Domain registrar and software download site Tucows is relaunching its reseller parking programs. Will this help its sagging stock price?
November has been a dissapointing month for shareholders in Tucows (AMEX: TCX). After opening November 1 at $.97 a share, the stock has fallen to a low of $.69 a share. Shares closed yesterday at $.79.
At the heart of the drop was a dissapointing earnings announcement. Tucows blames reduced registration fees it is charging resellers. The company believes these reduced prices will help the company in the long run. It also means competition is fierce.
Yesterday, Tucows announced the relaunch of its Parked Pages and Expired Domains parking programs. Tucows resellers will earn a 50% share of Tucows parking revenue on unused domains as well as domains that have expired. Also, Tucows will share aftermarket sales revenue with resellers. If a domain expires and Tucows sells the domain in the aftermarket, resellers will get 10% of the net revenue.
Interestingly, a press release from Tucows about the reseller program explains that Tucows buys expired domains on its own account. Many registrars do this, but few so openly.
The press release notes, “When a domain name expires, Tucows may choose to purchase that name and place it in the Expired Names Program. If, at a later date, Tucows sells the domain through its Premium Domains service, the company shares 10% of net revenue with the original reseller.”
Doing this creates a conflict of interest. If a domain is earning just a bit of parking income, it makes sense for Tucows to not encourage the registrant to renew the domain. The margin on registrations is a buck or two; it can be much higher if Tucows owns the domain outright and collects pay-per-click parking revenue.
Hopefully this relaunch will encourage Tucows resellers to sell more and help the company’s sagging stock price.
Bill Sweetman says
Hi Andrew, I manage the Domain Parking programs for Tucows and I can assure you that we’ve gone out of our way to encourage registrants to renew their domain name with the reseller (our customer) that they registered it with in the first place. In fact, one of the key themes that emerged from our resellers when I spoke to them about the proposed changes to our Expired Domains Program was the need for greater communication to their customers (the registrants) that a domain name had expired. We incorporated several new elements into the relaunch of the program to address this, including messaging on expired domains that explicitly states ‘this domain has expired, please contact your registration service provider to renew it.’ We also have a very fair and very clear domain redemption policy that makes it easier for a registrant to reinstate a domain name months, not just weeks, after it has expired. Try doing that with one of our competitors! ;+)
Andrew says
Thanks for commenting, Bill. Glad to hear you’re being proactive about expirations.