WebProNews

Tag: gtlds

  • Google Gives An Update On How It Handles New gTLDs

    Google Gives An Update On How It Handles New gTLDs

    Google is letting webmasters know about how it handles new top level domains. The company says that as many new generic TLDs become available, it wants to provide some insight into how they’re handled in Google search as it has seen and heard a lot of misconceptions about the topic.

    The most important thing to note is that Google will generally treat the new gTLDs just like any other gTLDs like .com, .org, etc. Keywords in the TLD do not give it any advantage or disadvantage in search, it says.

    IDN TLDs such as .みんな can be used just like any other TLDs, and Google treats the Punycode version of a hostname as being equivalent to the unencoded version. This means you won’t have to redirect or canonicalize them separately. Google does say to use UTF-8 for the path & query-string in the URL, when using non-ASCII characters.

    Branded TLDs will not be given any more or less weight. Google says they’ll be treated the same as other gTLDs.

    “They will require the same geotargeting settings and configuration, and they won’t have more weight or influence in the way we crawl, index, or rank URLs,” notes Google Webmaster Trends analyst John Mueller.

    Google will treat those that look region-specific (such as .london) the same as any other gTLDs.

    “This is consistent with our handling of regional TLDs like .eu and .asia,” says Mueller. “There may be exceptions at some point down the line, as we see how they’re used in practice. See our help center for more information on multi-regional and multilingual sites, and set geotargeting in Search Console where relevant.”

    Google will still use ccTLDs to help it geotarget websites. It assumes that if the domain utilizes a country’s ccTLD, it’s probably relevant to that country.

    Google has a section in its help center to help webmasters and SEOs move their site from their current domain to a new TLD. If this is something you plan on undertaking, you’ll probably want to take a good look at that.

    Image via Google

  • Significant Marketing Efforts Still Needed For gTLDs

    Significant Marketing Efforts Still Needed For gTLDs

    It appears that the both the domain name industry and businesses opting to use new generic top-level domains (gTLDs) may have a great deal of marketing to do to spread awareness about gTLDs. Most consumers are not familiar with the initiative to get sites using over 1,300 new domain options, and at the same time, they don’t like going to domains they don’t recognize.

    According to the Domain Name Association (DNA), just a quarter of internet users worldwide are aware of efforts to expand the number of domain names. 55% are completely unaware, and 20% are unsure. eMarketer illustrates the data:

    eMarketer, which created the above graph based on the DNA’s findings, says, “The initiative isn’t without controversy. What some view as a ‘blank canvas for innovation’ to spur more creativity, diversity and trust on the internet, others see as costly, exploitative and bound to cause consumer confusion. Nonetheless, it continues to move forward, requiring all internet users to adapt.”

    The lack of awareness may not be as big a problem as the lack of trust about unfamiliar domains, considering that search is the way most people are getting to content.

    The DNA said, “Consumers trust domain names as THE most trustworthy way to navigate the Internet. The majority of consumers say they are most confident in the security of links they have bookmarked or have typed directly into the web browser. Ranked next, consumers most trust search results WHEN THEY RECOGNIZE THE DOMAIN NAME or url. Then further down the list are search results delivering an unknown web address. So people use search slightly more often but click on search results with recognized addresses and trust known or typed-in domain names.”

    It also says that new domain extensions that identify brands or security attributes are likely to increase user trust.

    Discussing a recent survey from NCC Group Trust, the DNA says, “60% of respondents stated that the ‘Websites associated with a known brand or company’ provide an increased sense of security. To me, this says that loans.chase will be seen as clearly more secure than chaseonlineloans.com where Chase can build brand awareness (and where long domain names with brand names embedded are often a source of Phishing attack). Similarly and in a short period of time, onlinepayment.bank and onlinepayment.secure will be able to build awareness as secure places.”

    Again, this just shows how important the marketing of these gTLDs is going to be to businesses who are using them. But even businesses themselves need to be marketed to as well.

    DomainMart CEO Alex Tajirian says, “Success requires cooperation among registries and resellers when it comes to sales and marketing. Impulse buying aside, a product’s sales are driven by the product’s utility, which is why some professionals believe that the main objective of marketing is to create awareness of a product’s utility. If people find the product useful, they will pay the right price. Hence, when businesses don’t register new gTLDs, it can mean one of three things: the businesses aren’t aware of the gTLDs’ existence, they don’t understand the things’ utility/benefits, or the price is too high to be cost-effective.”

    “Instead of targeting every unaware business and trying to change the minds of others regarding the new gTLDs’ utility, I propose a targeted and focused marketing audience,” he writes. “Start by focusing on undecided managers and those who are not aware of the new domains; then expand to a broader audience. One such audience is start-ups. They can be reached with booths at tech conferences, ads on online tech sites, and use of traditional marketing venues in high-tech hubs such as Silicon Valley.”

    Aditya Chauhan, a Business Development Strategist at LogicBoxes, writes at DomainNameWire that increasing awareness is one of the three biggest challenges facing new gTLDs, calling this a “nightmare for registries”.

    “Not only do they have to bear the burden of marketing their product, but also the need to educate customers about nTLDs [new TLDs] as a whole,” she says. “This is something that .CLUB seems to have handled remarkably well on a global scale. By using well known faces to endorse and use their product, .CLUB has spread both awareness and acceptance amongst their target audience. However, there’s still a long way to go to make nTLDs more mainstream.”

