Tucows

Tucows Inc.
Type of site
 Public
Traded as
Founded Flint, Michigan (1993)
Headquarters Toronto, Ontario
Key people Elliot Noss (President and CEO)
Stanley Stern (Chairman)
Industry Internet services
Mobile telecommunications
Products OpenSRS
Ting
Hover
Revenue $80.9 million USD (2009)[1]
Net income $12.2 million USD (2009)[1]
Employees ~175 (2012)[2]
Website tucows.com
Alexa rank Negative increase 25,121 (August 2015)[3]

Tucows Inc. is a publicly traded Internet services and telecommunications company, headquartered in Toronto, Ontario, Canada. It is one of the largest domain registrars and operates Hover, and OpenSRS, a platform for domain resellers. In 2012, Tucows launched Ting, a wireless service provider, and continues to operate its namesake directory of shareware and freeware software downloads.

The company was formed in Flint, Michigan, in 1993. The Tucows logo is two cow heads, a play on the homophone "two cows".

Company history

Tucows' headquarters in Toronto

Scott Swedorski started Tucows in 1993 to provide users with downloads of both freeware and trial versions of shareware. The name originally was an acronym for "The Ultimate Collection Of Winsock Software".[4] Internet Direct, owned and operated by John Nemanic, Bill Campbell, and Colin Campbell, acquired Tucows in 1996.[4] STI Ventures acquired Tucows in 1999.[4]

The company employed roughly 30 employees in Flint, Michigan, in 1998 with additional employees in Canada. Scott Swedorski personally oversaw day-to-day activity in the Flint office located in the White House building on Beecher Road in Flint for several years.

In 2000, Tucows acquired Linux Weekly News.[5]

In 2001, Tucows became a wholly owned subsidiary of Infonautics, and after acquiring Tucows, Infonautics changed its name to Tucows,[6] a business tactic called a "reverse takeover". On August 26, 2002, Tucows sold eLibrary and Encyclopedia.com, its search and reference services properties acquired during its merger with Infonautics, to Alacritude.[6]

In 2004, Tucows acquired Boardtown Corporation, a billing software provider.

On August 19, 2005 Tucows went public[7] on the Toronto Stock Exchange and the American Stock Exchange.

In January 2006, Tucows completed its acquisition of certain assets of Critical Path, an outsourced email services provider.

In June 2006 Tucows paid $18 million to purchase Mailbank.com Inc, a company that owns over 17,000 domain names for common surnames like smith.net or brown.org. Mailbank generates income from selling advertising on the websites of the name-based domains and also from customers who want e-mail accounts with their surname as the domain.

On June 15, 2006, Noss disclosed that the portfolio of NetIdentity's surnames acquired by Tucows represents at least 68% of surnames in the United States and Europe, and that the cost of the acquisition was $18 million.[8] On February 19, 2008 Tucows announced that they were launching a "Personal Names Service" using their portfolio of 39,000 surname domain names.[9] "The launch of the Personal Names Service marks the complete integration of the surname assets we acquired with NetIdentity into our wholesale channel", said Elliot Noss, President and CEO of Tucows.[9]

On August 26, 2006, Tucows won an eBay auction for the web calendar site Kiko.com. The company planned on rolling Kiko's features into their existing email platform.[10]

On July 27, 2007, Tucows acquired ItsYourDomain.com (IYD), another privately held ICANN-accredited wholesale registrar offering domain services through a network of over 2,500 affiliates with over 700,000 domains under management, paying US$10.35 million.[11] ItsYourDomain.com managed 699,951 domains compared to Tucows's 5,919,987, at the time of the sale in July 2007 ItsYourDomain.com's monthly growth of 29,181 exceeded Tucows growth of 21,126.[12]

By June 2008, Tucows had a total of three domain name registration services called ItsYourDomain (IYD), NetIdentity, and DomainDirect. Tucows decided to discontinue these three services, and merge them into one new domain name registration service, called Hover. Hover is a simple domain registration service powered by Tucows Inc, that started in July 2008. All IYD, DomainDirect, and NetIdentity customers are forwarded to Hover.com to resume their domain needs.[13]

On November 6, 2008, Tucows announced that they were launching Butterscotch.com, an online video network that with video tutorials to explain Internet technology and that the site was beginning with 35 video tutorials with plans to reach 500 clips by Spring 2009.[14] On October 14, 2011, Butterscotch.com producer Sean Carruthers stated production was shut down.[15]

In December 2014, Tucows launched RealNames offering e-mail service using surname domains obtained with acquiry of Mailbank.com Inc.

