ICANN is continuing to press RegisterFly to repair its management systems so domain owners can manage their names, but is now dealing directly with company founder Kevin Medina, who has been awarded control of RegisterFly by a New Jersey court. ICANN met Saturday with Medina to demand immediate action on RegisterFly's failure to provide adequate WHOIS information and make critical transfer codes (known as auth-info codes) available to customers.
ICANN's task would appear to be complicated by the fact that there are currently two RegisterFly web sites running on different infrastructures - RegisterFly.com at The Planet, and Registerfly.net at Sago Networks.
The dueling web sites are the result of a nasty split between Medina and business partner John Naruzewicz, who claimed that he owned 50 percent of RegisterFly and said the company's board had fired Medina. At the direction of "new CEO" Naruzewicz, the company filed a lawsuit accusing Medina of mismanagement and misuse of company funds. Medina denied all charges, saying he remained the sole owner of RegisterFly. Last Thursday a Newark, N.J. court agreed, awarding sole control of the company to Medina. Naruzewicz indicated that he would not appeal. "We lost and it's all over," Naruzewicz told Business Week.
Embattled domain registrar RegisterFly will lose its accreditation if it can't fix serious operational problems in the next 15 days. ICANN has informed the New Jersey-based registrar that it is in breach of its operating agreement, threatening enforcement action (PDF) after months of complaints from RegisterFly customers. The registrar's operations have descended into chaos this week, with its web site paralyzed amid allegations that the former president and CEO misused company funds.
As the company's principals battle one another, thousands of domain names have been caught in the crossfire. RegisterFly says that at least 75,000 customer domains expired as a direct result of the company's financial and management problems. RegisterFly is also an SSL certificate authority, making its stability an issue for about 460 site owners who are currently securing sites with FlySSL certificates.
A lawsuit filed by RegisterFly's parent company, Unified Names, blames the meltdown on misuse of company funds by President and CEO Kevin Medina, who was fired by the company's board. The suit alleges that Medina spent company funds on liposuction surgery and escort services. "After his termination, Mr. Medina deleted email accounts, access to support tools, and access for our risk/billing department to issue refunds," RegisterFly's Glenn Stansbury said in a statement posted at RegisterFlies.com, a customer protest site. RegisterFly is also reported to have changed the root password of its web server to prevent sabotage.
Microsoft has become an ICANN-accredited domain registrar, giving it the ability to sell domains directly to its customers. Microsoft has been reselling domain names from Melbourne IT, a registrar based in Australia that also provides wholesale domains to Yahoo and other hosting providers.
Microsoft's could use its new status to sell domain names for its Office Live small business hosting service, which is scheduled to come out of beta on Nov. 15 and provides a free domain name with each account. This would probably save Microsoft money on each domain sold, as wholesalers like Melbourne IT typically charge a small mark-up over the base fees from the central registry.
But not all companies that gain ICANN accreditation use it to sell their own domains. Google became a registrar last year but has yet to sell domain names to the public, preferring to use its status to focus on reducing spammy domains from its search results. Amazon.com also has ICANN accreditation, but has not pursued retail domain sales.
Domain registrar Go Daddy has decided not to attempt an initial public offering, citing difficult market conditions, the company said yesterday. "With a war and escalating hostilities throughout the Middle East, skyrocketing oil prices and technology stocks once again taking a beating on Wall Street - now just isn't the right time for us," said Bob Parsons, CEO and founder of The Go Daddy Group.
Go Daddy's plans to raise $200 million through an IPO had been closely watched in the U.S. hosting industry, which has seen many private mergers and acquisitions but no major new IPOs since dot-com era bankruptcies by Exodus and other hosting companies that borrowed heavily to finance growth. Hostopia, which focuses on the hosting reseller market, filed plans last month for an IPO that could raise up to $40 million.
Go Daddy is the the world’s largest domain registrar, and has built a huge hosting business since entering the market in earnest in 2003. Go Daddy recently became the world’s largest hosting provider, as measured by hostnames. While the Scottsdale, Ariz. company has been cash-flow positive since 2001, it has not yet reached profitability, and lost $13.8 million in 2005 on revenues of $139 million, according to its SEC filing.
Domain registrar eNom has acquired rival registrar BulkRegister, LLC, which manages more than 1.5 million domains for its 35,000 customers. eNom said the acquisition gives it more than 6.8 million domain names under management, allowing it to pass Network Solutions to become the second-largest registrar after Go Daddy.
BulkRegister, which provides domain registration and management tools for the corporate market, is based in Baltimore and was owned by reseller hosting specialist Alabanza. Terms of the deal were not announced.
"We are excited about this significant and synergistic addition to our domain platform," said Paul Stahura, founder and chief executive officer of eNom. "Both eNom and BulkRegister have built up strong, loyal and successful customer bases, by providing great tools, high quality service, and a solid technology platform. The combination of the two companies is a natural fit."
EURid has suspended 74,000 .eu domain names and sued 400 registrars for breach of contract, citing "abusive behavior from a syndicate of registrars who have systematically acquired domain names with the obvious intent of selling them."
“In this case we are convinced that the domain name holders of the 74 000 .eu names (Ovidio Ltd, Fausto Ltd and Gabino Ltd) are acting as a front for a number of registrars," said Herman Sobrie, Legal Manager of EURid. "The domain name holders and the registrars can be regarded as one and the same. Since registrars should only register domain names for existing customers and not 'warehouse' the names in order to resell them at a higher price, this is clearly in breach of the registrar contract."
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