    Donuts, which is the largest registry for new gTLDs, recently unveiled what’s being called a “marketing offensive” aimed at “spreading the new gTLD gospel to small businesses in the US,” as Trevor Little at World Trademark Review puts it.

    The good news is that according to Donuts, several studies by search experts have found that the first generation of new gTLD addresses are matching or outperforming legacy gTLDs and ccTLDs in search performance.

    Images via ThinkStock, eMarketer, .CLUB

  • ICANN: Over 175 New gTLDs Delegated So Far

    ICANN announced on Monday at ICANN 49 in Singapore that the number of new gTLDs that have been delegated has surpassed 175.

    The month of March has seen the approval of .NYC, .Cologne, .AXA, .Webcam, .Trade, .Jetzt, .世界 (xn--rhqv96g) – Chinese for “world/shijie,” .DNP, .Ink, .机构 (xn--nqv7f) – Chinese for “agencies/institutions,” .संगठन (xn--i1b6b1a6a2e) – Hindi for “organization/sangathana,” .组织机构 (xn--nqv7fs00ema) – Chinese for “organization,” .орг (xn--c1avg) – Russian for “organization/org,” .Koeln, .Bid, .Okinawa, .Vote, and .Voto.

    They delegated roughly forty of them in February and nearly fifty in January. You can see the full list of those delegated dating back to October 23rd here. Note that the list is not updated in real time.

    “After completing the New gTLD Program, a new gTLD becomes part of the Internet when it is delegated,” ICANN says. “This means it is introduced into the Internet’s authoritative database, known as the Root Zone.”

    ICANN says that over 1,300 of them could become available within the next few years. The delegation process will continue on a rolling basis.

    Image via YouTube

  • This Small Company Is Battling Amazon For The Next .COM

    XYZ.com is bringing the new domain extensions .xyz and .College to the Internet as part of the new gTLD program. It’s also in a battle with Amazon and others to bring .Now to market.

    Do you expect to get any domains with new gTLDs? Anything in particular you’re leaning toward? Let us know in the comments.

    The company consists of a small team of about five people battling against giants like Amazon, Google and Donuts. Co-founder Daniel Negari is the youngest gTLD applicant at 27 years old. The company is prviately funded by its co-founders, and has been going through the application process for a few years.

    The company wants .XYZ to be the next .COM, as opposed to going after niche markets like some of the other players launching new gTLDs. We had a conversation with Negari about where the new gTLDs will take the Internet, and what role XYZ.com aims to play in that.

    “The new TLDs offer Internet users choice when selecting a domain name,” he says. “There are currently over 250 million domain names registered in the world, and almost half of them are .coms. That means it’s nearly impossible for people to register their first, second, or maybe even 5th choice in a domain name, without paying potentially thousands of dollars.”

    “Overall, we will see a lot of success from the new domain extensions because it is a win-win situation, especially for the average website user,” he adds. “The Internet has only existed for 24 years and is still in its infancy. The new extensions are a huge step towards getting more people online and leveraging all of the potential opportunities of being constantly connected to a stream of data, news, and information.”

    Asked about the benefits to a business or webmaster in choosing a .XYZ domain over something else, Negari tells WebProNews, “.xyz is a low-cost, high-volume domain extension for every website, everywhere. Anybody can register the domain name they really want at a competitive price (we expect the base MSRP to be under $9.99).”

    One important consideration in selecting domains for those who want global sites is using characters that are global themselves.

    “.xyz makes sense as a globally adoptable domain extension since X, Y, and Z are recognized as the last three letters of the Latin alphabet,” says Negari. “There is no language barrier, unlike most other extensions, since XYZ serves more as a universal symbol than an English word with a dictionary meaning. It is also three letters like other popular extensions today, like .com, .net, and .org.”

    “With .xyz, users are not limited or labeled by their domain extension,” he says. “As a flexible, ‘true generic’ extension, people can register .xyz domain names for any purpose and receive instant recognition. We have coined the phrase ‘Generation XYZ.’ This is the idea of combining the three major generations (Generations X, Y, and Z) to create a whole new generation inspired by the Internet and its limitless potential. We are introducing .xyz to the world so that people everywhere can sure their passions, cultivate knowledge, and express themselves. We think of .xyz as more than just a domain extension – it is a global community.”

    As Negari points out, a lot of the new extensions coming out are very niche-specific, which makes them less valuable to some types of businesses and websites. Selecting such a domain has a several consequences, he says.

    “First, because these domain extensions are not necessarily meant to be high-volume, they may have a higher price tag than true generic extensions (for example, .pw starts at $20, .pro starts at $26, and .tv starts at $30 on eNom),” he says. “Second, by getting a domain name with a niche extension, users are able [to] easily convey what type of website they are or the industry they are in. But what if they are in multiple markets? Or if there are multiple domain extensions with the same meaning (like .store and .shopping; .car, .cars, .auto, and .autos), people may get confused and visit the wrong site. Although there are obvious benefits in getting a niche extension, not all users want to be boxed in.”

    “Third, because of these natural market limitations, most niche extensions may never see widespread adoption,” he adds. “While a specific extension may be best suited for a certain type of user, it can hurt the brand’s perceived reputation by having a domain name that isn’t immediately recognizable. Eventually, some of these users may choose to switch to something more popular.”

