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Tucows launches Ting mobile phone service

Andrew Allemann — Thu, 02 Feb 2012 19:28:35 +0000

Tucows branches out, enters mobile phone business.

Tucows, which owns one of the world’s largest domain registrars, officially launched mobile phone service Ting today.

In a press release, Tucows CEO Elliot Noss said:

“What people are forced to put up with from mobile service providers just doesn’t make sense. It’s too complicated, too opaque, too adversarial, too expensive and frankly too inhuman.”

Ting offers simplified phone plans where you can purchase talk, text, and mobile allotments. If you use less of your allotment during the month you get a credit. If you go over you pay for the extra usage but not at a penalty rate.

The simplified service reminds me a lot of what Tucows did with Hover, a simple domain registration service.

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Tucows customers can now list domains in AfternicDLS Premium

Andrew Allemann — Thu, 26 Jan 2012 15:42:44 +0000

Potential inventory boon for Afternic.

Customers of Tucows can now list their domains for sale on AfternicDLS at the Premium level, Afternic announced this morning.

This means customers can list their domains with “buy now” prices and they can be sold through AfternicDLS’ instant transfer process.

Tucows had previously offered the ability to buy domains from AfternicDLS on its platform, which includes OpenSRS and Hover. But they couldn’t sell their domains though the Premium level on AfternicDLS, which requires the registrar to enable instant transferring of domain names.

This could prove to be a huge inventory boost for Afternic.

Tucows already listed its own portfolio of domains on Afternic, but now its customers will get access too.

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Monte Cahn and Oversee.net go to trial next week

Andrew Allemann — Thu, 19 Jan 2012 16:43:45 +0000

Court to decide two aspects of dispute between Moniker founder Monte Cahn and his former employer.

Monte Cahn and Oversee.net will square off in court on January 24, but it will be a limited non-jury trial over just a couple aspects of Cahn’s breach of contract claim.

The trial will seek to address two issues:

1. Oversee’s treatment of the Oversee EBITDA performance goal under Cahn’s bonus plan
2. Who counts as “TrafficClub customers” for determining if Cahn met his goal for domain monetization

Trial briefs submitted by the respective parties shed more light on the history of Moniker as well as Oversee.net’s performance in recent years.

Seevast sells Moniker to Oversee.net

Monte Cahn sold Moniker to Seevast (called Kanoodle at the time) in 2005. Seevast thought it would go public or be sold within a couple years. Cahn had a provision in the sale that would allow him to ask for Moniker to be sold again in two years if that didn’t happen.

After Seevast bought Moniker, Cahn stayed on with the company. It generated $3.6M in EBITDA in 2006 and $4.1M in 2007, according to Cahn.

After two years the Seevast exit did not materialize, so Cahn asked Seevast to put Moniker up for sale.

A number of companies made firm offers for Moniker, Cahn says, including Tucows, Sedo, Millennium, Baker Capital and two other private equity companies in addition to Oversee. Oversee’s initial offer was $50M. It ultimately paid $24.1M, according to Cahn.

Cahn says $10M of the price reduction was to help fund a Management Incentive Program (MIP).

Oversee characterizes the MIP as basically an earn out for Moniker employees. Cahn was to identify its participants each year by January 15, but Oversee.net says he didn’t.

The MIP covered four areas: Oversee.net’s overall performance, TrafficClub (domain monetization), domain sales, and registrar.

Overall Oversee.net performance

Is Cahn owed money under the MIP for Oversee.net’s overall performance?

Although the financial goals in the MIP for Moniker’s segments were determined when the plan was signed, the overall Oversee goal was left as “TBD”. The board would determine the goal each year.

Oversee’s board never set goals for the MIP. Because of this, Cahn says he should be held to the same EBITDA goals as the rest of senior management. Oversee claims that during negotiations of the MIP it demanded that it retain discretion to set different EBITDA goals under the MIP than for other senior management. The company says that, although it never set those goals for Cahn, doing so would have been an “idle act”. The goals would have been for improving financial conditions, but Oversee.net’s condition weakened shortly after the acquisition. It also points out that Cahn never consulted with the board or asked it to set the goal.

According to Cahn’s filing, in 2009 and 2010 Oversee.net’s EBITDA goal for senior management was around $24M each year, and Cahn says it topped this goal slightly each year.

Oversee.net also created an alternative plan for Cahn, under which he received bonuses in 2008 and 2009. It contends that Cahn could receive a bonus under either the MIP or the new plan each year, but not both.

Cahn says he deserves a bonus of $3.2M for Oversee hitting the EBITDA goals.

DomainSponsor and TrafficClub

DomainSponsor and TrafficClub have an interesting history.

TrafficClub was Moniker’s split-test parking system, which rotated traffic amongst many parking companies to figure out which domains earned the most on each system.

Before Oversee.net acquired Moniker there was a spat between the two companies with regards to TrafficClub. DomainSponsor pulled out of the TrafficClub program and reached out to TrafficClub customers to convince them to bring their business to DomainSponsor.

The Oversee.net acquisition surprised some in the industry because of this previous disagreement.

Shortly after buying Moniker, Oversee.net shut down TrafficClub.

At issue is how much (if any) Cahn is owed for his work bringing in new DomainSponsor customers and/or bringing on more revenue from existing ones.

Cahn says he worked hard to bring new clients to DomainSponsor or get existing ones to expand their business. He convinced Mike Berkens to transfer his entire portfolio. He also struck a deal with Jan Barta to advance $3M to him that would be paid off by monetizing domains. He also says he brought on traffic from clients such as Rick Schwartz, Tucows, and Marchex.

