Tucows’ says domain parking revenue is down, but it may be on the rebound.
Tucows, a wholesale domain registrar and owner of 150,000 domains, saw its revenue from domain parking drop 12% in just one quarter, but CEO Elliot Noss says it may have hit bottom.
“In terms of where’s the bottom, we’ve started to see a little bit of a pickup now so we may have hit the bottom,” said Noss on an earnings conference call Tuesday evening.
Tucows direct navigation revenue is actually up 40% compared to last year, but that may be due to changes in its portfolio. The company thinks it will ultimately come out ahead now that the parking channel is being cleaned up by both Yahoo and Google.
“There’s another point here that I think is important is which is its not just that they’veâ€”that Google and Yahoo have pushed back on the payouts, they have also started to get more aggressive with some of the greyer parts of the market and long-term that affects us positively because we’ve got a very clean book of business,” he said. “The more sort of bad traffic and bad clicks that are pushed out of the system, the better it is for us in the long-term.”
Domain parking aside, Tucows numbers weren’t spectacular. It’s been an ugly couple years for investors in Tucows stock. The stock has traded as high as $1.09 during the last 52 weeks, but closed yesterday at just $.54 a share. That was before the company announced earnings after the bell yesterday. The stock has rebounded slightly this morning.
Revenue was down for the quarter compared to the same time last year, although the company’s revenue from last year included a $3 million domain portfolio sale. This past quarter it sold a $1 million domain portfolio of 3,700 domains, so there was a net $2 million bogey.
What can Tucows do to turn the ship around and make shareholders like Mark Cuban happy (Cuban owns 8.3% of the company)? The company says it’s been investing over the past year to right the ship. It is launching its new Hover.com brand later this year (the beta just went live), which will be a new approach to serving retail customers with e-mail addresses, domains, etc.
I have an idea that may help. Ask the Board of Directors to actually show up to the shareholders’ meeting next month. Last year everyone phoned it in except for Noss.