    In addition to .XYZ, XYZ.com is launching the .College TLD, which obviously carries more of a niche connotation – one of education. One might expect this to compete with .EDU.

    “.edu is a very specialized and exclusive domain extension, with only about 7,000 domain names registered,” Negari explains. “Only US accredited universities are able to register .edu domain names. And even they are limited to one .edu domain name per institution. That means universities can’t get individual .edu domain names for their colleges (approximately 18 on average per university), departments, campus programs, and staff. .College addresses this need, in addition to many others.”

    “There are over 30,000 recognized colleges and universities in the world, which means about 23,000 are not able to register their institutions name under the .edu extension,” he says. “.College is a global education-related domain extension meant to create greater consistency in institutional presence online all over the world.”

    “But .College isn’t just for schools,” Negari notes. “It is a 100% and unrestricted domain extension, meaning anyone can register a .College domain name for any purpose. It can be used by an unlimited number of organizations and individuals, including non-traditional education, tutoring services, online education, corporate training, recruitment, test preparation, events, special interest groups, university research parks, startups, and students.”

    For some reason, Hamburger University comes to mind.

    XYZ.com expects a million registrations for .XYZ domains in the TLD’s first year of existence.

    “We have done extensive market research and analysis to determine how we can best position .xyz to succeed and maximize accessibility to all Internet users,” says Negari. “We understand how big the market is, and we have detailed strategies in place to attract individuals and organizations in every major industry.”

    “Ultimately, we believe widespread adoption stems from ensuring affordability, generating early brand awareness, and connecting with the people all over the world who are interested in .xyz,” he says. “We are a small but experienced team playing the underdog role against big players like Amazon, and I think users appreciate our bold, expressive style.”

    The company is marketing the TLD globally, and says it has received a lot of positive feedback from users around the world, but especially in countries with high internet usage and growth. Negari specifically names the US, Germany, China, India, and Canada. XYZ.COM itself is currently available in English, German, and Spanish, with Chinese, and will launch in other languages soon.

    “Our preregistration tracking is in line with the timelines we have in place, and we expect these numbers to continue to increase, especially as we begin to go deeper into our multi-million dollar marketing campaign in the coming months,” Negari tells us. “My team and I have developed numerous longstanding relationships in the domain name industry with a very strong understanding of the market. We have acquired and sold over $100 million in domain names. We have already have registry operating experience after successfully launching .com.de.”

    “ICANN has offered their key support and endorsement of our domain extension. .xyz has everything in place – capital, expertise, support, brand positioning, and dedication – to become a major innovator on the internet as it continues grow at an exponential rate,” he says.

    While XYZ.com is still competing with five other applicants (including Amazon) for the .NOW TLD, it has already created a .Now website and Twitter account in preparation for the acquisition, as the company expects to win the auction.

    “.Now is one of the few three-letter words that has the flexibility to be used across all industries and activities, and is generally a term understood by most people, even if they don’t speak English,” Negari says. “.Now is for companies who are trying to incite customers to action (i.e. buyit.now). But it can also be used for fundraising, events, interest groups, content sharing, or anything else people can think up. It’s can be instantly applicable to just about anything.”

    “It makes sense for a large retailer like Amazon to be attracted to .Now domain names because it can be applied to multiple verticals, like general e-commerce, their new grocery delivery service, music and video downloads, and for their Android app store,” he notes.

    Negari is excited, however, to be able to go head to head with giants at such a young age, and with such a small company.

    What business benefits do you see to new gTLDs? Discuss in the comments.

  • Demand Media Announces Significant Steps For Domain Business

    Demand Media has a few pieces of domain-related news this morning. Its United TLD subsidiary is now officially an ICANN accredited gTLD registry, eNom and Name.com have signed the 2013 ICANN RAA, and the company has joined the Domain Name Association.

    Regarding the first two bits of news, a spokesperson for the company tells WebProNews, “These are significant steps forward in preparing the domain services business for over a thousand new domain name extensions coming to market – starting as early as later this year.”

    “The speculation is over. New gTLDs are coming to market before the year ends and, with these ICANN contracts, Demand Media is ready to go as both a platform through which these names will be available, as well as bringing specific new gTLDs such as .DANCE and .DEMOCRAT to market,” said Taryn Naidu, executive vice president of Domain Services for the company. “We made a commitment to our business partners and customers that we would lead the way in opening up a new form of expression on the web – and we are delivering.”

    New domain extensions will begin to come online in November. Others from United TLD will include .ACTOR, .ARMY, .ENGINEER, .NINJA, .PUB and .SOCIAL.

    Of the RAA (Registrar Accreditation Agreement), Demand Media senior vice president and vice-chair of ICANN’s Registrar Stakeholder Group, Jeff Eckhaus, said, “This process was truly community driven and collectively organized; we worked to ensure that everything we did would better serve the customer – the person or organization registering a domain name. By signing on to the RAA, both eNom and Name.com have proven that they are fully prepared to support new gTLDs as they come to market in the months ahead.”

    As noted, Demand Media has also joined the Domain Name Association (DNA). This is a new nonprofit that launched today to support the growth and development of the domain name industry. Board members include Eckhaus, United TLD’s Statton Hammock, ARI’s Adrian Kinderis (Chair), Google’s Job Lawrence, Donuts’ Jon Nevett, FairWinds Partners’ Elizabeth Sweezey and GoDaddy’s Richard Merdinger.