Business lines

Tucows is the third largest ICANN-accredited registrar in the world and the largest publicly traded registrar.[12]

In July 2008, Tucows rebranded its wholesale services as "Open SRS".[16]

Domain portfolio management

Tucows has three sources of income from its domain portfolio: 1) Advertising from pages of domains within their domain name portfolio;[17] 2) Sales of domains from their portfolio, which is constantly being replenished;[18] 3) Auction of the steady stream of thousands of domain names that expire every day and become available for resale.[19]

In November 14, 2007, Tucows disclosed that they offer pay-per-click advertising on the pages of domains within their domain name portfolio.[17] When a user types one of these domain names into the address of the browser (direct navigation), they are presented with dynamically generated links which are pay-per-click advertising.[17] Every time a user clicks on one of the links listed on a web page, it generates revenue for Tucows through its partnership with third parties who provide syndicated pay-per-click results.[17]

On February 7, 2008, Tucows disclosed that it had switched from Google Ads to a new advertising partner in 2007, which led to a one-third increase in its revenue.[20]

On May 7, 2008, Tucows announced it put a process in place for the regular sale of direct navigation names.[21] These domain names would come from names that expire each month from customers who decide they no longer want the domain names and that Tucows is able to select the ones they want to keep from these domain names.[22]

Tucows announced on June 12, 2008, that they have reached an agreement with Afternic to auction Tucows’ large daily inventory of expired domain names.[19] "We have over eight million domains under management and thousands expiring every day, so this deal provides us with a great way to share revenue with our resellers while participating in Afternic’s popular secondary domain name marketplace”, said Bill Sweetman, General Manager of Tucows Domain Portfolio.[19] Tucows will share 10% of the gross sale price with the reseller for the sale of expired domains that were originally registered through the reseller.[23] Revenue will be shared automatically without the reseller having to take any additional action.[23] Tucows chose Afternic as a partner even though SnapNames with Register.com and NameJet with NetSol/eNom are the dominant players in expired domains.[24]

On October 29, 2008, Tucows announced that it would begin direct sales from their inventory of premium domain names under the brand name of Yummy Names.[25] The service was created especially for marketers to obtain a high-quality domain name from Tucows inventory.[25] Customers have the option of purchasing a premium domain name outright or leasing the name.[25] In 2009 one of Tucows' subsidiaries, Buydomains Holdings, sold another premium domain name for a record $50,000 for Myhomepage.com.[26]

On February 20, 2008, Tucows announced a portfolio of over 1,000 "gems", or domain names that have the high potential value such as "Jewellers.com", "Actresses.com", "BasketballPlayers.com", and "ProjectManagers.com".[27]

In February 2008, Tucows successfully defended against an arbitration proceeding over Batchelor.com, which it had acquired as part of its NetIdentity purchase. The complaint had been filed by Ken Batchelor Cadillac Company, a car dealership. A National Arbitration Forum panel determined that the dealership had not established rights in the mark "Batchelor". In fact, Tucows has won all surname-related arbitration proceedings.[28]

In 2007, Weidner Investment Services filed a complaint claiming that Weidner was its trademark or service mark and asked the National Arbitration Forum to order the transfer of Weidner.com from Tucows to Weidner.[29] Tucows failed to respond, and the National Arbitration Forum ordered Tucows to transfer Weidner.com to Weidner Investment Services.[29]

Email services

Tucows provides millions of email boxes through their network of over 9,000 service providers.[30] Customers of Tucows fully hosted email service are provided with POP3, IMAP, WAP and webmail access.[30] Providers using Tucows Email Service have the option of using Tucows' spam and virus filtering with their current email infrastructure.[30]

As part of the NetIdentity acquisition, Tucows had problems migrating retail customers' email from a third-party provider to Tucows in-house mail systems in September 2006.[31]

Starting August 12, 2008, Tucows Email Service running on their servers designated as Cluster A experienced a multi-day outage lasting until August 15, 2008.[32][33] On October 6, 2008, Cluster A again suffered another multi-day outage affecting at least 50% of users and at times all users.[34] As of the afternoon of October 9, 2008, this cluster was still partially down ("degraded") preventing an unknown number of users from being able to retrieve email.[35]

