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Can New gTLDs Save Demand Media ?

April 15th, 2014 Comments off

Scott Hopkins wrote a piece on Seeking Alpha today stating that the new gtlds were the last chance for Demand Media. Demand Media has been languishing in the stock market for awhile now. The stock is down 25 % this year and is down 46 % over a one year time period.

Demand Media owns Name.com and Enom and that is where Hopkins believes the magic has to happen. He is not a believer in the Demand Media web properties such as eHow and LiveStrong.com.  He refers to these sites as digital sharecropping, always at the whim of another Google algorithm update.

So if Demand Media is going to make a turnaround, Hopkins sees that happening with the new gtlds. It is worth noting some of the registrar figures Hopkins used in his hypothesis are not accurate. His reference to Name.com as having roughly 500,000 registrations is way off compared to latest numbers from registrarowl.com, they put Name.com at 1.2 million as of December 2013.

The article actually quotes Michael Berkens referring to a post he wrote in 2012 but its really just a post on a poll

Michael has already responded to Scott on seekingalpha.com as he believes he has been misquoted but nice to see that confirmation that people from outside the industry read thedomains.com

From the article:

Summary

  • New domain name extensions are being released daily. Will people use them?
  • DMD needs to move away from reliance on search engine traffic.
  • Profitability will depend on eNom and Name.com versus GoDaddy.

Right now Demand Media owns Name.com and eNom wholly. They also own a stake in Namejet. As far as market share is concerned, as you might expect, GoDaddy.com is the leader, with about 30% market share and growing. Second, is eNom with about 8% market share. Name.com is hardly relevant with approximately 500,000 domains registered and less than 1% market share.

eNom is in a valuable position at second place and growing. At over 6 million domain names registered, the company has 20% of the business GoDaddy, the undisputed leader in domain names, accounts for.

The most important element of the success of Demand Media’s domain name companies will be to how well the new gtld’s are promoted and how well the registrars promote them. However, even with great promotion, new TLD’s fail.

He goes on to discuss .CO although he focuses too much on the O.co situation and not the fact they have 1.6 million regs and that they just got bought out by Neustar for $109 million. I think every new string would love that scenario in the long run.

Read the full article here

Categories: demand media, External Articles Tags:

Web.com Officially Announces The Acquisition of SnapNames.com

March 3rd, 2014 Comments off

webdotcom-logo

Web.com Group, Inc. (WWWW) officially announced today that it has acquired SnapNames from KeyDrive S.A.

Shares are down over 2% in early trading today.

The questions yet to be answered is how will the acquisition effect where expiring domain names from Web.com registrars, including NetworkSolutions.com and Register.com will be going.

All expired domains of Netsol where going to SnapNames.com until it was acquired by Oversee.net, the company that sold SnapNames.com to Keysystems. Once Oversee.net acquired SnapNames.com Netsol went into partnership with Demand Media, INc (DMD) to form Namejet.com which has over the last years been the exclusive auction house for expired Network Solutions domains.

We have asked both Web.com and Demand Media, Inc over the weekend how this acquisition will effect dropped domain names but neither has furnished a definitive answer.

SnapNames is a drop service and online auction house including expiring, deleting and privately-owned domain names.

“We are very pleased to bring SnapNames under the Web.com umbrella,” said David L. Brown, chairman, chief executive officer and president of Web.com. “This acquisition enables us to enhance our existing domain related assets and provide additional services for customers who are looking for specific domain name addresses. In today’s expanding domain resale marketplace, SnapNames is a global industry leader with experience and expertise in domain lifecycle management and auction services.”

“”Web.com owns two of the world’s largest retail registrars in Network Solutions and Register.com. With the addition of SnapNames, Web.com will further expand its global partnership channel by leveraging SnapNames’ extensive international network, thus helping customers find the right domain names the first time they look. In addition, the acquisition complements NameJet, the domain name auction platform managed through a joint venture partnership with Web.com and Rightside.”"

