Tucows Response to our Post: Not Good Enough and Here’s Why
Today Bill Sweetman, the General Manager, Domain Portfolio of Tucows responded to our post of the other day regarding ethics in drop auctions.
Basically Mr. Sweetman repeated much of what he posted the other day on our blog, in response to our initial post.
The domains Tucows took back, were owned by Tucows.
Tucows released the domains into their own auction by mistake and when they realized the mistake they exercised their rights as a registrant and redeemed the domains.
Here’s the new information we got from today’s post:
There were actually 25 winning bidders who got one or more of the 260 domains that were released.
I said in my initial post, I highly doubted that we were the only ones effected by the action of Tucows and now this has been confirmed.
There were 24 more domainers and 237 additional domains which were taken back by Tuccows (we had 23).
Now here is why the Tucows response is not good enough.
I am probably just like you.
I am a very reasonable guy.
I’m not a prick.
Had Mr. Sweetman done the right thing and called me or sent me a personal e-mail saying something like:
Hey Mike we really screwed up and let some domains go into the auction that we owned and I can’t let them go, what can we do to resolve this; I would have, just like you, worked something out with the guy.
I have no desire to kick someone when there down.
If someone makes a honest mistake, comes correct, mans up, admits to it, and tries to find a solution, I am going to work with him.
Just like you.
But this is not what happened.
I got no phone call.
I got no e-mail.
The only way I knew it was Tucows own domains that they redeemed, is by researching there history on DomainTools.com
If I did not take the initiative and do the research I would never have know they were Tucows own domains.
According to Mr. Sweetman’s own post, only 3 of the 25 winning bidders even contacted him about the issue, meaning the other 22 were clueless as to what happened to the domains they had won at auction.
Is this a way for a public company to act?
Is this the way you want to do business?
I say no.
I say Tucows response to, not just post but to the domain community, is not good enough.
Mr Sweetman needed to contact each of the 25 domainers effected by Tucows mistake, admit the mistake and come to a satisfactory resolution with each, before Tucows unilaterally redeemed the domains.
That’s what you do if you want to built and keep customers.
That’s how you conduct business.
Mr. Sweetman concludes his post by saying”
“”"”I’m sure you’d understand that we have a duty to our shareholders, as a publicly traded company, to protect the value of the assets contained in the Tucows Domain Portfolio.”"”"
Well Mr. Sweetman you do have a duty as a public company to protect the assets of the company.
However you failed to see that the most valuable asset of any company is its reputation; its credibility in the industry; and it’s customers.
Instead Tucows chose to protect 260 domains out of hundreds of thousands they own.
Bad choice.
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I am going to recommend that the board of directors of WADND review the Seal of Approval awarded to Tucows last year and see if they still meet the criteria. If not, the seal could and should be revoked. I am sure no skin off their noses but it would demonstrate to the domain industry that they are no longer a trusted registrar and that we are serious about making sure that companies live up to the standards that were set.
My analyst friend says that the bulk of the stock of Tucows is owned by insiders. Those that work at Tucows etc. So if this is the case, the shareholders they are protecting the most are THEMSELVES!
I think the thing to do is just to keep the pressure up each and every day until this is resolved. Keep exposing their business practices to a bigger and broader audience.
They are not backing down and that means the domain industry should not back down. Tucows vs the Domain Industry. Stay tuned. There is more to come.
Rick
Here is what I found
Tucows annouced a stock buy back program of its own shares on May 7, 2008.
Under the program they agreed to buy back up to 10 million dollars in shares over the next 12 months which would represent 10% of the shares once completed
http://www.mediacastermagazine.com/PressReleases/FullStory.asp?ArticleID2=3022732
Tucows had repurchased 2.6 million shares representing 3 1/2 of the outstanding shares, under another program that ended on 2/14/08
According to Yahoo finance:
http://finance.yahoo.com/q/mh?s=TCX
BREAKDOWN
% of Shares Held by All Insider and 5% Owners: 11%
% of Shares Held by Institutional & Mutual Fund Owners: 17%
% of Float Held by Institutional & Mutual Fund Owners: 19%
Number of Institutions Holding Shares: 13
MAJOR DIRECT HOLDERS
Holder Shares Reported
NOSS ELLIOT 334,328 12-Sep-07
STERN STANLEY 203,850 2-Jun-08
MORRISETT LLOYD N 105,000 2-Jun-08
GISSIN FREZ 10,000 2-Jun-08
TOP INSTITUTIONAL HOLDERS
Holder Shares % Out
Platinum Management 2,831,009 3.83
Value $1,698,605 31-Mar-08
PAR CAPITAL MANAGEMENT 1,755,480 2.38
Value $1,053,288 31-Mar-08
DIKER MANAGEMENT, LLC 9,407,035 12.73
Value $5,644,221 31-Mar-08
RENAISSANCE TECHNOLOGIES 687,000 .93
Value $412,200 31-Mar-08
SPARK LP/DE 327,500 .44
Value $196,500 31-Mar-08
Credit Suisse 94,000 .13
Value $56,400 31-Mar-08
GOLDMAN SACHS GROUP INC 58,224 .08 Value $34,934 31-Mar-08
NORTHERN TRUST CORPORATION 23,344 .03 Value $14,006 31-Mar-08
BEAR STEARNS & COMPANY 11,900 .02 $7,140 31-Mar-08
SENA WELLER ROHS WILLIAMS INC. 10,000 .01 $6,000 31-Mar-08
Mike,
I have been talking with a lot of people over the last few days. Many are not in our industry and are just looking at it from a different perspective.
