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Web.com acquires Tucows’ half of NameJet

by — Expired Domains 0 Comments

Deal is a sign of the times in the expired domain business.

Web.com is now the sole owner of domain name auction site NameJet after acquiring Tucows’ (NASDAQ: TCX) interest in the business.

NameJet was created as a partnership between Enom and Network Solutions (now part of Web.com) in 2007 at a time when SnapNames was dominating the direct-transfer expired domain business. The deal meant that Network Solutions’ expired domain inventory would move to the new NameJet platform, delivering a blow to SnapNames. Oversee.net had just acquired SnapNames but knew about Network Solutions leaving the platform before completing the acquisition.

In 2014, Web.com acquired Snapnames from KeyDrive for $7.4 million. That meant that Web.com owned all of Snapnames and half of its competitor NameJet.

SnapNames and NameJet later combined forces on grabbing pending delete domains, which are domains that make it through the deletion cycle and are deleted by the registry.

Tucows acquired Enom last year and Enom’s half ownership in NameJet was a sort of “gift with purchase”. After the acquisition closed, Tucows shifted its expired domain name inventory from GoDaddy to NameJet, only to switch back to GoDaddy later in the year.

This was a big indication that GoDaddy was far better at monetizing Tucows’ expiring domain names than NameJet.

Today’s news makes sense. In fact, it probably makes sense to merge the SnapNames and NameJet platforms.

The big question is if Enom domains will remain on NameJet and for how long. This was obviously part of the negotiation and ultimate purchase price. If Enom leaves the platform for GoDaddy at some point in the future, it will further degrade NameJet’s role in the marketplace.

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How early should domain name registrars auto renew domains?

by — Domain Registrars 10 Comments

My domain registrars auto-renew anywhere from the expiration time to 60 days in advance.

It’s smart for domain name registrants to place their domain names on auto-renew. This means your domain name registrar will renew your domain name each year without action on your part. It prevents domains from accidentally deleting when you overlook a notice or forget to log in and renew.

I think it’s interesting how far in advance domain registrars renew domain names.

  • GoDaddy waits until the domain name is expired before renewing the domain.
  • Hexonet renews about 5 days before the expiration.
  • Uniregistry and Enom auto-renew one month before the domain expires.
  • At the extreme (at least of registrars I use) is 101Domain, which renews 60 days in advance.

There are benefits to early renewals and benefits to last-minute renewals. If you have a large portfolio, you might appreciate not being charged until the domain expires to minimize your cash outflows.

At the same time, an earlier renewal provides more time to rectify any billing issues (such as an outdated credit card number) before a domain enters the deletion cycle.

60 days? That’s a bit much. (I should note that some ccTLDs on 101Domain require early renewal from the ccTLD administrator, but this isn’t the case with .com). But I’m curious what other people believe is a good timeframe for registrars to auto-renew domains.

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My thoughts on Tucows’ earnings report

by — Domain Registrars 2 Comments

Tucows reported nice increases in revenue and income. There are changes afoot in its business, though.

Tucows (NASDAQ:TCX) reported first quarter earnings after the market closed Wednesday. The headline numbers are:

  • Net revenue up 38% YoY to $95.8 million
  • Net income up 53% YoY to 3.7 million
  • Adjusted EBITDA up 64% YoY to $10.4 million

Domain segment revenue increased from $50.3 million in Q1 2017 to $72.2 million in Q1 2018.

But…these numbers are a bit tricky to compare. Tucows acquired Enom on January 20, 2017, so the numbers get a bit of a lift YoY. A bigger impact was the bulk transfer of Namecheap names in January this year. Domain registrars recognize revenue over the life of a domain name registration. Transfering these names to Namecheap accelerated revenue recognition to the tune of $14.6 million.

On the cost side, it accelerated its recognization of $14.5 million in prepaid registry expenses.

This shows just how low the margin was on Enom’s Namecheap deal. However, the company benefited by monetizing Namecheap’s expired domain names.

Tucows CEO Elliot Noss also provided some commentary suggesting headwinds in the mobile access business Ting. When Ting came on the scene, the mobile phone business was a complete mess. Everyone hated their mobile provider, and this played in Ting’s favor. If imitation is the sincerest form of flattery, Ting is probably flattered right now. Both secondary brands and major ones have imitated some of Ting’s approach, and fewer people are looking to switch mobile providers now. It will be interesting to see how this plays out for Ting in the coming years.

I’m always a bit amused by stock analysts’ questions. I realize that they are covering lots of companies. I also realize they can ask the company questions while not on the investor conference call. But I’m amused at how pointless some questions are while they miss more important questions when it comes to updating their models. (I’m not channeling Elon Musk. He actually dismissed important questions.)

For example, a big question analysts should be asking is what impact the price increases at Enom and OpenSRS will have on both attrition and gross margins going forward. These seem like fairly drastic price increases for some customers and need to be baked into models. Maybe the net increases aren’t that big if most domains are at resellers with high volumes. The models should also assume some attrition due to the price increases.

Another interesting question is what impact GDPR changes have on revenue. This is a question people should be asking other public registrars. Specifically, if the registrar keeps personal information out of Whois for free, what happens to Whois privacy revenue? How much money are registrars making from Whois privacy?

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Consensus be damned: here’s how transfers will work at Tucows after GDPR

by — Domain Registrars 7 Comments

Tucows will follow TechOps subcommittee recommendation for domain transfers as ICANN figures out what to do.

Here’s the thing about GDPR and domain name registrars/registries: if they wait for ICANN to figure out how to address GDPR, it will be too late to make the necessary changes to comply with the law. GDPR enforcement goes into effect in just 23 days.

One registrar that has been at the forefront of making changes to comply with GDPR (and has been stating them publicly) is Tucows (NASDAQ: TCX), which owns both Enom and OpenSRS. It is the second largest domain name registrar in the world behind GoDaddy.

The company recently posted about changes it will make to its domain name transfer process as a result of GDPR.

As I’ve written about before, if you can’t access a domain registrant’s email address, you can’t do a transfer under the current methodology mandated by ICANN. Click to continue reading…

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Tucows changes domain name price structure

by — Domain Registrars 20 Comments

New pricing structure draws ire of some customers.

Tucows (NASDAQ:TCX), owner of the dominant reseller domain name platforms Enom and OpenSRS, is introducing new pricing on both of its platforms. The pricing is not uniform across the brands.

The pricing structure looks somewhat like an airline mileage club, requiring a minimum annual spend and number of new transactions in order to get the best pricing.

For example, the top Platinum Plus plan on Enom requires an annual domain spend of $100,000 and 1,000 new registrations or inbound transfers. That plan offers $9.00 .com domains and $12.00 .biz, .info, .net and .org domains.

The baseline Enom account will now pay $13.50 for .com domain names and $17.00 for .biz, .info, .net and .org.

Pricing for other TLDs at Enom hasn’t been adjusted yet but that will change in the future, the company stated on its site. Click to continue reading…

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