Tucows reports stable revenue and increase in brandable domain sales.
Tucows today reported earnings of $.07 per share for the third quarter, compared to a loss of less than a penny per share in the same quarter last year. The company benefited from income from its final receipt for selling its stake in domain name registry Afilias, as well as from foreign exchange gains. Revenue held essentially steady compared to last year.
On its investor conference call today, Tucows CEO Elliot Noss reported strong sales of “brandable” domains through its YummyNames division. The company sold about $250,000 worth of these domains, on top of direct navigation domain sales. The total YummyNames take for the quarter was $1.782 million including parking revenue.
The company doesn’t expect as much revenue from direct navigation sales in the future because it has cleared out a backlog. It has a regular agreement to sell about $100,000 worth of expired direct navigation domains every month or two, Noss explained.
Noss also alluded to a future partnership with NameMedia to list brandable domains for sale:
The number of brandable domain name transactions has shown great progress through September and continue to accelerate in October. We expect this to be helped further as we finalize the deal to list our domains in the buydomains.com and afternic.com market places and distribution networks, which we view as the best buy now marketplaces in the secondary market.
When adding expired domains to its portfolio, Tucows plans to focus on the brandable name segment going forward:
…So over the couple of few years that we were sort of taking the [exit] from our expiry stream, we built up a bit of a backlog of those direct navigation names and you remember those are the names that are really valued on a multiple of revenue based on their traffic, not for in any way their value to a company who might want to name themselves or use the name line of business and we are really focused on those brandable names.
small correction. we have identified brandables as our strategic focus in this space for a couple years.
nothing new there. just the execution and the maturity of the secondary market catching up to our intentions.
I am one of their happy customer. I bought a domain name in affordable price.
Cheers,
EM @ KING.NET
A lot of people may look at $250,000 as small potatoes. But it’s basically 100% margin (ignoring carrying costs). If domain registration carries a 10% margin, this is like selling $2.5M in additional registrations.
It’s pure profit Andrew. Taking ownership of something that you really shouldn’t and then selling it for $250,000. Brilliant model. Remember people, registrar hoarding pays! Congrats Elliot.
While seeking the dollar to please your shareholders you’ve thrown away any semblance of ethical behavior in the registrar space. At least your fellow registrars put their customers names up for auction. Stupid them.
BTW all of those direct nav names you talk about, they wouldn’t happen to be of the trademark variety would they?