S-1 Discloses Details of NameJet Deals with Tucows, Others — Demand Media
IPO filing discloses financial deals for expired domain names.
Demand Media’s S-1 filing last Friday revealed a bit regarding the firm’s expired domain deals, although it doesn’t refer to its partners directly by name. NameJet has deals with Network Solutions (with whom it co-owns NameJet) and Tucows. It probably has deals with other firms as well.
Here’s one of the statements (dollars are in thousands):
On February 9, 2009, the Firm entered into an agreement with an unrelated party to purchase $1,000 of website names and to manage certain expired website names owned and operated by the client in exchange for a revenue share (the “Domain Name Asset Purchase Agreement”). The Domain Name Asset Purchase Agreement expires in August 2010 and is renewable upon mutual agreement for an additional twelve-month period. In conjunction with the Domain Asset Purchase Agreement and beginning in June 2009, the Firm also committed to purchase at least $300 of expired website names every sixty-day period or a total of $1,800 over the thirty-month contractual period. The contract can be terminated by either the Firm or the counter party within 30 days prior to the end of each annual renewal period. The aggregate value of expired website names purchased by the Firm from inception through December 31, 2009 and during the six-month period ended June 30, 2010 was $1,184 and $622 (unaudited).
This “unrelated party” is Tucows. On February 9, 2009, Tucows disclosed an expired domain deal with NameJet. On February 20, 2010 Tucows noted a bulk sale of regarding 2,500 domain names for $1M and entered into an agreement to sell up to $1.8 million over the next 18 months.
The S-1 also refers to another agreement:
On February 14, 2008, the Firm entered into a three-year contract with an existing client to manage certain expired website names owned and operated by the client, as amended (the “Amended Domain Agreement”). Under the Amended Domain Agreement: (i) the Firm manages its client’s revenues and sales of its website names in exchange for a revenue share; (ii) the Firm committed to provide the client with a minimum of $1,750 of revenues per year (the “Annual Guarantee”) for a total of $5,250 over the three year contractual period and (iii) in the event annual revenues generated under the Amended Domain Agreement are less than the Annual Guarantee (as defined), the Firm is able to satisfy the difference through the purchase of the client’s then existing website names (as defined). The Amended Domain Agreement can be terminated without penalty by either the Firm or the client within 60 days prior to the end of each annual renewal period.
Gross revenues generated through the sale and management of the client’s website names revenues was $332 and $349 during the years ended December 31, 2008 and 2009, respectively. The remaining Annual Guarantee for the years ended December 31, 2008 and 2009 was satisfied through the purchase of website names for the Firm’s own use in April 2009 and March 2010, respectively.
This second one is a bit more perplexing. NameJet was formed with a deal with Network Solutions back in 2007. But this doesn’t sound like a deal with Network Solutions. Any thoughts?
