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.