Retail services

Tucows sells services to consumers and small businesses and offers personalized email through net identity.[20] Tucows also offers customers hosting and other services with NetIdentity. Tucows also expected to receive income for pay per click advertising revenue from domain parking the surnames.[8]

Mobile phone services

In February 2012, Tucows launched a new mobile phone business called Ting, which resells voice and data services on Sprint and T-Mobile networks.[36]

De-emphasis and divestment of business lines

De-emphasis of software downloads

Tucows maintains a download archive that includes more than 30,000 software titles in its worldwide network of partner sites. Although some listing features now have fees, basic listing remains free. Tucows founder Scott Swedorski announced his resignation in November 2003.[4] On March 10, 2006, Tucows Content division closed its satellite office located in Flint, Michigan, and relocated the remaining editorial functions to its corporate head office in Toronto. On February 7, 2008, Tucows disclosed that Tucows plans to de-emphasize the software download aspect of their business.[20]

Divestment of web hosting accounts

On May 6, 2008, Tucows announced that they are getting out of the web hosting business.[37] As part of the divestment Tucows signed an agreement for Hostopia to purchase about 14,000 Domain Direct, NetIdentity and ItsYourDomain.com (IYD) customer web hosting accounts and would migrate the web hosting accounts to Hostopia's unified web service platform by July 2008.[37]

Divestment of equity interest in Afilias

On November 5, 2008, Tucows announced that it was selling its entire 7.38% equity interest in Afilias for $7.4 million.[38] Afilias is the registry operator of the .info and .aero TLDs, and the service provider of the .org generic top-level domain (gTLD), .mobi mobile phone TLD, and a provider of domain name registry services for several countries around the world, including .AG (Antigua and Barbuda), .BZ (Belize), .GI (Gibraltar), .HN (Honduras), .IN (India), .ME (Montenegro), .SC (the Seychelles), and .VC (St. Vincent and the Grenadines).[39]

Reputation

Domain name add grace period (AGP) abuse

On January 8, 2008, Tucows explained its values and position on domain name front running: "We work to uphold the rights of Registrants. That means, for example, not putting 60-day locks on domains when a Registrant makes a change to their WHOIS information effectively locking some into a renewal and blocking domain name transfers to other Registrars. That also means having a clear, defined policy surrounding expiry and redemption periods."[40] Tucows addresses domain tasting "by charging our Resellers a monetary fee on domain name registrations that are cancelled within the five-day Add Grace Period (AGP)", but it "doesn’t use WHOIS query data or search data from our API to front-run domain names".[40]

Although it supports ICANN’s fee to discourage domain tasting and Google's decision to drop names added and deleted during the AGP from its AdSense program, Tucows claimed that AGP abuse could be further curbed by shortening the AGP period to 12 hours or less, sufficient time for registrants to correct spelling mistakes—AGP's original purpose.[41]

Registrar of illegal domain names

In late 2014 or early 2015, Tucows was notified of registering a domain name which is illegally selling unapproved drugs, according to Japan health authorities, and requested suspension of the domain name. To date the domain names with Tucows are still operating illegally.[42] Tucows has operated similar domain names for years.[43]

In 2015, the U.S. Trade Representative included Tucows on its annual "notorious markets" list—the first time it has named a domain name registrar—in order to set an example for what happens to registrars that do not block or suspend sites that sell illegal goods.[44] Tucows responded that it suspended dozens of sites every day, but that "unlike some competitors, it considered all complaints carefully to ensure they were justified".[45]

