Domain Parking May Have Hit Bottom: Tucows

Tucows’ states domain parking revenue is down, but it may be on the rebound.

Tucows, a wholesale domain registrar and owner of 150,000 domains, saw its revenue from domain parking drop 12% in just one quarter, but CEO Elliot Noss states it may have hit bottom.

“In terms of where’s the bottom, we’ve started to see a little bit of a pickup now so we may have hit the bottom,” stated Noss on an earnings conference call Tuesday evening.

Tucows direct navigation revenue is actually up 40% compared to last year, but that may be due to changes in its portfolio. The firm thinks it will ultimately come out ahead now that the parking channel is being cleaned up by both Yahoo and Google.

“There’s another point here that I think is notable is which is its not just that they’ve—that Google and Yahoo have pushed back on the payouts, they have also started to get more aggressive with some of the greyer parts of the market and long-term that affects us positively since we’ve got a very clean book of business,” he stated. “The more sort of bad traffic and bad clicks that are pushed out of the system, the better it is for us in the long-term.”

Domain parking aside, Tucows numbers weren’t spectacular. It’s been an ugly couple years for investors in Tucows stock. The stock has traded as high as $1.09 during the last 52 weeks, but closed yesterday at just $.54 a share. That was ahead of the firm disclosed earnings following the bell yesterday. The stock has rebounded slightly this morning.

Revenue was down for the quarter compared to the same time last year, although the firm’s revenue from last year included a $3 million domain portfolio sale. This past quarter it sold a $1 million domain portfolio of 3,700 domains, so there was a net $2 million bogey.

What can Tucows do to turn the ship around and make shareholders like Mark Cuban happy (Cuban owns 8.3% of the firm)? The firm states it’s been investing over the past year to right the ship. It is launching its fresh Hover.com brand later this year (the beta just went live), which will be a fresh approach to serving retail clients with e-mail addresses, domains, etc.

I have an idea that may help. Ask the Board of Directors to actually show up to the shareholders’ meeting next month. Last year everyone phoned it in except for Noss.