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Report on CentralNic sheds light on domain parking business

Report reveals performance of domain monetization during pandemic downturn. 

Screenshot of home page for ParkingCrew domain monetization service
Domain monetization is taking a hit in Q2.

Did you know that public companies can pay research firms to cover them? Well, at least if the company is traded on the London AIM.

Domain name company CentralNic (London AIM: CNIC) entered into a deal to pay Edison Investment Research £49,500 per year to produce a detailed report on the company and make quarterly updates.

With that significant disclosure out of the way, Edison’s initial report is worth reading. It lays out the CentralNic roll-up investment thesis in a way that the company probably couldn’t do itself due to forecasting and guidance rules.

It also discloses more details about the company’s domain name monetization business that it acquired late last year — Team Internet.

Team Internet owns domain parking company ParkingCrew.com.

As I suspected, Team Internet has taken a bit of a hit in Q2 during the Covid-19 crisis as the ad market has come under pressure.

CentralNic grossed $56.4 in Q1 2020, but Edison forecasts $43 million in Q2 due to the ad slowdown. Domain registrations are up, so the hit on the ad business must be severe.

The report states that CentralNic hopes to cater more to domain investors with its acquisition of Team Internet.

It also discloses some of the economics of the ParkingCrew business. The service monetizes 22 million domains owned by 35,000 people. It pays 75% of its earnings to the investor and keeps the other 25%. This nets out to $10.09 on average per domain per year to the investor and $3.36 to CentralNic.

Update: Edison has updated its report, changing the numbers it reported regarding parking. The report now states:

From its share, Team Internet pays the majority (the exact percentage is based on multiple factors like the quality of traffic) to the domain name investor, retaining a small portion to run the platform. Based on 22m domain names, Team Internet’s reported revenue of US$74m (51 weeks to 24 December 2019), implies average revenue per domain name for Team Internet of c US$3.36.

I wouldn’t discount the original report details, however. I suspect that, on average, it pays out 75% and keeps 25%. Its reported revenue numbers are likely net of partner payouts.

The business generates $1.6M of revenue per employee.

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  1. Tony says

    “This nets out to $10.09 on average per domain per year to the investor and $3.36 to CentralNic.”

    That can’t be right, ie, per domain. 22 million domains would mean $220M to 35,000 domain investors. More like $10 per year per investor.

    • Andrew Allemann says

      $10 per year per investor is too low, but you made a good observation. Edison has updated its report. I believe that Team Internet reports its revenue net of partner payments, so it’s 22M x $3.36.

  2. Matt Wegrzyn says

    Likely, that is 22M in their database. They don’t have 22M domains actively resolving to them at any single given moment. The statistics are publically accessible. Not even remotely close to 22M.

    Likely, that figure references added to them historically via the user interface since the beginning of the company, which doesn’t really mean all that much.

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