In a press release issued by the seller of SnapNames, Key-Systems said:

“Moniker now plans to work even more closely together with KeyDrive and its sister company Key-Systems to strengthen its position on the US registrar market and to become an even more powerful international registrar.

“KeyDrive will be reinvigorating the Moniker brand with new technology, products and commitment to their customer service”, said Alexander Siffrin, Chairman of KeyDrive.”

“”The disposition of SnapNames will have no negative effect on the customer experience of the Moniker clients. The same staff will be taking care of all customer needs and customers will access their accounts as before. Moniker will continue to work with SnapNames as in the past and the usual business will not be interrupted for clients.”"

“”In February Bonnie Wittenburg assumed the position as Moniker CEO.…

Demand Media Fall Under $5 A Share Down 10%

February 26th, 2014 Comments off

Demand Media, Inc. (DMD) released its earnings for the 4th Quarter of 2013 as well 2013 numbers and the market apparently didn’t like them.

Demand Media, Inc. is hovering around $5 a share down about 10% from the closing price last night hitting an intraday low of $4.95

Demand has a 52 week high of $9.75

At its current price, Demand’s market cap is $459 Million dollars.

Demand Media, Inc, is intending to spin off its registrar, registry and new gTLD business into a new public company Rightside.

 

 

 …

Demand Media’s Parking Revenue/Domain Sales Down 33% In 2013 & They Are Confused On gTLD Numbers

February 26th, 2014 Comments off

In the earnings call yesterday Demand Media, Inc. (DMD) had some interesting details about the financials they released for the 4th quarter of 2013 and for the full year 2013 and some interesting statements which demonstrate they are somewhat confused by the new gTLD numbers.

First for the results:

“In aftermarket services revenue, which represents premium domain sales and advertising revenue from our Owned & Operated third-party park domains of approximately $8 million and decreased 33% year-over-year due to lower advertising yield on domain parking and lower year-over-year domain sales.”

So in 2013 Demand is saying their revenue from parking and domain sales combined, was down 33% in 2013 Vs. 2012.

As for the new gTLD numbers,  well the statements made in the earnings call are inconsistent.

“More than 90 new gTLDs have been launched into the sunrise and/or general availability phases and more than 60 of those are leveraging Rightside backend registry platform, to-date, more than 150,000 domains have been registered on our platform.”

OK we agree with the 150K number which are all Donuts extensions.

Now here is where the trouble starts:

“”The sale number that we mentioned was 150,000 domains. Those were sold in sunrise essentially and so there’s a little bit in [GA], but I think it’s early enough to where there isn’t enough general availability, information to be able to draw, I think, even early trend lines with.”"

Hum

Based on a search of the zone files and reported by many blogs trademark holders didn’t widely apply for domains and there are still only 25K registrations in the Trademark Clearing House which at best would represent less than 20% of all registrations.

No Bueno.

Next statement:

“”I would say, we’re pretty pleased with the early results just given that, we — one of the questions was, what do we think the consumer demand is going to be in, within really a couple of weeks of being offered. We’re seeing hundreds of thousands of domains being registered. So we think that’s a pretty positive sign for the industry in general.”"

Well the number is 150,000 not hundreds of thousands and if they came mostly in Sunrise then they are not consumers registrations and if they are consumer registrations they are not Sunrise (brand) registrations.

Beyond that we know that the domainer community has a lot of skin in the game.

The words domainer or domain investor were not uttered during the call.…

Categories: demand media, External Articles Tags:

Demand Reports: Registrar Revenue Increases 12% in 4Q and 10% Year-over-Year

February 25th, 2014 Comments off

Demand Media, Inc. (DMD) reported its financial results for the fourth quarter and fiscal year ended December 31, 2013.

