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Back In February we told you that Warren Buffets’s Berkshire Hathaway purchased 3,685,700 shares  of Verisign (VRSN) which at the time of acquisition represented an investment of around $165 Million dollars.

Today according to Cnbc.com,  Berkshire Hathaway added another 4.49 million shares last quarter and now owns 5.35% of VeriSign.

“”While the introduction of a new category of “top level domains” (such as .aero for aviation businesses or .mobi for mobile websites) does increase the competition faced by VeriSign, the new naming options aren’t likely to steal share from the dot-com domains. ”

“Instead, firms are likely to just register both names.”

“VeriSign’s exclusive contracts with ICANN offer an attractive economic moat for the firm.

“Because increases in registration fees are built into those contracts, VeriSign will be able to generate attractive growth over the course of the next several years without needing to work for it.”

The reporter for CNBC.com doesn’t seem to understand what is going to happen in the new gTLD program and certainly we can and have debated what the effect of the new gTLD program will be on existing domain names for years now.

The reporters statement that attempts to summarize the threat from new gTLD’s to Verisign’s  as “firms are likely to just register both names.” shows a great lack of knowledge on the subject.

Moreover Verisign no longer has that guaranteed rate increase and that part of the story is just wrong.

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VeriSign, Inc. (NASDAQ: VRSN), today reported financial results for the first quarter ended March 31, 2013 reported revenue of $236 million for the first quarter of 2013, up 15% from the same quarter in 2012.

Verisign reported the quarter ended with 123.1 million .com/.net domain name registered a 5.5% increase year over year.

Verisign reported net income of $85 million and diluted earnings per share (EPS) of $0.52 for the first quarter of 2013, compared to net income of $68 million and diluted EPS of $0.42 in the same quarter in 2012.

The operating margin was 56.4 percent for the first quarter of 2013 compared to 48.1 percent for the same quarter in 2012.

And of course that is without the guaranteed rate increases the Verisign enjoyed for the 6 year contract period that ended in 2012.

Share of Verisign which rose 1.5% in its regular session where up as much as 7% in after hours trading are no marginally up at $46.50 after opening the day at $45.49

Verisign ended the first quarter with Cash, Cash Equivalents, Marketable Securities and Restricted Cash of $1.57 billion, an increase of $9 million from year-end 2012.

• Cash flow from operations was $151 million for the first quarter compared with $110 million for the same quarter in 2012.

• Deferred revenues on March 31, 2013, totaled $847 million, an increase of $34 million from year-end 2012.

• Capital expenditures were $17 million in the first quarter of 2013.

• During the first quarter, Verisign repurchased approximately 3.0 million shares of its common stock for a cost of approximately $132 million. At March 31, 2013, approximately $844 million remained available and authorized under the current share repurchase program.

 Business Highlights

• Verisign Registry Services added 1.99 million net new names and ended the first quarter with 123.1 million active domain names in the zone for .com and .net, representing a 5.5 percent increase year over year.

• In the first quarter, Verisign processed 8.8 million new domain name registrations as compared to 8.9 million for the same quarter a year prior.
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Now that we published the objection filed by Verisign to .Cam as being to similar to .Com, along with the supporting documents, I have been asked what my opinion is on the objection, which is likely to be duplicated in large part when we see Verisign’s objections to .Vet, .Company, .Network and  .Bom and maybe many more.

I think Verisign raises some good points regarding confusion between .cam and .com

No doubt on a quick look people could be visually confused between the two.

.Com and .Cam sound close to each other as well but not identical.

Here are some of the problems I have with the objection:

Verisign states through the USPTO former employee that paid to study the issue:

.cam possesses no meaning, obvious or otherwise, which would serve to distinguish the letter strings.”

“Thus, there is no difference in meanings.”

We disagree.

We  all know that “cam” has a meaning separate and apart from what the meaning of .Com.

We all know what we would expect to find on a site with a the word “cam” in it.

The bigger problem I have is that ICANN in its wisdom passed through and did not place into contention other strings which I believe have the same claim to visual and audio confusion, .inc and .ink come to mind.

Although I’m not a linguist and I don’t have a graph prepared, to me the term “inc” and “ink” sound IDENTICAL.

A quick look at a web address of say www.bankingonline.inc and www.bankingonline.ink would probably  confuse a percentage of people .

How can the provider who is going to hear this objection place a different standard in the objection phrase broader than that used by the String  Similarity Panel of ICANN who was suppose to place applications that were confusing similar into the same contention sets for resolution?

.kiwi and .wiki are another two strings that look visually and sound similar but where not placed into a contention set by the panel.

The next problem I have with the survey itself.

