Displaying posts tagged under "Demand Media"
Company hit with parking clawback from a previous quarter.
Ask any domain parking company about their top frustrations, and clawbacks will be high on the list. Basically, their upstream ad partner will clawback previously paid revenue based on traffic quality. This often happens after the parking customer has paid its partner.
These clawbacks can apparently be quite big, as evidenced in today’s Demand Media earnings call.
Speaking about a tough third quarter, Demand Media CFO Mel Tang noted that a parking clawback was one of three factors that hurt earnings in the quarter:
Results were impacted by 3 main factors: lower search engine referrals, causing additional traffic declines, softer-than-expected display advertising revenue and an adjustment from an advertising partner related to activity on certain third-party domains prior to the third quarter that negatively impacted revenue and EBITDA.
In this case it appears the clawback was from an earlier quarter. It must have been significant to warrant mention on the conference call. [Update: from Demand Media's 10-Q, the clawback was $1.6 million.]
Later in the call, Tang elaborates on the clawback:
Yes. So basically, related to a catch-up adjustment that we got notified of quarters after, I think the traffic quality was identified. And so it was unexpected in the quarter, it came in, in fact, sort of right as the quarter was closing. And so we put additional processes and communication lines in place with that partner to ensure that we don’t get a negative surprise like this in the past, that we try and be very rigorous in terms of who we onboard into that system. But at times, it’s hard to see who’s — what people are putting through. But we’re working very closely with that partner to ensure again that there isn’t sort of such a delayed negative surprise.
Also on the earnings call, Demand Media broke out revenue between the company’s content business and the domain name spinoff called Rightside.
In Q3, domain services revenue, which primarily represents domain registration fees and value-added services, was approximately $36 million. Aftermarket services revenue, which represents premium domain sales and advertising revenue from Rightside’s own domains, was approximately $10 million.
It seems that the business is not doing very well from a growth perspective. Domain services revenue was up mostly due to the Name.com acquisition, and Aftermarket was down 7% year-over-year. In Aftermarket, growth in domain sales partially offset a domain parking revenue decrease and the clawback.
No wonder Rightside is looking forward to the introduction of new top level domain names.
Rightside is right.
Last week I wrote about how signs were pointing to Demand Media calling its domain name spinoff Rightside.
Today the company formally announced that the name will indeed by Rightside.
Rightside Group, Ltd. will encompass Demand Media’s current domain name services (eNom, Name.com, United TLD, NameJet) as well as its large portfolio of domain names.
The publicly traded company will be led by Taryn Naidu, currently Demand Media’s Executive Vice President of Domain Services. Dave Panos, who came to Demand Media when it acquired Pluck, will serve as Chairman of the Board.
Why “Rightside?” The coming expansion to the right of the dot certainly played a role. Here’s what Naidu wrote in the company’s first blog post:
Our name – Rightside – in part reflects this exciting new way to navigate the web. But it also encompasses our commitment to have the technology, creativity and support in place to help guide people in the right direction as they navigate this new world of digital identity and online expression.
One thing Rightside does not have is the domain name Rightside.com. It will instead use the domain name Rightside.co, which is quite a statement itself. One option the company had for a brand was Name.com, but I suspect the fact that .com would be in the company name was a non-starter.
Company files trademark applications that may be for spinoff.
Demand Media is in the process of spinning off its domain name business into a new publicly traded company.
Will it be called Rightside?
Earlier this month Rightside Group, Ltd. filed four intent-to-use trademark applications for the brand “RightSide”. Rightside Group, Ltd., was formed in Delaware on July 11, 2013. The address on the trademark applications is Demand Media’s office in Seattle.
All of the applications pertain to the field of domain names. A good portion of the descriptions focus on new top level domain names and registry services, so I suppose it’s possible that Rightside is merely a new brand for a product or division within Demand Media’s domain name business. But reading the Goods and Services description on all four applications leads me to believe this is the name of the spinoff:
“Parking domain names for others, namely, providing computer servers for facilitation of the storage of domain name addresses”
“business services relating to the acquisition and development of domain names and websites; online auction services via a global computer network”
“computer services, namely, enabling users of the Internet to deliver information about themselves and, if applicable, their businesses, products or services, and to register their universal resource locators…”
Sure sounds a lot like the entire registrar/registry/expired/parking business to me.
Richard Rosenblatt resigns as Chairman & CEO of Demand Media.
There’s been a change at the top of one of the domain name industry’s biggest companies.
Demand Media announced today that Richard Rosenblatt has stepped down as Chairman and CEO of the company. Shawn Colo has been named interim President and will be the interim CEO once Rosenblatt’s resignation from that position is effective at the end of this month.
Rosenblatt and Colo co-founded the company in 2006 and took it public in 2011. It went public at a valuation of over $1 billion; It’s market cap is now about half of that.
The company acquired a number of domain name companies including eNom and HotKeys, and owns a substantial number of domain names. It plans to spin off its domain name business into a separate publicly traded company.
Banfield to lead eNom and Name.com.
Earlier this week Demand Media announced that it hired Steve Banfield to serve as SVP and GM of Registrar Services. Demand Media owns domain name reseller eNom and consumer registrar Name.com, both of which Banfield will help lead.
If his name doesn’t ring a bell, that’s because Banfield is new to the domain name industry. His experience with domain names is limited mostly to registering domain names here and there for projects.
Even though he has limited direct experience, he points out that there are links between domain names and what he has dedicated much of his career to: digital products.
“When you’re selling a domain, you’re selling a digital good,” he explained.
His experience with digital goods includes stints at a division of Paramount Pictures, Sony, RealNetworks, and Microsoft.
As Demand Media gets ready to spin out its domain name business, Banfield said he saw opportunity.
“You have a great, growing business that’s poised for additional growth with new TLDs,” he said. “You have a great growing business about to be spun out from a different entity.”
He said he started adding these things up, along with a cultural fit, and decided to make the jump.
Given Demand Media’s role in the domain ecosystem, you can expect to see Banfield at industry conferences in the future.