Q4 2013 Financial Summary:

  • Total revenue ex-TAC declined 3% year-over-year, with 12% year-over-year growth in Registrar revenue offset by an 11% decline in Content & Media revenue ex-TAC. Excluding the acquisitions of Society6 and Name.com, total revenue ex-TAC decreased 15%.
    • Registrar revenue grew 12% year-over-year, primarily due to the addition of Name.com, which was acquired at the end of Q4 2012. Excluding the acquisition of Name.com, Registrar revenue increased 2%.
    • Owned & Operated revenue decline of 5% was driven primarily by reductions in search engine referral traffic, offset by revenue of $8.4 million from Society6, which was acquired at the end of Q2 2013. Excluding the acquisition of Society6, Owned & Operated revenue decreased 23%.
    • Network revenue ex-TAC declined 31% due primarily to $3.5 million less revenue from the Company’s YouTube Channels as well as declines in the Company’s Social Media and Network Monetization businesses, offset partially by growth in Content Solutions.
  • Adjusted EBITDA decreased 39% year-over-year, primarily reflecting the negative impact from search engine referral traffic on high-margin revenues and a mix shift to lower margin commerce and Registrar revenue.

“We generated over $8 million of free cash flow in the fourth quarter and over $44 million for the year,” said Demand Media’s CFO Mel Tang. “We will continue to invest our free cash flow into our strategic content, commerce and new gTLD initiatives.”

Business Highlights:

Domain Name Services:

  • Launched our back-end registry platform in Q4 2013, powering the launch for over 60 new gTLDs and over 150,000 domain registrations to date.

 

  • Signed our first registry operator agreements with ICANN in Q4 2013, and have signed 14 agreements to date, including .dance, .democrat, .immobilien and .ninja, which are currently in their ‘sunrise’ launch phase.
  • Our registry entered into its first agreements with registrars to distribute our owned gTLDs, with over 40 signed to date.
  • Our eNom and Name.com registrar channels signed agreements with new registry operators to distribute new gTLDs and have launched over 80 new gTLDs to date.

Content & Media:

  • January 2014 US and Worldwide comScore Rankings:
    • On a consolidated basis, Demand Media ranked as the #19 US web property and Demand Media’s properties reached more than 88 million unique users worldwide.
    • eHow.com ranked as the #27 website in the US and reached more than 50 million unique users worldwide.

Rightside Announces They Have Over 40 Registrars On Board To Carry Their New gTLD’s

February 5th, 2014 Comments off

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Rightside™, the domain name services business of Demand Media (NYSE: DMD), today announced new partnerships with many of the world’s leading registrars to bring its portfolio of new Top Level Domains (TLDs) to market.

More than 40 registrars – including GoDaddy, Web.com, 1&1 and Host Europe, and Rightside affiliates eNom and Name.com have signed registrar agreements with Rightside Registry, creating an expansive and global distribution network. This agreement allows each registrar partner the opportunity to provide domain name services for Rightside’s portfolio of desirable and memorable new domains. In addition, Rightside Registry TLDs, .DANCE and .DEMOCRAT, are now available for early registration, allowing trademark holders to safeguard the domain name that matches their trademark, as well as allowing registrar customers to pre-order domain names.

“As we prepare to bring our new TLDs to market, we wanted to partner with the largest and most innovative registrars in the domain business to help capture the full potential of this new opportunity,” said David Ryan, general manager of Rightside Registry. “Entering into these agreements marks an important milestone for our business, and constitutes a significant step towards helping our customers define their unique digital identity.”

“The introduction of new TLDs brings unique options for small businesses to be successful online,” said GoDaddy Vice President Domains, Mike McLaughlin. “Domain names are essentially real estate of the 21st century – it’s your online address. Partnering with Rightside gives our customers the option of interesting TLDs for their business or personal needs.”

The entry into registrar agreements makes it possible for these leading registrars to make any number of the Rightside Registry new domains available during all phases of launch – from pre-registration to general availability. Current registrar partners include:

  • 1&1
  • CSC
  • eNom
  • EuroDNS
  • GoDaddy
  • Host Europe
  • Internetx
  • Mark Monitor
  • Melbourne IT
  • Name.com
  • ResellerClub
  • Web.com

Rightside Registry also announced that its first available TLDs, .DANCE and .DEMOCRAT, are now available for pre-order through partner registrars, and full registration for trademark holders. To qualify for purchase, trademarks must be validated with the Trademark Clearinghouse (TMCH), a centralized database that verifies trademark information. Once the trademark is validated, the new domain will be available for registration through any registrar partner of Rightside Registry that a customer chooses to use.

