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Rightside - What are you doing?

Due to being a publicly listed company, Rightside, is a really interesting case study of the entire domain industry and in particular the new gTLD space. The company has accumulated enough domains that it is a good representative sample of the domain space.

So back in November last year I conducted an analysis of Rightside wrote an article (click here) that predicted there would be layoffs. I stated:

Eventually, the investors will come in and hack the expense line to pieces (ie. fire lots of people) to get the profits up since their returns are unlikely to come from capital growth.

I really didn’t want to be a prophet of gloom and doom but several days ago Rightside downsized by 6%. I am deeply sorry to those people that lost their jobs….it’s never a fun experience to suddenly find yourself without a pay check.

Escrow.com

It’s clear that Rightside needed to get their costs under control and generate some profit for the investors. Sadly, I wouldn’t be surprised if there was another round of layoffs towards the middle of the year. The reason why I believe this is that fundamentally nothing has changed with the business.

The registry business is still a very small part of the overall revenue. nTLDstats shows that the new gTLD space is essentially following a linear line to the right and not exhibiting any sort of geometric growth. In fact, it could be argued that the Rightside registry has slowed down growth over the last few days…..but the data around this is inconclusive as yet.

It was originally hoped that the registry was where the company was going to get all of its sizzle from with the market. To get a good exit for some of the early investors Rightside really needed to move into playing the capital value game versus the incremental profit model to provide some sort of investor return.

The staff reduction is clearly an attempt for the management team to buy time for the cumulative effect of the registry business to ultimately have an impact on the bottom line. Such a move would have meant the board (which has a number of investors) is now resigned to play the long-term game prior to exiting their positions. This must of been quite disheartening.....

As I said in my previous post,Rightside needs some new technology that will rapidly scale. This means that any idea that involves either a long corporate sales cycle or a change in consumer mentality is out. The management team doesn’t have the time for the first nor the resources to tackle the second option.

I have a few ideas on how to do really scale but they would require a recognition that the current strategy is not delivering the results that are really required for big returns. Don’t get me wrong, in the long-term, Rightside will produce some great results….the challenge is whether the market will allow the company the time to continue moving forward in the same manner.

I should say that I do not own any shares in Rightside and would recommend that you seek professional advice prior to investing in any company.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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nameopps
This is sobering, Michael, since Rightside are in my neck of the woods (no more layoffs). Your analysis lays bare the guts being s... Read More
28 January 2016
mgilmour
I agree with you completely.....the acceptance of the new gTLDs by general users has been grossly underestimated by the majority o... Read More
28 January 2016
Guest — Dietmar Stefitz
Instead of laying off people, I think they should start with Marketing efforts.
28 January 2016
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NamesCon and Presentations

I’m finally over my jetlag from attending NamesCon in Vegas and back sitting at my desk. If I was to summarise the conference in a single word it would have to be WOW! It was an incredible event that really started on the Sunday and went right through to the early hours of Thursday morning.

Escrow.com

I had the privilege of speaking at two sessions, Domain Monetisation 101 and Domain Monetisation Masterclasss. It was standing room only during the sessions and I had a great time sharing some of my own experiences in the domaining industry as well as breaking down exactly what it means to monetise traffic.

As promised to the attendees please find the presentations that I went through below.

Monetisation 101 Monetisation Masterclass
Monetisation 101 Monetisation MasterClass

We had five team members from ParkLogic and on the Sunday we had a chance to meet a lot of new faces at our table. During this time, we also demonstrated ParkLogic Next….which is really on the cusp of being released. A presentation on some of the many features of ParkLogic Next is below.

ParkLogic Next

So why was NamesCon so good? For me it was all about the business and the many, many meetings that I was involved in. There was so much energy and excitement about the domain industry at the conference. The exhibit hall was packed, sessions were packed and the organisation just seemed to flow.

One of the great things about NamesCon is that it’s really kicked off 2016 in a major way. There are just so many opportunities from the many conversations that are a direct result of the conference. Not surprisingly, many of the best conversations were in the small hours of the morning at a bar or a restaurant.

Finally, I would congratulate the whole NamesCon team that made it so easy for presenters, sponsors and attendees. Richard Lau, Jothan Frakes and all of the many people that were involved did an exceptional job….well done! Now I just need to organise my early bird ticket to NamesCon 2017!

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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Arrived at NamesCon

After around 24 hours of traveling I've finally reached Vegas for NamesCon! If anyone is around then ping me on skype, facebook or here on whizzbangsblog. I'll be the guy trying to stay awake and get into the Pacific time zone.

On the flight over I fine tuned my two presentations on Monetisation (on Sunday and Wednesday) and I must admit that they've really come together nicely with heaps of illustrations, case studies and data on monetisation. I think that anyone attending the sessions will go away with a lot of great information to help them with their portfolio.