It not only tested confusion between .com and .cam but as a test group showed two completely unrelated TLD’s to compare and still found 36 % of those people where confused on these two domains:

www.topvalueshopping.net

www.topvalueshopping.coupon

As you can see these domains don’t look or sound the same, they are not the same length one is extension has six letters the other three, yet over 1/3 of the people thought it was confusing

If you notice all the test domains used by the survey company, they were long.…

A couple of weeks ago we told you we were hearing that Verisign had filed objections to new gTLD strings that they believe are confusing to .com or .net for which Verisign is the registry including .Cam, .Bom, .Vet, .Company, .Network.

Last night we published Verisign’s objection to .Cam as being too close to .Com

In support of their objection, Verisign provided the Centere with two affidavit’s, one by a linguist who chatted about how .Com and .Cam sounds that same, and one filed by the former Administrator for Trademark Policy and Procedure of  the USPTO who says

“.Com is like a famous mark in the trademark field where the law dictates that newcomers stay far afield from the famous mark” and in his opinion .Cam is to confusing to .Com.

Verisign also submitted a study it has commissioned by ORC International, which asked sets of people if they were confused by .Cam and .Com and concludes 39% of internet users are confused by .cam and .com.

Its a interesting read.

Here is the affidavit of the linguist:

I, Gail Stygall, state the following:

1. That I am a linguist employed by the Department of English Language and Literature at the University of Washington, Seattle, WA. I am a Professor of English Language and an adjunct Professor of Linguistics. I have been employed by the University of Washington for more than 22 years. I earned my Ph.D. in English Language at Indiana University Bloomington in 1989 and also have a B.A. from Indiana University. Since I have been at the University of Washington, I have continued my research on how ordinary people understand complex language such as that employed in the legal or the financial community. I teach graduate students in the area, lead seminars, given papers at international conferences, and publish articles.

2. As a linguist, particularly an English language linguist, I am well aware of the sounds of English, both vowels and consonants, the structure of the language and its vocabulary. I have been asked by Verisign, Inc. to determine if, on grounds of visual, aural or semantic similarities, the newly proposed .cam TLD string is likely to prove confusing to consumers, especially with respect to the TLD .com.

3. The two words have visual similarity and a potential sound similarity. Both are three letters with the first and last letters exactly the same. The substitution of an “a” for an “o” is just as likely as a substitution of an “o” for an “a.

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A couple of weeks ago we told you we were hearing that Verisign filed objections to new gTLD strings that they believe are confusing to .com or .net for which Verisign is the registry including .Cam, .Bom, .Vet, .Company, .Network.

As of today the objections are still not showing up on the on the site of the provider where the objection was filed but TheDomains.com got some detailed information on what Verisign is providing to the International Centere For Dispute Resolution, in support to their  objections in this case on the new gTLD .Cam.

Tonight we are publishing Verisign’s Objection which contains the grounds on which they are objection to the .Cam new gTLD.  Tomorrow we will publish the affidavits and study the objection refers to.

Here is the edited objection of Verisign (legal references have not largely been included nor the name of the applicant and identifying information, and some background information on Verisign has been omitted)

The Applicant’s use of “.Cam” as the name of a new TLD would create confusion among Internet users.

II.     Legal Background on the Meaning  of Similarity and Confusion.

A.   Similarity

According to the Dispute Resolution Procedures set forth in ICANN’s gTLD Applicant Guidebook, “[s]tring confusion exists where a string so nearly resembles another that it is likely to deceive or cause confusion.”  gTLD Applicant Guidebook  (v. 2012-06-04), Module 3, Section 3.5.1. ”

In this Applicant Guidebook, ‘similar’ means strings so similar that they create a probability of user confusion if more than one of the strings is delegated into the root zone.”

“For a likelihood of confusion to exist, it must be probable, not merely possible that confusion will arise in the mind of the average, reasonable Internet user.”

The standards articulated in the ICANN Dispute Resolution Procedures reflect and parallel long-established standards governing likelihood of confusion that have developed under U.S. trademark law and trademark law more broadly.

Indeed, the ICANN standards expressly refer to the trademark law concept of “likelihood of confusion.” 

Similarly, the ICANN standards require a probability of confusion, which reflects trademark law standards.

The well-established trademark law tests for determining similarity and likelihood of confusion are persuasive in assessing string confusion.

As under trademark law, the Applicant Guidebook makes it clear that the likelihood of confusing similarity must consider more than mere visual similarity, although visual similarity is an important consideration.  The Applicant Guidebook expressly states that with regard to objections based on string confusion, “[s]uch category of objection is not limited to visual similarity.  Rather, confusion based on any type of similarity (including  visual, aural, or similarity of meaning) may be claimed by an objector.”

This is essentially the same test for similarity applied under U.S.…

Although none of Verisign’s objections have been posted officially,  TheDomains.com has learned that Verisign, the company that runs the .com and .net registry has filed additional objections based on “confusion to” .com and .net”.

According to our sources, Verisign which we reported the other day objected to .Cam & .Bom, now has also objected to .Network, .Company and .Vet.