As a popular pastime for both professionals (over 38,000 choreographers have profiles on LinkedIn) and amateurs (ABC Network’s Dancing with the Stars garners approximately 13 million viewers each episode), .DANCE is an exciting new domain that appeals to a mass audience.…

Demand Media Files With SEC To Spin Off Domain Registries and Registrars Into Rightside

January 13th, 2014 Comments off

Demand Media, Inc. (DMD), a leading media and domain name services company, today announced that its newly formed wholly owned subsidiary, Rightside Group, Ltd. (“Rightside”), has filed a Form 10 registration statement with the Securities and Exchange Commission in connection with the planned spin-off of Rightside as an independent publicly traded company.

“The filing marks an important step reached on Rightside’s path to becoming an independent company that will be one of the world’s largest pure-play, end-to-end domain name services providers.”

“In order to capitalize on the historic launch of new generic Top Level Domains (gTLDs) under the Internet Corporation for Assigned Names and Numbers (ICANN) program, Demand Media has made significant investments in its domain name services business, including securing interests in registry operator agreements or applications for more than 100 new gTLDs.”

These investments further strengthen Rightside’s existing business, with approximately 15 million domain names under management and a network of more than 20,000 active resellers and more than 225,000 retail customers.

The new company will own and operate an ICANN-accredited registry (United TLD) and ICANN-accredited registrars providing services to wholesale customers through eNom and to retail customers through Name.com.

It will also offer extensive aftermarket services for premium domain names, including domain name auction services through its NameJet joint venture.

“We are the world’s largest wholesale Internet domain name registrar and with our newly launched registry, we believe that we will become the exclusive operator of one of the largest portfolios of new gTLDs in the industry. Our ability to provide a comprehensive platform for the discovery, registration, development, and monetization of domain names will enable us to fulfill Rightside’s mission to advance the way businesses and consumers define and present themselves online,” added Taryn Naidu, Demand Media’s Executive Vice President, Domain Name Services.

Demand Media previously announced that Taryn Naidu, who has led Demand Media’s domain name services business since 2011, will become Chief Executive Officer of Rightside, upon completion of the separation. Additionally, Rightside executive management will include Tracy Knox as Chief Financial Officer, Wayne MacLaurin as Chief Technology Officer and Rick Danis as General Counsel. Dave Panos, who previously served as Demand Media’s Executive Vice President, Emerging Markets and is currently a consultant to Demand Media, will be appointed as Chairman of the Board of Directors of Rightside.

 

About Rightside

 

Rightside plans to inspire and deliver new possibilities for consumers and businesses to define and present themselves online.…

Variety.com Publishes; Epic Fail: The Rise and Fall of Demand Media

December 4th, 2013 Comments off

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Variety.com just published a cover story on Demand Media, Inc. (DMD) and its less than flattering.

The article entitled Epic Fail: The Rise and Fall of Demand Media starts out:

“Take note, Twitter: Not every tech company has a happy ending after a ballyhooed IPO.

Just look at Demand Media, the Santa Monica, Calif.-based firm some thought would revolutionize content production. Not long after the company went public in January 2011, its market capitalization soared to more than $2 billion, sending the then-5-year-old firm’s value briefly past that of the New York Times Co.”

“Compare those heights with where Demand finds itself today, having plummeted to roughly a quarter of its peak value.”

“Revenues for the most recent quarter were down year-over-year for the first time since that IPO. Co-founder Richard Rosenblatt is no longer CEO as of October”

“The chief exec’s role will be tough to fill given how steeply Demand has declined over its seven-year run. Changes in Google’s search algorithms have twice hammered the young company in recent years, leaving its few brands that managed to get significant marketplace traction, including eHow.com and Livestrong, hemorrhaging traffic.”

