellectual property related to its brand.

[UPDATE: Kirikos noticed that Facebook has applied for a FB trademark. American Farm Bureau filed an opposition to the trademark application. It's likely that this prompted some sort of settlement which involved Facebook buying FB.com.]

[UPDATE 2: I heard from American Farm Bureau today. They said the trademark dispute with Facebook is still an ongoing issue, as the trademark dispute at USPTO still shows as open. They did confirm they sold the domain name but would not confirm that it was to Facebook.]

I’ll let you know if I get any updates.

Court rules that world’s largest domain name registrar can face a lawsuit in Illinois.

The United States Court of Appeals for the Seventh Circuit has dealt a blow to domain name registrar Go Daddy, deciding that Go Daddy should face a cybersquatting lawsuit filed by uBid in Illionis.

uBid, which is based in Illinois, sued Go Daddy because some of the registrar’s customers registered typos of uBid.com and these domains were parked with advertisements by Go Daddy.

Go Daddy asked for the case to be dismissed for lack of lack of personal jurisdiction. A district court agreed with the company, but the Court of Appeals reversed that decision yesterday (pdf).

The court ruled that Go Daddy targets Illinois residents in advertising, and its national advertising campaigns are meant to target consumers in all states:

While GoDaddy has taken pains to limit its physical presence to Arizona, its virtual presence in the rest of the country cannot be ignored. GoDaddy has imprinted itself on the national consumer consciousness with a series of television advertisements featuring the “GoDaddy Girls”—celebrities who invite viewers to register a domain name at a low price…In Illinois, GoDaddy has put up billboards in the home ballparks of the Chicago Cubs and White Sox, and fans who attend Chicago Bulls or Blackhawks games or races at the Chicagoland Speedway have been treated to GoDaddy ads as well.

The court compared it to a case in which Hustler was sued for libel. Because the adult magazine was sent to 10,000-15,000 subscribers in the state where it was sued, the Supreme Court ruled that the publisher could face a lawsuit there:

The same reasoning applies here. GoDaddy has thoroughly, deliberately, and successfully exploited the Illinois market. Its attempt to portray itself either as a local Arizona outfit or as a mindless collection of servers is unconvincing.

This may be a scary notion for internet companies, and the court acknowledged this…

The concept of a geographical nexus is harder to apply to cases like this one, where the alleged wrong can fairly be characterized as occurring anywhere the Internet is accessible. In other words, uBID has the same claim against GoDaddy whether the customer who registered ubidd.com or another similar domain name did so from Illinois, from Wyoming, or from China. One conclusion we might draw from this fact is that a physical geographical nexus is simply less important in cases where the alleged harm occurred over the Internet.

…but in this case Go Daddy’s size may have come back to haunt it:

The burden of defending a lawsuit in Illinois is minimal for GoDaddy, a corporation with a broad enough reach to operate and market its services on a national scale.

The registrar has successfully moved another lawsuit to Arizona, but in that case it was filed by customers who agreed to that jurisdiction when registering their domains, not by a third party.