.Travel Collapse Could Mean Headaches for Domain Owners

TheGlobe.com had a net working capital deficit of about $7.8 million March 31, it said. The deficit includes nearly $2.6 million to settle a 2006 lawsuit by MySpace alleging a CAN-SPAM Act breach after parent TheGlobe sent at least 100,000 e-mails to MySpace users. The company’s balance was $480,000 on May 4; it expects to be unprofitable for the foreseeable future, it said. “Based upon the Company’s current financial condition… and without the infusion of additional capital, management does not believe that the Company will be able to fund its operations beyond May 2007,” TheGlobe told the SEC.

TheGlobe has sold off its VoIP and computer games businesses. Its .travel registry launched in Oct. 2005 and an online travel search engine in Aug. 2006. Now the goal is to “quickly and substantially increase TheGlobe.com’s revenue levels,” the company said, by speeding .travel registrations in the U.S. and abroad and by finding sponsors and search advertising revenue. At the end of March, only 25,200 .travel names were registered.

NeuStar, the technical backend registry operator under contract to the company for TheGlobe.com website, wouldn’t comment on its client’s finances. But a spokesman said if “something were to happen,” NeuStar would want to keep supporting .travel registrants, working work closely with ICANN on their behalf and not abandoning them, at least short term.

There isn’t enough interest in .travel to save TheGlobe, said travel writer Edward Hasbrouck, who has battled unsuccessfully for years with ICANN on behalf of an independent review of its decision to approve the domain and delegate it to TheGlobe.com, later bought by TheGlobe. Travelers aren’t drawn to the name for several reasons, he said. They want information independent of travel services suppliers, not a service guaranteed to be restricted to such companies. So they use Google or other search engines to trawl for travel services, he said.

And since very few travelers use .travel, it offers little value to suppliers of travel services, Hasbrouck said. Large travel outfits will register a .travel name even if they don’t use it, but smaller ones “won’t waste the $100.” Moreover, he said, potential registrants are wary of TheGlobe.com and TheGlobe because they're “interested in their own profits, not those of .travel registrants.” Word of a possible bankruptcy could frighten off even more would- be registrants, said Hasbrouck.

ICANN’s new TLD selection process, still in development, is based in large part on “trying to pick TLD operators that will never undergo a business failure,” said former ICANN at- large director Karl Auerbach. It’s “based on a fantasy,” he said: “Here, as with [registrar] RegisterFly, reality sometimes sneaks up and whispers, ‘Hello, welcome to the real world.'”

RegisterFly’s demise (WID Feb 27 p1) remains a source of concern as domain owners seek to transfer their names to new registrars. The company still is ICANN-accredited because it filed an arbitration action to stall termination of its registry agreement, an ICANN FAQ said. Asked if lessons from that business’s collapse could prove useful in dealing with .travel, a longtime ICANN participant and domain-name registrants’ lawyer said: “There is nothing about the various RegisterFly problems that has been solved.”

Thousands of “stranded domain registrants” are unable to use their domains, and all expired RegisterFly names remain in an unusable limbo, said John Berryhill. “While ICANN has trumpeted the [court] order requiring that RegisterFly hand over its database, the facts that (a) the database is largely crap, and (b) ICANN doesn’t know what to do with the data, remain unreported.”

Separately, ICANN said an audit of its 881 accredited registrars found that around 4% breached their contracts’ website requirements by having nonworking sites, sites that failed to provide Whois services or both. The firms have been warned that if they don’t comply, they'll be in breach of their agreements, ICANN said.