    Earlier this month, Demand Media announced that longtime CEO Richard Rosenblatt was stepping down, but indicated that its plan to separate the domain business from the media business is still going forward, though the timing was still being evaluated.

    Last week, ICANN introduced the first four new gTLDs.

    Image: Demand Media

  • ICANN Introduces The First Four New gTLDs

    Over the last two years, the internet Corporation for Assigned Names and Numbers has been trying to introduce new generic Top-Level Domains to the Internet. The process was initially wracked by technical issues, but everyone from Apple to Google were eventually able to submit their applications for new gTLDs. Now ICANN is ready to start introducing some of these new gTLDs to the core of the Internet itself.

    ICANN announced today that it has approved the first round of gTLDs that it will introduce to the Internet’s Root Zone. With this out of the way, the owners of the new gTLDs can now work on making them available to Internet users at large.

    “It’s happening – the biggest change to the Internet since its inception,” said Akram Atallah, president of ICANN’s Generic Domains Division. “In the weeks and months ahead, we will see new domain names coming online from all corners of the world, bringing people, communities and businesses together in ways we never imagined. It’s this type of innovation that will continue to drive our global society.”

    Interestingly enough, the first four gTLDs to be approved are all in non-Latin script. The addition of non-Latin script gTLDs was a major departure from how the Internet was previously run as Web sites in countries like China and Russia can now offer Web addresses in their native languages.

    Here’s the first four gTLDs being added:

  • شبكة (xn--ngbc5azd) – Arabic for “web/network”
    Registry: International Domain Registry Pty. Ltd.
  • онлайн (xn--80asehdb) – Cyrillic for “online”
    Registry: CORE Association
  • сайт (xn--80aswg) – Cyrillic for “site”
    Registry: CORE Association
  • 游戏(xn--unup4y) – Chinese for “game(s)”
    Registry: Spring Fields, LLC

    • Now, sites with these gTLDs aren’t active just yet as ICANN requires the registrars to “complete a final process built into the new gTLD program to protect trademark rights holders.” This process only lasts for 30 days, however, and sites with these new gTLDs can then be opened to the public at that time.

    With these four new domain names, the total gTLD count is now at 26. ICANN says that there may be over 1,400 gTLDs by the end of all this. We’ll even see gTLDs like .amazon, but it won’t belong exclusively to the retailer.

    [Image: ICANNnews/YouTube]

  • Demand Media Announces Designs.com Platform For gTLDs

    Demand Media Announces Designs.com Platform For gTLDs

    Demand Media announced that later this year, it will launch Designs.com, as the new gTLDs become available. The site will feature a platform to create designs for sites utilizing the new domain extensions.

    “The goal is to have easy ways for folks who have registered a new gTLD to quickly find categorized templates and tools for building a website,” a spokesperson for the company tells WebProNews.

    New Designs.com sites will be included with the registration of the domain extensions, such as .dentist and .social. Designs.com will be integrated into the purchase process of partnering domain and web hosting providers.

    “A consumer using .FAN needs features related to sharing, ‘liking’ and growing a community, while a professional using .ARCHITECT needs features related to a strong visual portfolio and self-promotion,” says Nick Nelson, GM of Designs.com. “Until today, tools and templates have been designed for no-one in particular. New gTLDs are for specific audiences, so we must have tools that create a web presence with the same tailored approach, making the website and web address inseparable.”

    Designs.com will feature a point-and-click design tool, and customers can see right away how their site will look on mobile devices. It will also include access to drag-and-drop social media tools.

    You can see the introductory video here.

  • Google Updates Indexing To Treat TLDs Differently

    Google has been updating its indexing systems to treat some TLDs differently than in the past. Some country-code TLDs are being treated as generic TLDs.

    The list, which may still change more over time, of generic country code TLDs is as follows: .ad, .as, .bz, .cc, .cd, .co, .dj, .fm, .gg, .io, .la, .me, .ms, .nu, .sc, .sr, .su, .tv, .tk and .ws.

    Google’s Pierre Far shared the news in a Google+ post (via Search Engine Roundtable).

    Pierre Far

    Pierre Far1 day ago

    Expanded list of ccTLDs treated as Generic ccTLDs

    Over the past few months, we've been updating our indexing systems to treat certain country country-code TLDs as generic TLDs; that is, even though the top-level domain has a country code, we would treat it, by default, as not targeting a specific country. Now that all the pieces are in place, we also updated our Help Center article listing the TLDs we treat as gTLDs:

    http://support.google.com/webmasters/bin/answer.py?hl=en&answer=1347922

    The latest addition includes the quite-popular (and personal favorite 🙂 ) .io.

    Geotargetable domains – Webmaster Tools Help
    Generic top-level domains (gTLDs) don’t target specific countries. If your site has a generic top-level domain, such as .com, .org, or any of the domains listed below, and targets users in a particula… 20    0 Powered by socialditto

    Google’s Matt Cutts recently did a Webmaster Help video discussing location and ccTLDs. If you’re reading this article, you might find it helpful. You can get the gist of it in text if you click the link, in case you don’t feel like sitting through the two-and-a-half-minute video.

