Domain company sees profit plummet as revenue slips 6%.
Dark Blue Sea ASX (Code: DBS), parent company of domain parking provider and domain registrar Fabulous, reported that profits for the second half of 2008 plummeted 80.5% compared to the same period in 2007 as revenue dipped 6.3%.
Revenue totaled $14.56M compared to $15.53M in the second half of 2007 (All dollar figures in Australian Dollars). The company blamed a weakening United States ad market for the revenue decline. Profit totaled just $359,076 for the half. Favorable currency swings helped the company.
Dark Blue Sea saw a sharp increase in the cost of traffic, including higher renewal fees on its 515,000 company owned domain names and payouts to parking partners. The company is re-evaluating its portfolio based on changing economics. Operating cash flow was essentially flat, leaving the company with almost $2.5M cash and short term investments.
Although advertising pay-per-click revenue (domain parking) declined, the company saw increased revenue from domain registrations and sales of domain names. The company will focus on its Domain Distribution Network, a domain sales platform, in 2009.
Shares of Dark Blue Sea are trading for $.20. The last stock trade was February 25.
wannadevelop.com says
Currently, they have way too many crappy domains which were registered some 4 or 5 years ago which consist of 3 and 4 keywords as well as many dashes. Not too many of them sell, for obvious reasons, or get any traffic.
They used to get a lot of traffic, via Google, Yahoo and MSN — but that is a distant memory.
Their setup used to game the search engines pretty well and it manipulated them in such ways that there would be lots of organic traffic coming in. The search engines have tweaked their algos though a while ago.
I am very surprised they have kept all those domains over the years. If those domains would come up for sale on any domain forum, they wouldn’t even get picked up for $10 by any domainers. I am 100% sure of this.
They will be dropping a lot of their domains sooner than later. They have been holding on for way too long. No choice.
wannadevelop.com says
Actually the domains I am talking about are from 2002 / 2003.
Fabulous.com and Dark Blue Sea is a good company though.
Innovation is what they are missing.
They have been doing a lot of things right but they could do much more.
I’d love to see them get it together and rock it in 2010.
2009 is going to suck though.
All the best,
Mike
kris says
Could be a good time to buy shares.. 🙂
Johnny says
We will look back on 2008 like it was a cake walk. I think the whole industry is crashing and there will be blood in the streets…so to speak. I expect a major flood of drops to really begin picking up in a about two months….it has already started.
Parked went down the other day and no mention of compensation for down time was give. That has never happened. I think Parked is hurting for cash also.
.
Ross says
Andrew,
Do you think they can survive the downturn?
Andrew Allemann says
@ Ross – I’ll have more on that soon 🙂
But the good news is their cash is holding steady.