Domain business shrinks 18% as affiliate business grows: Sedo’s earnings

Sedo’s domain parking business continues to drag on overall firm. Sales of domains are down, too.

Sedo Holding released its Annual Note yesterday (pdf), and the numbers for the domain name business are fairly dismal.

Sedo Holding has two parts: domain marketing (Sedo) and affiliate marketing (affilinet).

First, the good news: Affilinet saw its revenue grow 17.7% year-over-year.

Now, the bad news: The bad news: Sales at Sedo in 2012 droped 17.9%.

Revenue from the domain marketing business totaled € 31.7 million in 2012 compared to € 38.6 million in 2011.

The decline in revenue can be attributed to the firm’s domain parking business, which saw the number of parked domains on its platform fall from 4.4 million at the end of 2011 to 3.8 million at the end of last year.

The good news — at least for Sedo — is that the domain trading segment (i.e. name selling) saw slight sales revenue growth. The bad news for the overall domain market is that the revenue growth was due solely to higher commissions. Sedo’s domain sales actually dropped from $84.4M in 2011 to $68.2M in 2012.

In its annual note, Sedo states it sees the trend toward weaker results in the domain marketing business continuing in 2013. It is taking a number of steps, counting “adjusting our existing structures”, to continue to run the business profitably.

Sedo’s market cap was cut in half in 2012, ending the year at € 41.7 million.