  • Demand Media Acquires Domain Registrar Name.com

    Demand Media Acquires Domain Registrar Name.com

    Demand Media announced on Monday that it has acquired Name.com, a Denver-based domain registrar. The company says the acquisition is intended to expand its platform as it prepares for its release of new Top Level Domains this year.

    A spokesperson for Demand Media tells WebProNews that the company’s eNom registrar division has not had a significant retail presence, and that, “With this acquisition, we are directly reaching the end user; and expanding beyond our reseller community (of nearly 9K customers) to proactively target end users and offer a wide range of value-added services.”

    Name.com has a substantial retail footprint, according to the company.

    Demand Media CEO Richard Rosenblatt said, “Name.com will provide a direct channel for us to reach consumers and small businesses as they develop and manage their online identities. This becomes even more valuable as over one thousand new domain extensions are expected to become available for registration in the years ahead.”

    Taryn Naidu, EVP of the company’s registrar services, added, “Our strategy is to provide an end-to-end solution for all things domains — whether you are looking to consume or distribute names and services. Name.com brings innovation, creativity and a deep commitment to their customers – factors which we believe are essential in the environment of new gTLDs.”

    Demand Media applied for 26 gTLDs, in addition to partnering with Donuts for even more. ICANN announced in June that it had received a total of 1,930 applications.

    Name.com was founded in 2003, and has registered about 1.5 million domains. This should be a nice addition to eNom division, which is the second largest registrar in the world, with over 13.5 million domain names on its platform, registered for nearly nine thousands resellers and partners.

    Terms of the deal were not disclosed.

    Demand Media posted record revenue and profitability with its last earnings release. It will be interesting to see if that continues with the next one.

  • ICANN Still Rules The Internet Whether You Like It Or Not

    If you know anything about the Internet, then you know about ICANN. The Internet Corporation for Assigned Names and Numbers has power over the the most important parts of the Internet – domain names, IP addresses and protocol numbers. That kind of power comes with great responsibility and the US Department of Commerce agrees that ICANN is the only one capable of doing it.

    The Register reports that the US Department of Commerce has agreed to extend ICANN’s rule over the Internet Assigned Numbers Authority for the next three to seven years. The news was confirmed by the National Telecommunication and Information Administration last night. The most important part of the deal is that ICANN has retained the power to add and remove top-level domains as they see fit.

    The retention of that power is essential as ICANN recently hosted the largest digital land grab in history with companies from all over the world paying to own various generic top-level domains, or gTLDs. Companies like Google and Amazon applied for scores of domains to either use for their own purproses or lease out for individuals to run Web sites with the .soy domain.

    All of this doesn’t means that ICANN is free to as they wish with the entirety of the Internet like they used to. The NTIA published a press release that details the new regulations that ICANN must adhere as the overlord of the IANA.

    Based on input from the global community, NTIA added new requirements. Those include a clear separation between the policy development associated with the IANA services, and implementation by the IANA functions contractor; a robust company-wide conflict of interest policy; a heightened respect for local national law; and a series of consultation and reporting requirements to increase transparency and accountability.

    While some may not like ICANN’s approach to ruling the Internet, they are not alone. They have to work with multiple stakeholders from around the world to actually get anything done. It’s the kind of approach that has worked well for the Internet and maintains a level of equality for all who wish to surf the Web (local governments blocking access to sites notwithstanding).

    Besides, if you don’t like ICANN, you can at least agree that it’s better than the UN controlling it. Here’s hoping ICANN can keep it that way when the UN meets later this year to discuss a possible take over of the Internet.

  • Demand Media’s Military, Political gTLD Choices Simply Driven By Data

    There are a lot of interesting sub-stories behind the big Internet land rush that has been the gTLD application process. This week, ICANN released its big list of the gTLDs that were applied for during the application window, as well as the companies that applied for them. Google applied for as many as 101 of them, and Amazon applied for 76, many of which were in direct competition with Google. Facebook, on the other hand didn’t apply for any.

    Demand Media’s story has been a pretty interesting one, having applied for 26 on a standalone basis, with the potential to acquire others from Donuts, thanks to a partnership between the two companies. The really interesting part about Demand Media’s applications, however, are the actual gTLDs they chose to apply for, particularly those related to the armed services and political parties. Such gTLDs include: .airforce, .army, .navy, .democrat and .republican. You can see the full list here.

    It turns out that Demand Media’s choices were driven purely by data, much like other parts of the company’s business practices have been historically. Demand Media made a name for itself by producing content based on what data shows is in demand. Presumably, that’s where the company’s name comes from. Based on comments made by a spokesperson, Demand Media approached its gTLD application strategy in a very similar way.

    Leyla Farah, speaking on behalf of Demand Media, talked to TheDomains.com, and explained the approach, when asked about the company’s choices to apply for gTLDs directly related to the armed services and political parties.

    According to the site, Farah said: “Our entire portfolio of gTLD applications were all grounded in the same data-driven process. We analyzed all of the data we could find to determine which words people were consistently using to navigate through their digital world. Many of the most interesting words capture a universal sense of personal or professional identity, or are words that have come to define large and important ideas around the world. Ideas like ‘democrat’ and ‘army’ and ‘actor’ represent global, vibrant communities that naturally gravitate to one another using shared language and experiences. They are universal ideas that aren’t limited to any single entity like an armed service or political party in a single country — in fact they are often used generically (e.g., ‘Arnie’s Army’ etc.). Because of the universality and generic nature of of these words, there really aren’t grounds for objection by anyone.”

