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Tucows Lays Off 15% of Staff

Registrar blames industry and macro conditions for downsizing.

Domain registrar Tucows (AMEX: TCX) announced today that it is laying off approximately 15% of its staff. Tucows is just the latest domain name company to succumb to a deteriorating domain name market and economic crisis. A few months ago Oversee.net laid off 10% of its staff (removed link that is no longer active).

Yesterday Tucows announced earnings with a small loss for the third quarter. [Update: Tucows stock down 32% today].

In a statement on the Tucows’ web site, company CEO Elliot Noss said:

…We decided to take this step because of the uncertainty of overall economic conditions and the fact that our performance has been impacted by a number of unanticipated challenges during the first nine months of the year, including advertising revenues being dampened by the weakness in the economy and by reduced payouts to the domain channel by Google and Yahoo, which is in turn impacting domain portfolio advertising revenues and especially bulk domain portfolio sales.

I have also never seen a macro economic environment like we are seeing now. I am old enough to have lived through a number of down cycles but there are elements of this one that make it unique and that will take time to work through.

I am immensely proud of the great work our team has done together this year. The product launches of Butterscotch, Hover and Storefront. The brand launches of OpenSRS and YummyNames, and the smooth email migration to our new platform.

We are luckier than most in that what we sell, domain names and email, is more like milk and bread than like cars and refrigerators. We are also luckier than most in that we generate cash and will continue to…

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  1. Anonymous Coward says

    What elements of this downturn are unique, Elliot?

    If what you sell is like bread and milk, then why are you affected by this downturn enough to lay off all these people?

  2. Brett says

    Hey Elliot–didnt your blog have a whole explanation of your recent email system meltdown? How is that impacting business?

  3. Mansour elseify says

    The action by WADND to strip Tucows registrar of their seal of approval could only be interpreted as a self-serving action to influence registrars like Tucows to join other registrars auctioning their domain names through Snapnames, Namejet and others.
    As the value of domain names commands sometimes 6 and 7 figures, many registrars have used every trick in the book to make it difficult for domain owners to renew their domain names, sometimes by not accepting their credit card for payment for one reason or another, and other times not properly sending renewal notices to their customers, only for one goal and one hope, that the customer will not renew the domain name and on the 30th day, the domain name becomes available for auction to the highest bidder. And that is the real reason for all of the fuss. It is not because Tucows is doing something unscrupulous, but rather that Tucows puts their main loyalty first to their customers, and second to their investors and resellers. I personally own several thousand domain names with Tucows along with many other thousands that are owned by my customers, and I have not found that one domain that Tucows has acquired for their portfolio is subject to any complaint or an appearance of wrongdoing. As far as I know, Tucows is the only company that sends six renewal notices to the registrant before the domain name goes to “Pending Renewal of Deletion”. This phase takes 30 days, where the customer can still renew his domain name without paying any redemption fees which most registrars impose. After the 30-days period, Tucows allows another 30 days for the redemption of the domain name, where the registrant pays $100 as a redemption fee to reclaim the domain. In the meantime, Tucows takes some of those domain names after the 30 days for its own portfolio. In many instances, the customer is late to recognize that he did not renew his domain name(s). 100% of the time, when the customer sends an email stating that he or she did not renew their domain name for one reason or another, Tucows generously gave the domain name back to the customer without any charge. In many instances, the domain name in question was expired for many months.

    Looking at the decision taken by WADND, to suspend Tucows from the Registrar seal of approval, we have to examine who is the winner and loser here? The winners for Tucows are their domain owners, since they have a long period of time to get their domain names back after expiration; their stockholders since the domain portfolio owned by Tucows increases the value of the company’s assets, and Tucows resellers since they are able to acquire the domain names back for their customers, which makes the customers happy. The losers here are those who make their living out of the secondary market, either brokers or domainers. To conclude, I must say that all of the storm against Tucows is fabricated by those special interest groups, and Tucows should not need their approval or disapproval to conduct their business. I am hoping that the decision will not to be taken serious by Tucows resellers or customers and investors, to whom Tucows has their allegiance, and WADND will reverse there decision.

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