Rightside had to sell and Donuts is the logical buyer.
Last week, Donuts agreed to acquire Rightside (NASDAQ: NAME) for $213 million. As luck would have it, I was vacationing in Costa Rica when the deal was announced. I gave some initial thoughts right after the news broke, and now I’ve had more time to think through the deal and the ramifications.
Rightside had to sell
There was no question that Rightside was going to be acquired or go private in some way. After selling eNom to Tucows for $83.5 million earlier this year, the company was just too small to remain public.
It also had lots of pressure to perform, and the numbers weren’t heading in the right direction.
It had to sell eNom because it was about to lose its biggest customer. This move increased the attention on new top level domains, and new TLD revenue was stalling.
Here’s a look at Rightside’s registry revenue, which includes sales of its 40 top level domains as well as fees collected for managing technical registry services for Donuts’ top level domains:
Revenue grew as the company launched top level domains, but stalled once the funnel of new domains dried up. Click here to continue reading…