With as many people as this MESS has affected and since they only care about their shareholders and their stock plunging over the past year ,which I am sure is very upsetting, the concept of a lawsuit has come up in several conversations. But that is an action that is a pain to do on your own. However in this particular instance with 2 dozen people involved is a class action suit a possibility?
My source says this would be the best way to bring this entire practice into the light of day and get an equal playing field.
Rick
Here’s my thoughts on a class action.
We know there are 25 domainers in the situation which would certainly qualify.
The problem is that the suit would have to be on the issue of them taking back domains they owned, which they had a legal right to do.
They wrote the rules and ran the game so for them to have themselves legally covered is not surprising.
The question is more of an ethical one.
The value of their customers vs. the value of the domains.
The other, maybe more important issue is; do they have a right to take their own customers expired domains for themselves without making them available to the general public?
In this case the law is unclear and the class would be all domainers who were deprived of getting any of those domains which can number into the thousands
What you think??
Why not send links to these threads to their major shareholders? Let’s MAKE SURE they know what is really going on here since they seem to be the essence of all this. Maybe they are sandbagging them the same way they are sandbagging domainers?
Tucows left on Friday really believing they had this behind them. We promised that we would just start this weekend and that is what we are doing.
Mike,
I think it is worth $20 grand to get a REAL opinion and a way forward on a class action including costs and the funding options we may have. There is so much conflict of interest here that at some point the courts need to get involved.
I think there is some other $$$ on the sidelines that would join the fight that may have not joined any associations and waiting for something more specific to fight.
Rick
If we can get a few other domainers in, you know I’m in.
20K to end all the nonsense.
Might be the cheapest money any of us ever spend.
The $20k will get us a blueprint. It will probably cost $100k-$250k to get a result, but when you consider the bang for the buck and spreading the expense out over hundreds of domainers, it becomes very cost effective and you get a REAL result.
Here’s the ICANN Registrar Accreditation Agreement:
http://icann.org/registrars/ra-agreement-17may01.htm
Read section 3.7.5… here’s a quote:
“3.7.5 Registrar shall register Registered Names to Registered Name Holders only for fixed periods. At the conclusion of the registration period, failure by or on behalf of the Registered Name Holder to pay a renewal fee within the time specified in a second notice or reminder shall, in the absence of extenuating circumstances, result in cancellation of the registration.”
If the requirement is that the registration is CANCELLED, then the name must be DROPPED, right?
We need to hold ICANN’s feet to the fire to make the Registrars follow the agreement.
Also, take a look at section 3.7.9, this is it in entirety…
“3.7.9 Registrar shall abide by any ICANN adopted specifications or policies prohibiting or restricting warehousing of or speculation in domain names by registrars.”
What’s the purpose of this section if it isn’t to state that warehousing or speculation by registrars amounts to dirty dealing???
Tucows and any other registrar that has picked up a single dropped name without sending it to acution has to be forced by ICANN to drop those names!
The Registrar Accreditation Agreement is currently up for public comment:
http://icann.org/en/announcements/announcement-18jun08-en.htm
Every domainer needs to make their voice heard here loudly and clearly that this crap has to stop.
Tell ICANN that language MUST be added to the Registrar Agreement to ABSOLUTELY PROHIBIT registrars from WAREHOUSING OR SPECULATION IN DOMAIN NAMES BY REGISTRARS. Send your comments to: raa-consultation@icann.org.
The deadline is August 4th!
The Tucows.com MESS mentioned in the DNJournal.com newsletter
http://www.dnjournal.com/newsletters/2008/june.htm
I also see GoDaddy reversed course and is doing the right thing. Will Tucows.com follow their lead and make some better decisions?
I met with Howard today and we agreed that the WADND board of advisors should weigh in and see if Tucows.com still meet the criteria for our seal.
Hope their shareholders are getting their monies worth. This is just the beginning of the fallout. Abuse of domainers is going to STOP and those that don’t believe it, just take a seat and watch how this unfolds. Remember last week Tucows had a chance to contain this. Now they don’t. This is unraveling faster than they can keep up with the events and it is going to spread further faster. When do you all think they will get a clue?
The Board of Advisors of WADND.com are now officially considering rescinding the “Seal of Approval” awarded to Tucows. I will post results when available. Probably in the next day or two if not sooner.
More fallout from a TERRIBLE response!
It has become clear that Tucows is being run into the ground (check their stock price over the past year) by the bunch of lying, petty thieves in Toronto who are now in charge of it.
Very super information.