    In other Demand Media news, the company’s President and CFO, Charles Hilliard is stepping down, while the company has reaffirmed its guidance for Q2.

  • Amazon Competes With Google On A Bunch Of gTLDs

    Google applied for 101 gTLDs, according to the big list ICANN revealed this week. Amazon, didn’t apply for quite that many, but still made a very significant showing on the list with 76 applications of its own.

    You can see Google’s full list here, and Amazon’s below.

    First, it’s worth pointing out that the two Internet giants applied for more than a few of the same domains. These include: .app, .book, .buy, .cloud, .dev, .drive, .game, .map, .movie, .music, .play, .search, .shop, .show, .store, and .talk.

    Some of these would be obvious choices for either company, but some stand out for various reasons. Drive, for example, is actually the name of a Google product. Amazon does have Cloud Drive, however. Google has Google Play, formerly known as Android Market (and the Google eBookstore and Google Music). The closest thing Amazon has to that name, as far as I can tell, is Amazon Cloud Player. Google has a product called Google Talk. Amazon has no product with that name, to my knowledge.

    The one that really stands out on this list, of course, is Search. While this is an obvious choice for Google, it is quite interesting that Amazon would apply for it. Amazon has its own search feature, of course, but what would Amazon do with a .search TLD? Also worth noting is the fact that neither Yahoo or Microsoft applied for it. There were a couple other applicants: dot Now Limited and Bitter McCook, which comes with a donuts.co email address. Donuts, Inc. applied for a bunch, and has a partnership with Demand Media, which could enable Demand Media to acquire the rights to some of them. You can view Demand’s own list of applied-for gTLDs here.

    It’s a little surprising that Google didn’t apply for some of the others on Amazon’s list. That includes things like: .circle, .group, .mobile, .news, and .video.

    It’s also interesting that Facebook apparently didn’t apply for any of the gTLDs, while Amazon did apply for .like, and is the only company that did so, according to the list.

    Now, on to Amazon’s full list:

    – .amazon
    – .app
    – .audible
    – .author
    – .aws
    – .book
    – .bot
    – .box
    – .buy
    – .call
    – .circle
    – .cloud
    – .coupon
    – .deal
    – .dev
    – .drive
    – .fast
    – .fire
    – .free
    – .game
    – .got
    – .group
    – .hot
    – .imdb
    – .jot
    – .joy
    – .kids
    – .kindle
    – .like
    – .mail
    – .map
    – .mobile
    – .moi
    – .movie
    – .music
    – .news
    – .now
    – .pay
    – .pin
    – .play
    – .prime
    – .read
    – .room
    – .safe
    – .save
    – .search
    – .secure
    – .shop
    – .show
    – .silk
    – .smile
    – .song
    – .spot
    – .store
    – .talk
    – .tunes
    – .tushu
    – .video
    – .wanggou
    – .wow
    – .yamaxun
    – .you
    – .yun
    – .zappos
    – .zero
    – . アマゾン
    – .クラウド
    – .ストア
    – .セール
    – .ファッション
    – .ポイント
    – .亚马逊
    – .家電
    – .書籍
    – .通販
    – .食品

    You can see ICANN’s full list of gTLDs applied for (and their applicants) here.

  • Demand Media Applies For Military, Political Domains

    ICANN released the big list of gTLD applicants today. Google applied for over 100 different ones. Facebook didn’t apply for any. There were certainly plenty of interesting applications. You can peruse the whole list here.

    We knew Demand Media had applied for some, but now, we know which ones, and the choices are interesting.

    The company applied for 26, and for 16 of them, they were the only applicant. Here are those 16:

    .actor
    .airforce
    .army
    .dance
    .democrat
    .engineer
    .gives
    .immobilien
    .kaufen
    .moda
    .navy
    .ninja
    .pub
    .rehab
    .republican
    .social

    “We are very pleased with today’s results. We selected our TLDs based on data-driven algorithms that leveraged our leading registrar and content platforms to determine what domains small businesses and consumers were demanding,” said Demand Media EVP Taryn Naidu. “We are excited about the market potential for each of our TLDs and look forward to the innovative new product offerings that will result from making these available to consumers.”

    The ones Demand Media applied for that have multiple applicants are:

    .bar
    .cam
    .fishing
    .gay
    .green
    .map
    .mom
    .moto
    .rip
    .wow

    These 26 domains are just the ones the company applied for on a stand-alone basis. Additionally, the company has an agreement with Donuts, through which it may acquire rights in certain other gTLDs, once they’ve been awarded to Donuts.

    These rights, Demand Media says, are shared equally with Donuts and are associated with 107 gTLDs for which Donuts is the applicant. I won’t list them all here, but they include things like: .golf, .home, .hosting, .hot, .insurance, .investments, .law, .living and .media.

    More on the Demand Media/Donuts partnership here.

  • Facebook Didn’t Apply For Any New gTLDs?

    ICANN finally revealed it’s list of all the applicants for new generic top-level domains (gTLDs). It’s a huge list, and includes all applicants from the January 13 – May 30 application window. Google applied for over 100 different gTLDs. Apple only applied for one: .Apple. Microsoft applied for some. Amazon applied for some (including .Search, interestingly).

