Media sees its domain name business — How Demand

Domain business positioned as end-to-end domain provider, spin-out on track.

Demand Media just concluded its first quarter earnings conference call, and much of the talk centered on fresh TLDs.

The firm is working to spin out its domain name business into a separate business and expects that to happen by the end of the year or in early 2014.

CEO Richard Rosenblatt explained that the firm wants to be an end-to-end provider of domain services. The group will continue to own its own portfolio of domains, hold an expansive distribution network, and provide services to buy, sell, and monetize domains.

Demand Media applied for 26 top level domains and has rights to up to 107 more domains that were applied for by Donuts. The firm thinks its first fresh TLD may come online as early as Q4 of this year based on ICANN’s current timeline.

Rosenblatt stated he likes the registry model since it’s higher margin than selling domains as a registrar.

When prompted by an analyst, he stated the firm ought to reap the benefits of slotting fees when more TLDs start competing with each other. Slotting fees, sometimes part of marketing programs, are fees domain registries pay to show up higher in domain check results. Demand Media may also determine it is better served to slot its own domains higher and forgo some slotting fees.

The firm stated that 40% of its revenue in the first quarter came from Google. It will be interesting to see how that is split out following the domain business becomes a separate entity.