“The free fall of Demand serves as a cautionary tale for hype in the Internet age: No company burns so hot that it can’t cool off.”

“Early on, Demand used eNom’s 1 million generic domain names (such as “3d-blurayplayers-com”) to serve up relevant ads to people searching for specific topics. These “domain parking” pages were immensely profitable, generating north of $100,000 per day, according to a former Demand exec who requested anonymity.

“That’s $35 million-$40 million per year without doing any work,” the exec said.”

“But the tactic was fundamentally a bait-and-switch. Users landed on the pages expecting to find information on a subject and instead found an ad. To try to drive up traffic, Demand shifted its strategy, populating the sites with thematically related content. ”

“Demand then continued to build out the content-farm strategy, treating the domain-name registration business as largely separate from the content-production arm. Paying contributors comparatively little — usually less than $20 for a single article or video — it built up a stockpile of content against which it sold targeted advertising.”

“By April 2011, third-party measurement services were reporting that the Google changes had reduced traffic to Demand sites by as much as 40%. Demand issued a statement that the reports “significantly overstated the negative impact” of the change, but the stock took a dive — plummeting 38% over two weeks — from which it has not recovered.”

“While still the 25th most popular site on the Internet and on mobile in the U.S., Demand is bleeding out fast.…

Demand Reports: Media business Negatively Impacted by Declines in Search Referral Traffic & Advertising Demand

November 7th, 2013 Comments off

 Demand Media, Inc. (DMD), reported its earnings after the market closed today.

Demand’s earnings were in line with estimates, but revenue was above estimates.

However it seems like Demand is fighting a losing battle on the eHow front as changes in Google search algorithm is negatively effecting that part of the business.

For Demand in My opinion the spin off of the domain service business can’t happen soon enough

“This quarter, our media business was negatively impacted by declines in search referral traffic and advertising demand. ”

Q3 2013 Operating Metrics:

  • Owned & Operated page views increased 21% year-over-year to 4.1 billion, driven primarily by mobile page view growth on our core Owned & Operated sites, which more than offset significant declines in search engine referral traffic. Owned & Operated RPMs decreased 13% year-over-year, reflecting the mix shift to lower yielding mobile page views as well as lower direct display advertising, offset partially by increased revenue from the sale of undeveloped websites and revenue from Society6.
  • Network page views decreased 37% year-over-year to 3.1 billion, as the Company made the strategic decision to refocus its direct sales efforts on its Owned & Operated properties. Network RPM ex-TAC decreased 20% year-over-year, reflecting lower revenue from the Company’s YouTube Channels and the previously mentioned unfavorable revenue adjustment.
  • End of period domains increased 7% year-over-year to 14.6 million, driven by the acquisition of Name.com, with average revenue per domain up 5% year-over-year, due to higher domain pricing and higher average revenue per domain on Name.com.

Business Outlook

The Company’s fourth quarter and fiscal year guidance assumes that the recent substantial declines in search engine referrals to some of the Company’s websites will not reverse.

The Company’s guidance is as follows:

Fourth Quarter 2013

  • Revenue in the range of $98.0 – $101.0 million
  • Revenue ex-TAC in the range of $93.0 – $96.0 million
  • Adjusted EBITDA in the range of $16.0 – $19.0 million
  • Adjusted EPS in the range of $0.03 – $0.04 per share
  • Weighted average diluted shares 90.5 – 91.5 million

Full Year 2013

  • Revenue in the range of $396.0 – $399.0 million
  • Revenue ex-TAC in the range of $378.0 – $381.0 million
  • Adjusted EBITDA in the range of $86.0 – $89.0 million
  • Adjusted EPS in the range of $0.26 – $0.28 per share
  • Weighted average diluted shares 88.5-89.5 million

