Domain Name Wire | Domain Name News

Domain Name Industry News

Featured Domains

Tucows exits its domain name portfolio

by — Domain Registrars 7 Comments

Company no longer holds a portfolio of domains for the secondary market.

Tucows logoTucows (NASDAQ: TCX) released its Q3 earnings yesterday. You can see the numbers here (pdf), but they aren’t the headline for the domain segment. Instead, it’s this: after many years of owning its a domain portfolio, Tucows has exited that business.

It still owns a portfolio of surname domain names that it uses for its Realnames email service. But it no longer holds a portfolio of domain names to monetize via pay-per-click and to sell on the aftermarket.

It sold the remainder of its portfolio over the past few months. It made a bulk sale of $1.9 million during the third quarter and $1.4 million after the quarter ended. (I believe that GoDaddy was the buyer.)

Tucows CEO Elliot Noss explained the change in the aftermarket business in the latest pre-recorded investor conference call (pdf):

We have owned our own portfolio for a little over a decade now, and it’s been a great tactical business, consistently generating sales in the range of $2 and $3 million annually, with relatively little ebb and flow, and with some years punctuated by a larger bulk sale or two.

Throughout this period, two things were true. We were always adding to the portfolio through the expiry stream and we were always needing to increase the transaction volume in order to maintain the same levels. At the same time, the underlying demand in this segment was declining as the increasing sophistication of SEO and related online advertising technologies reduced the returns on direct navigation domain names. We have all witnessed the maturation of online advertising technologies over this time as they evolved from a relatively blunt instrument to an amazing precision tool that now tracks every element of our life with great accuracy and provides incredibly efficient, if sometimes annoying, results. Through this maturation, the value of domain name traffic has declined to the point where we made the decision, starting a couple of years ago, to first reduce our exposure to this segment, and  finally, to exit it completely. We do want to note that the value of a premium domain name, as a name for a company itself, has never waned — it’s at least what it was when we started this exercise –and might even be up over time. Despite the fact that premium names was the segment of the market that we focused on, the value of leads was the primary driver for the health of this segment.

Tl;dr: Direct navigation and domain parking went to shit, which has dramatically changed the domain name investing business.

There’s some good news for domain investors in this announcement. Investors were annoyed that Tucows would cherry-pick expiring inventory for its own portfolio. Now it’s sending all of it to GoDaddy Auctions.

Tucows releases earnings, quantifies lift from GoDaddy Auctions

by — Domain Registrars 2 Comments

Margin contribution from domains up due to price increases and Ascio; Tucows also explains lift from moving Enom expiry stream.

Picture of stock ticker board with words "earnings announcement" below it

Tucows (NASDAQ: TCX) released second quarter earnings (pdf) yesterday after the close of the market.

The company has three business lines: domain names, mobile service and internet service.

For the domains segment, Q2 revenue was $60.5 million, up from $56.8 million in the same quarter last year.

The domain business can be further broken down into wholesale and retail. The Wholesale Business is its reseller network including Enom, OpenSRS and Ascio. Retail includes its Hover brand.

The wholesale business contributed $51.3 million revenue and the retail business contributed $8.8 million. Tucows also generates a small amount of money from its own portfolio of domains.

Total registrations are growing very slowly. Total Q2 registrations increased 1% year-over-year to 4 million including the lift from acquiring Ascio last year. Without Ascio, registration volume dropped 3.5%.

So why is revenue going up? The company raised prices last year and it’s boosting results across the board.

Gross margin in the wholesale business was up 20% year-over-year, and the domain portion of this (excluding value-added services) was up 30%. 40% of this increase was primarily due to the price increases and the other 60% is from the Ascio resellers.

Tucows also explained why its gross margin contribution for Value-Added Services jumped 19% in Q2 compared to Q1 of this year. It’s because the company moved its Enom expired domain inventory from NameJet to GoDaddy (NYSE: GDDY).

 

5 Domain Name Thoughts

by — Uncategorized 25 Comments

Here are some things I’ve been thinking about lately.

Man with thought bubble

It must be difficult for expired domain name research tools to compete with ExpiredDomains.net. It’s hard to beat free with such a solid feature set.

There’s a new domain name generator out that you might want to check out, called NameBounce. I tried it and got some good results. My favorite name generator is still LeanDomainSearch, and it appears to have gotten an upgrade recently.

Sedo’s auction board isn’t as active as GoDaddy and NameJet, but it’s worth stopping in from time-to-time. Right now Jet.biz has 16 bids and is $650. GV.biz has 17 bids and is EUR 355. Someone placed a $4,200 bid on FreeSlots.casino; I suspect that was pushed to auction after an offer.

Speaking of Sedo, I’d like to give them props for continuing to publish sales data. It’s very helpful for the industry.

For everyone who blasts GoDaddy’s appraisals, I challenge them to sort an expired domain list by the GoValues. Each value might not be perfect, but you’ll notice a marked drop in quality as you go down the list.

I sold another domain through Afternic today and I’m thinking it’s time for me to switch to buy now landers. I waste lots of time responding to inquiries with prices. I like how easy buy now is.

April’s Top Stories

by — Uncategorized 0 Comments

Here’s what happened in domain names last month.

These are the top five stories on Domain Name Wire last month ranked by pageviews.

1. Clothing company tries to reverse hijack domain name – A European clothing brand filed a “factually misleading” cybersquatting case.

2. When you buy a dead person’s domain name – This group had to change its domain name after the founder died and the domain expired.

3. Time is running out to reject unlimited .Org (and other) prices – You’re out of time to comment on .info and .org but .biz is still open.

4. Sheryl Sandberg loses cybersquatting claim over LeanIn.com domain name – Her foundation uses the domain name LeanIn.org and wanted to get LeanIn.com.

5. The .App “junk drop” is coming – The first year anniversary for .app has arrived and you can expect a lot of domain names to expire.

Podcasts:

#234 (listen) – Find out how Drew Wash’s domain development challenge worked out.
#233 (listen) – Learn how to sell with Brian Harbin.
#232 (listen) – Understand .Inc’s high-cost business model.
#231 (listen) – Hear why Trevor Mauch spent $600,000 on Carrot.com.
#230 (listen) – Learn Joshua Schoen’s domain acquisition strategy.

Should GoDaddy allow investors to list domains in the expired auction stream?

by — Domain Sales 11 Comments

It would be great for domain sellers but has some downsides.

There was an interesting discussion on Twitter over the weekend about auctioning domain names on GoDaddy.

The question is if GoDaddy should include non-expired domain auctions in the same way and feed as expired domain auctions. Should it do what NameJet does by allowing third parties to list inventory and have it show up just like an expired domain?

This would obviously be good for domainers that wish to liquidate their domains. Expired domain auctions at GoDaddy get a lot of views and sell for pretty good prices. I’d love to get some of my names shown on that channel.

There are some downsides, however.

1. When I buy domains through GoDaddy expired auctions, the fact that the domain is expiring has value in and of itself. There’s a higher chance that an expired domain hasn’t been marketed to end users than a domain an investor is trying to offload. Mixing in non-expiring domains means I have to do more homework.

2. Allowing third-party listings creates incentives for shill bidding. We know what happened at NameJet with this.

3. Expired domains have a guaranteed push, at least if they’re at GoDaddy. (This could be enacted for third-party listings, too.)

If GoDaddy ever decides to allow third-party inventory in its expiring auctions, they need to maintain the same structure: $12 opening bid, no reserve, and closeouts. Sellers would need to take the risk.