Domain Name Wire

Domain Name Wire

  • Donuts raises $100 million, applies for 307 new TLDs

    1. BY - Jun 05, 2012
    2. Uncategorized
    3. 11 Comments

    Flush with cash, new TLD applicant applies for 307 top level domains.

    Every week I check the SEC filings to see if Paul Stahura’s new TLD startup, Donuts, has raised more money. But every time I check there’s still just a filing about the $1 million it raised.

    And that number seemed just about right, since Stahura has gone on the record saying the company planned to apply for 10 top level domains.

    But today it dropped a shocker. The Wall Street Journal reports that the company raised $100 million in financing and is applying for a whopping 307 top level domain names.

    Update: read my conversation with Donuts here.

    The investment was led by Austin Ventures with Adams Street Partners, Emergence Capital, TL Ventures, Generation Partners, Stahurricane (Stahura’s own venture fund) and a number of smaller investors.

    Mason Cole, formerly with Oversee.net, has joined Donuts. So has former ICANN CFO Kevin Wilson.

    Also interesting is that Donuts is working with Demand Media for its registry backend services. Stahura sold eNom to Demand Media back in 2006. This is another shocker because Demand Media reported only picking up a small handful of registry clients. When it said that everyone assumed it was for just a few TLDs. But clearly that’s not the case. It also suggests that Demand Media worked with Donuts to make sure there was no overlap in what they are applying for. I can find no mention of Demand Media backing Donuts or that the $18 million Demand Media invested in new TLDs was actually a partnership with Donuts. The question remains: is Demand Media applying for any TLDs on its own?

    I think I can sum this up with one word:

    Wow.

11 Comments
  • 307 x $185,000 per application = $56,795,000.

    Wow is right.

    So these investors would rather speculate on new domains rather than invest on proven .com domains.

    A shocking way to piss away tens of millions of dollars but get ready for TENS OF MILLIONS OF DOLLARS

  • to enter the domain industry over the next few years.

    Crazy. Really just crazy.

  • John Berryhill says:

    June 5, 2012 at 9:12 am

    “So these investors would rather speculate on new domains rather than invest on proven .com domains.”

    Isn’t that the nature of speculation?

  • That is $185,000 per extension, whether the extension is even awarded, or awarded to someone else.

    If they applied for competitive extensions, I doubt they will be much of a player against other major companies.

    If the extensions are not competitive, then it it is a waste of money to start with.

    I can describe this investment with one word – THUD.

    With all this cash they should upgrade to Donuts.com instead of settling for Donuts.co

    Brad

    • @ Brad – how would they not be much of a player against other applicants on contest applications? They just raised $100M and have a line of credit. I’d argue they will have the upper hand in most cases.

  • All I know is that I still get those “Domain Regsitry of America” notices in the mail and I always think of Stahura.

  • I have a word too… FAIL

  • This is getting close to what Marchex paid for Ult Search and by the time all these tlds (the ones they get awarded) are launched it will likely surpass the Ult Search deal.

    That is a lot of dough to lay out for something that nobody has any idea how it will work out when there are certainly more proven investments out there for this kind of money. I wish them good luck. This will certainly have an impact on all of our futures.

    And yes, wow.

  • @rob – If you start counting marketing dollars new registries will spend, we’re probably talking about more than a billion $$ coming into this industry in the next two years.

    @Brad – .co was a deliberate decision, they could have gotten the .com if they wanted it. They didn’t.

  • Unlike some of the people that comment here I both own domains and sell domains (as a registrar) to end users at normal registration prices and have been doing that pre-ICANN. So I have a pretty good feel for what a typical end users wants in a domain name and what they will pay. In general it’s hard to get someone to register their company name as only one example in anything but .com although .net usually works as a backup since they are aware of .net and .org.

    About the only play I can see here is selling domains like boat.tldone boat.anothertld plumbing.tldfive etc. to users at a premium price. Knowing what I know about how people buy domains it’s not a risk I would be taking.

  • add……..DUH!

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