Operator of the dot-com registry and two root servers, Verisign, has settled one of its two lawsuits against upstart .XYZ.
CEO of XYZ, David Negari announced the news in an update on his personal blog. The unusual wording of the update was clearly a part of the settlement, with Negari noting that his company's actions had "prevented [Verisign] from the opportunity to pursue monetization of those relationships" and adding "we would caution others who find themselves in similar situations to be mindful of the existing contracts extension owners may have with third parties."
The infrastructure giant sued XYZ in August claiming that when the latter firm bought the rights to three new internet extensions -.security, .theatre, and .protection - it interfered with business by insisting that as part of the deal they end their agreements to use Verisign to run the registries. XYZ instead introduced its preferred partner CentralNic.
Verisign accused the company of "tortious interference" and "business conspiracy" and demanded just over $2m in damages.
It was perhaps not surprising that XYZ insisted on a change of the backend provider, given that Verisign was already suing the company over a completely different matter: XYZ's online ads for its domains that implied that dot-com domains were old hat and new internet domains were the future.
That lawsuit, which is still ongoing after Verisign appealed a decision to throw it out, is seen by the larger domain name market as a warning shot from the industry's one big giant not to try to build up their business by taking potshots at dot-com.
In the past two years, nearly one thousand new extensions have been added to the internet: everything from .amsterdam to .zone. Those new top-level domains have accumulated 17.5 million new names between them but that is still small compared to 125 million domains that exist under dot-com alone.
The .xyz extension has proved to be the most popular extension so far, boasting just under three million names, built up in large part by giving the domains away for free, at least initially.
Negari's note that he "would caution others who find themselves in similar situations" will only strengthen the belief that Verisign is making it plain that it is prepared to use its financial might to protect its reputation and market position. ®