Tucows more than doubles and other domain stocks also on a tear.
It has been a decent year for the NASDAQ so far. But returns on domain stocks have been exceptional.
Consider Tucows (TCX), which opened the year at 75 cents. It has more than doubled to $1.52 at today’s open. The company continues to buy back stock, but I also think there’s overall enthusiasm for its domain business and the prospects of its mobile phone offering Ting.
Demand Media, which owns eNom, has jumped 35% this year to today’s open of $9.52. Investors are becoming more comfortable with the company’s ability to adapt to search engine algorithm changes. It’s also well positioned to take advantage of new top level domains. As a registrar, it will certainly profit from other company’s new TLDs. More risky is its $18 million bet on its own new TLDs.
Web.com (WWWW), which owns domain registrars Register.com and Network Solutions, is also up 35% this year to today’s $15.97 open.
Finally, .com and .net registry VeriSign (VRSN) has marched forward 9% this year. It has a lot of new TLD clients (over 200 applications), but I suspect its revenue from new TLDs will remain insignificant compared to its .com registry revenue for the foreseeable future.
Let’s not forget about how white-hot the private sector has also been.
Network Solutions sold to Web.com;
GoDaddy.com sold to a pair of VC firms;
Epik.com acquiring a private registrar;
KeyDrive acquired Moniker/SnapNames.
Could the industry be heating up for quality traffic or simply a long-awaited consolidated roll-up?