As we wrote about on a couple of days ago it seems that Verisign may have filed objections to any new gTLD string related to .com and now .net.

In the .Cam and .Bom instances, as we discussed over the weekend, Verisign is citing a survey which showed that  39% of Internet users were confused between .com and .cam as well as .com and .bom, but that would mean 61% of Internet users were not confused and of course the new gTLD’s haven’t even been launched as of yet.

According to our source, Verisign is citing only 12% of Internet users were confused between .Net and .Vet yet an objection was filed.

We expect to receive the objection letters tomorrow to the strings, including the surveys cited by and apparently commissioned by Verisign.

There is still no word on whether Versign objected to .Bet which has several applications, but we would expect to see an objection from Verisign based on what we have seen.

Also at least for us, there is a huge question of why none of these Verisign objections are showing on the sites of the providers that are handling the objections for ICANN when the objection period closed on March 13th and its now March 18th.

As for the new gTLD of .Vet there is only one applicant and according to it, .VET “appeals to a broad and diverse group of registrants,  including veterinary surgeons and physicians, and other medical practitioners devoted to the care of pets and animals. ”

“The term also refers to veterinary clinics, educational institutions, providers of veterinary products and supplies, veterinary science periodicals, and others operating in the veterinary field.:

“The term VET also refers to persons with significant experience in an area or field, including those with military service records. Finally, there are dozens of alternate and established meanings for this term, including acronyms and other means of usage. This TLD would be operated in the best interests of registrants from all jurisdictions, and in a secure, legitimate manner.”

Certainly the meaning and purpose and difference of .Vet to .Net is quite clear, as is the difference between .cam and .com.…

TheDomains.com has learned that Verisign (VRSN)  the company that operates the .Com registry  has filed objections to the new gTLD application of .Cam and .Bom,  claiming that they are confusingly similar to .Com.

None of the objections are posted on the websites of the providers who will be administering the objections but the applicants have been notified of the objections.

In the case of .Cam the term has substantial  meaning on its own and have become one of the most popular type of sites on the Internet.

There are three applications for .Cam one by Demand Media, Inc. (DMD) one by Famous Four and one by a applicant in the Netherlands.

According to our source, Verisign is citing a survey of 400 internet users and argue that 39% were confused between .cam and .com.

Verisign filed another objection on the new gTLD application for .Bom

The only applicant for .Bom is Núcleo de Informação e Coordenação do Ponto BR – NIC.br .

Bom is the Portuguese translation for Good.

According to the information TheDomains.com received Verisign has objected to any three letter new gTLD’s in which two of the letters are “c” “o” and/or “m” when those letters appear in the same position as in .Com.

As there is only one other objection filed for string confusion currently listed on the site of the organization who will be dealing with these objections, Verisign may well wind up being the company filing the most objections.

Of course if the Verisign objections are not reflected yet, although the ICANN objection period ended on March 13th, you have to wonder how many other objections have been filed but not yet reflected on the official sites.

We will keep you updated.

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A few days ago Godaddy.com the world’s largest domain registrar reported that 479 Pope related domain names were registered within the first hour after the announcement.

Today the .com/.net Registry Verisign reported that “between the time Pope Benedict XVI announced his resignation and the choosing of Pope Francis I, there were more than 1,300 new domains registered across the .com and .net top level domains with keywords related to the papacy”.

On a related note the Chicago lawyer Chris Connors, who registered the domain name PopeFrancis.com three years ago is going to give the domain to the Roman Catholic Church.

According to the Chicago Tribune, “Connors contacted officials in the Chicago Archdiocese, and Cardinal George told the Tribune on Friday that he had received the message and was delighted to hear the news.

Of course the Godaddy report included other domain registered with not only the .com and .net extensions and of course only at Godaddy.com

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As reported by a number of sources, Melbourne IT (ASX:MLB) is selling it’s Digital Brand Management (DBS) to Corporation Services Company (CSC) for $152.5 million AUD. Melbourne IT had originally purchased the Digital Brand Management unit from VeriSign (NASDAQ: VRSN) for $50MM USD in 2008 and merged it with their existing corporate clients.

Related posts:

• Melbourne IT aquires Verisign DBMS
• Melbourne IT acquires Verisign DBMS
• VeriSign to increase .NET prices by 10% on July 1st, 2013
• VeriSign publishes new video promoting .TV
• Sedo buys GreatDomains

According to TheStreet.com, the most famous stock investor on earth, Warren Buffet’s company Berkshire Hathaway (BRK.A) has purchased 3,685,700 shares  of Verisign (VRSN).

At the closing price of Verisign yesterday he investment represents around $165 Million dollars or about the size of the investment Marchex made in the purchase of Yung Ye’s domain name portfolio some 8 years ago.

We told you that more money is going to come into the domain industry than ever before, here is another $165 Million dollar example.

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