MMX annual shareholder letter gives a great overview of fresh TLD business
Deep insight into the past and present of the fresh TLD business.
Minds + Machines Group Limited, aka MMX, released its final results for 2016 today. I found the shareholder letter particularly interesting.
MMX’s current management is not the group that founded the firm. A lot has happened with fresh top level domain names (expectations vs. reality) since the firm was founded, and the fresh management has restructured the firm and its strategy. Therefore, the shareholder letter freely discusses the missteps the firm made and what it is doing now to recover from them.
MMX started with a grand strategy of owning the domain name experience from end to end; playing the technical registry role, the business registry role, registrar, and even domainer.
Some of the losses from these businesses have been quite sizable, such as the registrar effort. The firm also entered into a contract for one fresh TLD early on that it has had to pay millions of dollars to restructure.
The firm has now shifted to a pure-play registry business.
The shareholder letter explains what it sees as workable fresh TLD model: extra cashflow when a fresh TLD launches, and then a focus on a sustainable business driven by renewals. TLDs are a subscription business, following all.
Of note, one of the three targets for the firm is domainers. This was not the case with the previous management, which wanted to capture all of the upside from good domain names. I like how the letter describes this group:
“Domain investors who serve both as early pioneers, as well as marketeers, of fresh extensions.”
The firm has changed its premium domain pricing so that domains renew at standard prices.
The rubber is hitting the road in the fresh top level domain name business. Firms are adjusting to the reality of the business, and I think MMX’s shareholder letter is a good summary of what has worked and what hasn’t.