    One Internet giant is noticeably missing from the list altogether: the newly public Facebook. No applications for .Facebook, .Face, .Book, .FB, .OpenGraph, .Graph, or anything of the sort from the company (though Google did apply for .Book).

    United TLD Holdco Ltd. applied for .Social (update: apparently on behalf of Demand Media). Google and a number of others applied for .App.

    It’s worth noting that Google applied for its domains using a third party, but we haven’t seen anything indicating that this was the case with Facebook. Even with Google’s applications, they came from @google email addresses.

    I don’t know exactly what Facebook would use any gTLDs for anyway, considering that Facebook’s presence is already plastered across the web itself, and is all centered around Facebook.com to begin with, but it seems likely that many of the applicants don’t know exactly what they’re going to do with all gTLDs either. My guess is that many of the applications are simply just to secure things that these companies may want somewhere down the line, and are just a precautionary measure to keep others from getting them.

    It’s interesting that Facebook is apparently not too interested in such precautions. There are certainly no hints at future Facebook products, and not much room for speculation about future moves from the company.

    Perusing Google’s giant list, on the other hand, leaves a whole lot of room for speculation about what Google may be up to. Of course, it’s only that at this point. Speculation.

    Image: Facebook CEO Mark Zuckerberg with dog Beast

  • Demand Media Applies For 26 gTLDs, Partners With Donuts For More

    Demand Media announced this morning that it is pursuing some new generic Top Level Domains (gTLDs). Specifically, the company says it has selected names in categories connected to ecommerce, personal & professional identity, education, entertainment, internet life, sports, small business and social media.

    “We believe the new gTLD program represents a significant milestone in the evolution of the Internet,” said CEO Richard Rosenblatt. “In addition to delivering more choice for consumers and business owners, we expect the domain name expansion to spur innovation and new business opportunities.”

    The company has applied for 26 names on a stand-alone basis. It has also partnered with Donuts Inc. so that it may acquire rights in certain gTLDs, after they’re awarded to Donuts by ICANN.

    Demand Media tells WebProNews it will not comment further on specifics.

    We did speak with Donuts Vice President of Communications and Industry Relations, Mason Cole, who told us, “If you look at the existing namespace, there are only 22 existing generic told level domains. There are hundreds of country coded TLDs, like .jp for Japan, and so on, but in the generic name space, it’s awfully constrained. It’s very hard to find a good Internet identity that a company, or a person, or a family, or a new product, or a cause of some kind can use to identify themselves and promote their interests on the web.”

    Watch the video for the full interview:

    Donuts CEO, Paul Stahura said, “As previously announced, Donuts has raised more than $100 million in funding to pursue the new gTLD opportunity. Donuts’ strategic arrangement with Demand Media takes us well beyond that $100 million funding and enables both companies to utilize additional resources, expertise and talent to generate the most value and benefits for customers from this historic opportunity.”

    Last week, Donuts announced that it selected Demand Media Europe (a wholly-owned subsidiary of Demand Media), as its registry services provider.

  • ICANN gTLDs Application Window Closes

    It was recently reported that The Internet Corporation for Assigned Names and Numbers’ (ICANN) system for submitting applications for new generic top-level domains (gTLDs) was finally set to be reopened on May 22, and COO Akram Atallah has announced the TLD application system has now closed, after over 1900 applications were submitted.

    For a bit of backstory, the ICANN application platform, called TLD application system (TAS), was taken down after a glitch was reported which allowed applicants to see each other’s user names and file names. ICANN set April 12th as the last day to submit applications before taking the system offline, after its board of directors approved an increase of the number of gTLDs from the current amount of 22 last June. ICANN, who moderates the address system of the internet, also began accepting non-traditional domain name endings this year, including ‘.sport,’ ‘,food,’ and ‘.bank,’ in hopes to prompt innovation in web commerce. Though, some critics have stated that the new extensions might only confuse consumers and force established online storefronts to spend millions on securing new versions of their brand web addresses.

    Akram points out that submitted applications and payments are still being processed, and final numbers and a list for applied-for domains will be published on a target date of June 13. Akram adds, “We thank all applicants and the ICANN community for their support throughout the application process.”

  • ICANN Gets New Independent Objector

    It was recently reported that The Internet Corporation for Assigned Names and Numbers’ (ICANN) system for submitting applications for new generic top-level domains (gTLDs) is finally set to be reopened on May 22, and the leadership has announced that Professor Alain Pellet will serve as the Independent Objector for the retooled program.

    For a bit of backstory, the ICANN application platform, called TLD application system (TAS), was taken down after a glitch was reported which allowed applicants to see each other’s user names and file names. ICANN set April 12th as the last day to submit applications before taking the system offline, after its board of directors approved an increase of the number of gTLDs from the current amount of 22 last June. ICANN, who moderates the address system of the internet, also began accepting non-traditional domain name endings this year, including ‘.sport,’ ‘,food,’ and ‘.bank,’ in hopes to prompt innovation in web commerce. Though, some critics have stated that the new extensions might only confuse consumers and force established online storefronts to spend millions on securing new versions of their brand web addresses.

    According to ICANN, “acting solely in the best interests of global Internet users, the Independent Objector may lodge Limited Public Interest and Community objections in cases where no other objection is made to an application that the Independent Objector deems to be objectionable.” ICANN commenced looking for an Independent Objector last November, and interviewed numerous candidates. Pellet, who is widely published and represented governments as Counsel and Advocate in the International Court of Justice, was selected for the position.