The Company’s guidance excludes estimated expenses in 2013 of $8 to $10 million related to the Company’s gTLD initiative and $6 to $8 million associated with separating Demand Media into two distinct publicly traded companies.…

Demand Media to Spin Off Domain Registration Business into RightSide [Press Release]

November 5th, 2013 Comments off

Rightside websiteAs already predicted by Andrew over at DNW:

Demand Media Announces Key Executives and Name for Proposed Domain Services Company

Company Will Lead Expansion of Generic Top Level Domains under Rightside Brand; Taryn Naidu Selected as Incoming CEO

SANTA MONICA, Calif.–()–Demand Media, Inc. (NYSE: DMD), a leading media and domain services company, today announced that Taryn Naidu, who currently serves as Demand Media’s Executive Vice President of Domain Services, will become the CEO and a Director of the newly formed domain services company that is proposed to be spun off from Demand Media. Demand Media also announced that it has selected the name Rightside Group, Ltd. (“Rightside”) for the spun off domain services business.

“It’s an exciting time for us, as new gTLDs start going live this year and our path to becoming an independent public company as a leader in our industry progresses.”

Rightside will be a Kirkland, WA based technology and services company for the Internet domain industry. The company will advance the way consumers and businesses define and present themselves online through a comprehensive technology platform making it possible to discover, register, develop, and monetize domain names. Rightside will play a leading role in the historic launch of new generic Top Level Domains, and the name represents a new way to navigate the Internet, while establishing the new company as the one to guide users in the right direction. It’s everything to the right of the dot – and beyond.

Taryn Naidu, who has led Demand Media’s domain services business since 2011 will become Chief Executive Officer of Rightside, upon completion of the separation. Additionally, Rightside executive management will include Wayne MacLaurin as Chief Technology Officer and Rick Danis as General Counsel. David Panos will be appointed as Chairman of the Board of Directors and Shawn Colo, Demand Media’s Interim President and Chief Executive Officer, will be appointed as a Director of Rightside in connection with the separation.

“Establishing the leadership team and brand identity of the proposed new company marks an important milestone in achieving our plan to separate our business into two distinct market leaders,” said Demand Media Interim President and Chief Executive Offer Shawn Colo. “I am pleased to announce a very strong executive team led by Taryn. This team has a wealth of industry experience, has played an integral role in building the largest wholesale domain registrar and is driving the transformation of this business into one of the largest end-to-end domain name service providers in the world.”

“Rightside’s mission will be to help millions of businesses and consumers define and present themselves online. We’re able to deliver on this through our distribution network of more than 20,000 active partners, one of the leading domain services technology platforms, a large number of applications for new generic Top Level Domains (gTLDs), and a deep bench of industry talent,” said Taryn Naidu, newly designated incoming Chief Executive Officer of Rightside. “It’s an exciting time for us, as new gTLDs start going live this year and our path to becoming an independent public company as a leader in our industry progresses.”

About Rightside

Rightside plans to inspire and deliver new possibilities for consumers and businesses to define and present themselves online. The company will be a leading provider of domain name services, offering one of the industry’s most comprehensive platforms for the discovery, registration, development, and monetization of domain names. This will include 15 million names under management, the most widely used domain name reseller platform, more than 20,000 distribution partners, an award-winning retail registrar, the leading domain name auction service and an interest in more than 100 new Top Level Domain applications. Rightside will be home to some of the most admired brands in the industry, including eNom, Name.com, United TLD and NameJet (in partnership with Web.com). Headquartered in Kirkland, WA, Rightside will have offices in North America and Europe. For more information please visit www.rightside.co.

About Demand Media

Demand Media, Inc. (NYSE: DMD) is a leading digital media and domain services company that informs and entertains one of the internet’s largest audiences, helps advertisers find innovative ways to engage with their customers and enables publishers, individuals and businesses to expand their online presence. Headquartered in Santa Monica, CA, Demand Media has offices in North America, South America and Europe. For more information about Demand Media, please visit www.demandmedia.com