See also

References

  1. 1 2 Edgar Online Financials. "TUCOWS INC /PA/ Financials" Jan 17, 2011.
  2. ↑ "Form 10K SEC Filing".
  3. ↑ "tucows.com Site Overview". Alexa Internet. Retrieved 2015-08-10.
  4. 1 2 3 4 Al Harberg, DP Director. "Tucows' founder and president Scott Swedorski announced earlier this week that he has resigned from Tucows", November 30, 2003.
  5. ↑ "LWN.net Weekly Edition for January 17, 2008". Retrieved 2008-01-24.
  6. 1 2 Paula J. Hane, "Tucows Sells Two Former Infonautics Services", Information Today, August 26, 2002.
  7. ↑ "Tucows Completes Public Offering | Tucows Inc.". www.tucows.com. Retrieved 2016-04-19.
  8. 1 2 "Tucows Podcast on Its NetIdentity Acquisition - Transcript", Seeking Alpha, June 15, 2006.
  9. 1 2 "Tucows Launches Personal Names Service", Tucows Press Release, February 19, 2008.
  10. ↑ "Why We Bought Kiko.com". Archived from the original on October 27, 2007. Retrieved 2006-09-05.
  11. ↑ Jay Westerdal, "ItsYourDomain acquired by Tucows", Domain Tools, July 30, 2007
  12. 1 2 Registat. "Domain Names under Management" July, 2007.
  13. ↑ Say Hello to Hover
  14. ↑ "Tucows Sweetens Technology Learning with Butterscotch.com", Canadian PR Newswire, November 6, 2008.
  15. ↑ Twitter-Sean Carruthers. Butterscotch shut-down
  16. ↑ "Re-introducing OpenSRS", Open SRS Reseller Blog, July 28, 2008.
  17. 1 2 3 4 SEC Filings for TCX. "Form 10-Q for TUCOWS INC /PA/", November 14, 2007.
  18. ↑ "Tucows Sells 2,500 Domain Names", PRNewswire-FirstCall, June 19, 2007.
  19. 1 2 3 "Tucows Collaborates With Namemedia’s Afternic.Com To Auction Daily Inventory Of Expired Domain Names", Tucows Press Release, June 12, 2008.
  20. 1 2 3 "Tucows Inc. Q4 2007 Earnings Call Transcript", Seeking Alpha, February 7, 2008.
  21. ↑ "Tucows Inc. Q1 2008 Earnings Call Transcript", Seeking Alpha, May 7, 2008.
  22. ↑ "RBC Capital Markets Growth Conference", Tucows Presentation, October 27, 2008.
  23. 1 2 "Tucows and Afternic.com Team Up for Expired Domain Auction", Tucows Corporate blog, June 12, 2008.
  24. ↑ "Tucows and Afternic Deal Q&A", Domain Name Wire, June 12, 2008.
  25. 1 2 3 Tucows Press Release. "Tucows Opens Hidden Treasure Chest of Premium Domains with YummyNames" October 29, 2008.
  26. ↑ http://domainnamewire.com/2009/05/19/myhomepagecom-sells-for-50000/
  27. ↑ "Tucows Reveals Key Domain Name Portfolio Assets", Tucows Press Release, February 20, 2008.
  28. ↑ Domain Name Wire. "Tucows Fights off Car Dealership" February 28, 2008.
  29. 1 2 "Weidner Investment Services, Inc. v. Tucows.com Co." Claim Number: FA0709001080246, National Arbitration Forum, November 7, 2007.
  30. 1 2 3 "Tucows Announces Enhancement to the Tucows Email Service", Tucows Press Release, January 31, 2008.
  31. ↑ Joel Shore, "System migration may be the most dangerous thing you ever do", IT World, September 26, 2006.
  32. ↑ "OpenSRS Blog - Update on Cluster A Email Service Issues, August 13, 2008".
  33. ↑ "OpenSRS Blog - Closing Notes on the Cluster A Email Service Interruption, August 18, 2008".
  34. ↑ "OpenSRS Blog - Cluster A Email Service Issues".
  35. ↑ "Video of Rick Yazwinksi explaining Email issues".
  36. ↑ "Tucows Launches Ting – A New US Mobile Phone Service". Tucows. February 2, 2012.
  37. 1 2 "Hostopia to acquire certain shared hosting customer assets of Tucows Retail Service Group", Tucows Press Release, May 6, 2008.
  38. ↑ Tucows Press Release. "Tucows Sells Equity Interest in Afilias for $7.4 million" November 5, 2008.
  39. ↑ "Afilias - Global Registry Services"
  40. 1 2 James Koole, "Registrar Reputation and Trust", January 8, 2008.
  41. ↑ Adam Eisner, "ICANN Proposed Tasting Fee a Good First Step", Tucows Blog, January 30, 2008.
  42. ↑ John Horton (January 18, 2015). "My Twitter Spat With a Russian Rogue Internet Pharmacy Operator". LegitScript.
  43. ↑ "Rogues and Registrars: Top 10 List". LegitScript. November 2012.
  44. ↑ "2014 Out-of-Cycle Review of Notorious Markets" (pdf). ustr.gov. 5 March 2015.
  45. ↑ Krista Hughes (March 5, 2015). "U.S. says inaction on online piracy risks public safety". Reuters.
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