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The current board structure of Dark Blue Sea has survived the extraordinary general meeting called by the Photon Group. Photon Group put up three resolutions, each of which failed to be passed by shareholders. The three failed resolutions were:
Resolution 1 – that Vernon Wills be and is removed as a director of the Company.
Resolution 2 – that Matthew Bailey (from Photon) be and is appointed as a director of the Company.
Resolution 3 – that Mark Dalgleish (from Photon) be and is appointed as a director of the Company.
 For each resolution 25.5m voted for the resolution and 38.3m voted against the resolutions. What’s clear from this result is that Photon wasn’t able to secure the additional 17% of votes from MMC that was potentially up for grabs.
As a minor shareholder I’m pretty happy with the outcome. What I mean by this is that the EGM must have distracted the current board and management enormously from the business of setting a fresh direction. Now that it’s over I’m sure that DBS will once again begin moving forward.
If ever there was a baptism of fire for Greg Platz, the new CEO, this would have to rank as one of the worst. I’m sure that he will have caught up on a lot of sleep this past weekend and I imagine that he’s sighing with relief that he doesn’t have to deal with an antagonistic board.
In a previous article I’d bemoaned the fact that nobody in the domain industry actually new Greg and I also stated that I wouldn’t envy his travelling over the next twelve months in order to stamp his mark as the figurehead of DBS. Since then I’ve had a chance to have a chat with him at ICANN in Sydney and viewed his performance through this latest tumultuous period.
 Although I still don’t envy his job I would say that he comes across as a “stand-up” guy that has real substance to him that’s come from the world of hard knocks of being the CFO of a public company. The challenge will be to re-energise a bloodied and bruised DBS as it shakes off the restraints of hostile shareholders calling EGMs etc. Personally, I think that he can do it.
One of the interesting features of DBS is the fact that it’s the only publicly listed domain company in the world. Although Sedo’s parent is publicly listed it’s very difficult to dig into the numbers for Sedo as an individual entity.....trust me, I’ve tried!
Why is DBS’s public status interesting? What’s interesting about DBS is that its’ performance is very indicative of the performance of the whole domain industry. Notice that I said performance not share price. The share price may fluctuate all over the place due to a wide variety of reasons but the performance really deals with how much money are they making with what they have to make it with. The slide in earnings reported by DBS from domain parking is not atypical of what is happening in many of the parking companies....it's just a lot more public with DBS. Over the last twelve months many of these companies have had to suddenly deal with a decline of 50% or even more to their revenue line.....this can be really tough to deal with and still maintain a functioning entity.
When I look at DBS over the last few months as well as dealing with corporate machinations they’ve made a lot of really hard decisions to drive down the costs in the business and swing around profitability. Although the termination of the Godaddy deal is a bit of a spanner in the works I wouldn’t be surprised if it becomes a blessing in disguise as Godaddy no longer has a “potential” equity stake in the company.
So where is the sizzle in DBS going to come from that’s going to get the market interested in the shares once again? Let’s face it, parking revenues are likely to remain flat, the Domain Distribution Network (DDN) has suffered a blow with Godaddy dropping out and other direct domain related revenues are likely to remain static.
My guess is that DBS is going to take another look at developing select domains. My recent experience with downwind.com.au has shown that if you pick the right domain in the right market you can end up generating a good return on your investment. The challenge is picking the right one and driving down the costs of development. With many of the free content management system platforms out there development costs of plummeted so the next challenge is how to generate cost effective content. Given this I would like to do a bit of crystal ball gazing and predict a restructuring of resources along content related lines at DBS over the next six months.
Now that the EGM is over I’d like to wish Greg and the board of DBS every success as they chart a course for the company through what could only be described as trying times. I wouldn’t be surprised if in twelve months time there will be a very different looking DBS with all the strength that a truly multi-faceted diverse revenue stream can bring.
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Thanks for this report. It's a good sign, and I hope for great things for DBS and Fab.
By the way, you can add my blog, Successclick.com, to your "fan" sidebar!
cheers bro!
Stephen Douglas
(the Varangian Jarl)