Cahn says that Oversee.net didn’t track the revenue he brought in to the new combined TrafficClub/DomainSponsor correctly. (It’s worth noting that Cahn originally was to run the Moniker division at Oversee, but later was given responsibility for DomainSponsor.)

There’s also a disagreement about which customers should be counted toward Cahn’s goal, and the court will decide that in this case. Cahn says the incentive plan includes customers that were on DomainSponsor (but not TrafficClub) when he joined Oversee but whose business Cahn grew after arriving. Oversee.net disagrees, saying the plan does not include these customers.

According to Cahn, DomainSponsor/TrafficClub’s gross profit was $51.7M in 2009 and $37.3M in 2010. That’s an interesting number to benchmark the fall in domain parking during that time.

Cahn says Oversee owes him $1.6M related to TrafficClub.

I think this gives a fair overview of what both sides are arguing. But the details are nuanced, and this summary by no means covers every point of fact the two parties will argue in court. It’s now up to a judge to decide.

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MyVault.com: Inside a UDRP

Andrew Allemann — Mon, 16 Jan 2012 15:43:21 +0000

MyVault.com owner fights back against UDRP complainant.

[Update: the complainant withdrew the case.] Over the holidays I noticed a UDRP was filed against MyVault.com at National Arbitration Forum.

I was immediately curious as to the back story on this given how this domain seems generic (and a good domain at that). Since National Arbitration Forum doesn’t publish the name of the complainant until a case is decided, I was left to guessing who filed the case.

But I’ve got the answer for you, as well as a glimpse into what it’s like to get hit with a UDRP on a domain name you registered nearly 12 years ago.

The domain is owned by Loren Stocker, a provider of toll free numbers and a domain investor.

The complainant is My Vault Services, LLC, which operates online at MyVaultStorage.com. It is owned by E-Insure Services, Inc., which owns the domain eInsurance.com and E-Insure.com.

Obviously MyVault.com is a superior name to MyVaultStorage.com. Stocker registered MyVault.com in 2000, which is why the complainant originally had to settle for less appealing domains such as my-vault.net and myvault.net.

While the company does have a trademark for “My Vault”, its first use in commerce date is after Stocker registered the domain. But in its complaint is argues it has common law rights to “My Vault” from its use dating back to 1997. Usually when you file a trademark application you try to claim a first use as far back as you can, so this is certainly interesting.

According to Stocker, the complainant filed an “Intent to Use” trademark application after registering My-Vault.net, which was after Stocker had registered MyVault.com.

You can read My Vault Services’ complaint here (pdf).

Stocker isn’t waiting around for a UDRP panel to determine the domain’s fate. He has sent a notice (pdf) to My Vault Services demanding that they withdraw the complaint. If not, he’s going to seek restitution including legal fees.

Sometimes complainants look at UDRP as a relatively safe crapshoot to go after a domain. If they lose, what’s the big deal? They’re just out a few thousand dollars.

But this isn’t always the case. I know of one domain investor who filed a lawsuit for declaratory judgment after merely receiving a cease and desist letter. Win a UDRP case against Tucows? Expect to have to fight in court, and not be able to merely run away.

UDRP certainly has its place, and complainants shouldn’t worry about filing cases for obvious cybersquatting, which is what the policy was created for in the first place.

But if it’s not a clear cut case of cybersquatting…complainant be warned.

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OpenSRS implements 100+ ccTLDs from EPAG acquisition

Andrew Allemann — Thu, 22 Dec 2011 14:49:30 +0000

Tucows’ reseller network now has over 100 additional domains to choose from.

One of the key reasons Tucows bought domain name registrar EPAG back in August was to bolster its offering of country code domain names (ccTLD).

Today it announced the first phase of its integration of ccTLDs carried by EPAG, adding over 100 new ccTLDs to its OpenSRS reseller platform. It will add more next year.

A lot of registrars I talk to tell me they see an immediate registration lift when they add new ccTLDs but the one-by-one integration is a pain. Tucows has “bought” and easier way of integrating.

ccTLDs have a multitude of policies around expiration, residency, etc. OpenSRS has published a very helpful chart comparing each top level domain.

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Tucows resumes stock buybacks, up to 12.2% of outstanding shares

Andrew Allemann — Fri, 16 Dec 2011 16:31:42 +0000

Company offers to buy up to 6.5 million shares of its stock.

Tucows, which owns the world’s third largest domain name registrar, announced a Dutch auction tender offer to repurchase up to 6,500,000 shares of its common stock. That’s up to 12.2% of Tucows’ outstanding shares.

The company has frequently bought back shares in its company as it feels it is the best use of cash right now.

Tucows CEO Elliot Noss explained, “We continue to believe that the repurchase of our shares at this price level is an attractive investment and that their repurchase by Tucows is a prudent use of cash that is consistent with our long-term objectives to create shareholder value and return capital to shareholders.”

The company will buy back shares for between 73 cents and 77 cents each. Shares today are up 1 cent to 76 cents.

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Marchex Shares Down 40% In 3 Months

Andrew Allemann — Tue, 15 Nov 2011 21:52:15 +0000

Marchex gets smacked around in the stock market.

The stock market isn’t showing any love to Marchex, one of the world’s largest holders of domain names.

Shares closed today at just $6.38, down nearly 40% from their $10.57 opening price on August 15.

This is despite the company topping both earnings and revenue estimates for the third quarter in earnings released November 2.

The company is focusing heavily on its pay-per-call services.

Here’s how some other companies tied to the domain name industry have done during the same period:

Tucows (TCX) is up 6% to $.75
Demand Media (DMD) is down 24% to $6.99
Web.com (WWWW), which recently closes its acquisition of Network Solutions, is virtually unchanged at $10.57.

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