Escrow.com

We have a large team from ParkLogic here which is really great but the bad news is that it looks like our banner for the table on Sunday didn't make a flight.....sigh.....just got to love Qantas. We'll be the table that is handing out little miniature koalas that you can clip to your lanyard and then give to your kids when you get home.

So make sure you make a beeline for our table on the Sunday to pick up your koala and get a demonstration of the ParkLogic Next platform. I think that you're going to love it!

I'd better get going for my walk so that both Roselyn and I can enjoy the conference and not sleep through it. See you at NamesCon!

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

 

 

 

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Heading Back From Vacation

I'm sitting here at the airport in Queenstown, New Zealand after a great weeks vacation in a magnificent part of the world. Almost as a parting gesture I couldn't help noticing that one of the the networks available at the airport was called "whizbang". Shame about dropping a "z" but it made me feel right at home.

Escrow.com

After the past week I feel energised and looking forward to the new year! This is going to start with heading to Vegas tomorrow for NamesCon where I've heard that over 1200 people will be in attendance. Seriously, if you aren't attending you will be really missing out.

As well as having around 30 scheduled meetings I will be speaking on Domain Monetisation for two sessions, an intro and also a masterclasss. I spent the week before Christmas researching some great case studies to illustrate the points in the sessions....it should be a lot of fun! If you are interested in monetising your domain traffic then make sure that you signup for the sessions online at the NamesCon website as they are filling up fast.

I'm also going to be doing a Q&A on Sunday where people can ask any question they would like about how to best monetise and manage their domains. I'll do my best to answer all the questions and help out as many people as possible.

ParkLogic has a table on the Sunday where we will be providing a new installment of a sneak preview of our new Next platform. We'll also have five of us at the conference....so make sure that you grab any of us if you have any questions about how we can help you with your portfolio.

One of the great things about this trip is that I'll have my wife, Rosely, with me. I know that everyone will make her feel more than welcome and I know that she's really looking forward to meeting everyone.

Anyway.....my flight is being called so I'd better get going now. Cheers!

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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My Predictions For 2016

At the end of each year I like to reflect on the past twelve months and then try to make some predictions for the coming year. In a nutshell, I believe that 2016 will see an incredible amount of change in the domain industry. Here’s a few predictions for you…

Shanghai Index

The current Chinese powered boom will peak by the end of quarter one as the Shanghai index continues its rebound. Chinese investors that were looking at exiting money will return to the more liquid stock market as a source of investment returns. Those domain speculators that have invested in long strings of numbers will find they are left holding their assets.

Escrow.com

In an effort to curb costs domain investors will seek to outsource their domain management to firms that provide such services. The economies of scale derived by such firms will free investors time to concentrate on other investment opportunities.

Downward pressure on earnings will continue to place stress on large portfolio investors as registrations costs increase. This will mean that there will be greater numbers of more marginal domains dropped. Those investors that have scaled will be looking for an exit through either marketplaces that are acquiring domains (eg. Godaddy) or portfolio owners that have managed to extract additional value from traffic.

Consolidation of the new gTLD registry market will begin in earnest as the unprofitable registries seek an exit to recoup some of their investment. Successful registry owners will be in a buyers’ market where they will be able to pick and choose whom they acquire for often massively discounted rates.

Traffic domains will continue to underpin the wealth of the domain industry. Additional revenue streams will be developed off the back of domain traffic that is much broader than just the advertising. Understanding true “user intent” and what it means will open up significant opportunities for domain owners that have aggregated large traffic portfolios.

The traditional domain brokering business model will change as the small number of good brokers come under increasing demand from a larger and larger pool of sellers. As the laws of supply and demand come to bear, sellers will offer inducements to brokers to attract attention to sell their domains.

Late in the year, inroads into new management tools will assist domain developers in scaling the development business model. This problem has been the Achilles heel of the development industry and has limited much of the growth in this direction….so keep an eye out on this space.

Consolidation of registrars, monetisation providers and registries will continue as founders seek to exit and economies of scale come to bear on business models. Innovating businesses will be snapped up as speed will become an important asset in scaling faster than competitors.

Despite Marissa Mayer’s (photo above) best efforts, Yahoo will continue to languish and Google will continue to consolidate its hold on the domain industry. As Google’s grips tightens its grip, more and more alternative advertising sources will become viable for larger numbers of market verticals.

NamesCon will be hugely successful and run simultaneously as Affiliate Summit West will be an event that introduces new blood into the industry. The Domain Conference in September will continue to grow and Dietmar’s decision to move Domaining Europe to the Netherlands will pay dividends. DomainFest Hong Kong will really expand as a premier domain conference off the back of the growing Indian and Chinese markets.

So that’s a few of my predictions for 2016. It will be interesting to see how many of them come to pass…..I know that a number of them are already moving forward. See you all at NamesCon in early January.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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Guest — Hywire
I have been relatively new to the domain market. I strongly believe keywords and valuable English names will hold their value. M... Read More
31 December 2015
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