    In related news, some parties think that ICANN’s expanding of the variety of top-level domain addresses could become a bit of a disaster for certain brands, with cybersquatters stepping in and opportunistically buying up all sorts of brand names with new domain extensions. The post of the Independent Objector appears to be one of the last lines of defense against these sorts of nefarious domain registrations.

  • ICANN System for New gTLDs to Reopen

    It was recently reported that The Internet Corporation for Assigned Names and Numbers’ (ICANN) system for submitting applications for new generic top-level domains (gTLDs) has been down as of late, and now ICANN engineers plan to reopen the application platform on May 22, with the new deadline for submitting applications being May 30.

    The application platform, called TLD application system (TAS), was taken down after a glitch was reported which allowed applicants to see each other’s user names and file names. ICANN set April 12th as the last day to submit applications before taking the system offline, after its board of directors approved an increase of the number of gTLDs from the current amount of 22 last June. ICANN, who moderates the address system of the internet, also began accepting non-traditional domain name endings this year, including ‘.sport,’ ‘,food,’ and ‘.bank,’ in hopes to prompt innovation in web commerce. Though, some critics have stated that the new extensions might only confuse consumers and force established online storefronts to spend millions on securing new versions of their brand web addresses.

    ICANN had recently stated that the glitch in their system only affected a small number of users, and that there is no evidence that anyone exploited the security breach. ICANN has been in the process of notifying those who were affected by the problem, and should finally have the system running again after tying up loose ends.

  • Demand Media Earnings: $86.2 Million In Revenue

    Demand Media just released its first quarter 2012 results, posting record first quarter revenue and raising 2012 guidance. For the quarter, ended March 31, total revenue was up 8% year-over-year, to $86.2 million

    CEO Richard Rosenblatt said, “Driven by continued growth across our businesses, our first quarter revenue exceeded our seasonally strong Q4 2011 results. We are pleased with our first quarter results and remain focused on investing in our long-term growth initiatives, including enhancing the quality of our Owned & Operated properties, expanding our content distribution channels and partnerships, and pursuing new generic Top Level Domain opportunities.”

    It was the second quarter in a row in which eHow saw revenue growth. The company’s free cash flow was also greatly impacted (increased by $11.8 million YoY) by the company’s decreased content spend on eHow.

    According to the report, eHow ranked as the #17 website in the US in March 2012, up from #19 in July 2011. LIVESTRONG.COM/eHow Health continued to rank as the #3 Health property in the US based on unique visits throughout the first quarter of 2012, it says.

    Another major point of interest:

    Owned & Operated page views increased 22% year-over-year, driven primarily by strong traffic growth to Cracked.com and LIVESTRONG.COM, partially offset by lower year-over-year eHow.com page views due to early 2011 search algorithm changes.

    That would be Google’s Panda update. During its last earnings call, however, the company said it had not been impacted by a Google algorithm change since July. We’ll be listening to today’s call, and will see what they have to say about it this time. Stay tuned.

    For now, here’s the release in its entirety:

    SANTA MONICA, Calif.–(BUSINESS WIRE)–May. 8, 2012– Demand Media, Inc. (NYSE: DMD), a leading content and social media company, today reported financial results for the quarter ended March 31, 2012 and raised its previously issued fiscal 2012 financial guidance.

    “Driven by continued growth across our businesses, our first quarter revenue exceeded our seasonally strong Q4 2011 results,” said Richard Rosenblatt, Chairman and CEO of Demand Media. “We are pleased with our first quarter results and remain focused on investing in our long-term growth initiatives, including enhancing the quality of our Owned & Operated properties, expanding our content distribution channels and partnerships, and pursuing new generic Top Level Domain opportunities.”

    Financial Summary
    In millions, except per share amounts
    Three months ended March 31,
    2011 2012 Change
    Total Revenue $ 79.5 $ 86.2 8 %
    Content & Media Revenue ex-TAC(1) $ 48.7 $ 50.6 4 %
    Registrar Revenue 27.7 32.3 17 %
    Total Revenue ex-TAC(1) $ 76.3 $ 82.9 9 %
    Income (loss) from Operations(2) $ (4.2 ) $ (2.9 ) NA
    Adjusted EBITDA(1) $ 20.1 $ 21.9 9 %
    Net income (loss)(2) $ (5.6 ) $ (1.8 ) NA
    Adjusted net income(1) $ 5.1 $ 5.9 17 %
    EPS(2) $ (0.13 ) $ (0.02 ) NA
    Adjusted EPS(1) $ 0.06 $ 0.07 17 %
    Cash Flow from Operations $ 19.2 $ 18.5 (4 )%
    Free Cash Flow(1) $ (0.1 ) $ 11.8 NA
    (1) Non-GAAP measures are described below and reconciled to their comparable GAAP measures in the accompanying tables. Effective Q1 2012, the Company is reporting Adjusted EBITDA instead of Adjusted OIBDA. Reconciliations for both measures are presented on the Company’s investor relations site.
    (2) Q1 2012 loss from operations and net loss include $1.8 million of accelerated non-cash amortization expense associated with content intangible assets removed from service in conjunction with the Company’s previously announced plan to improve its content creation and distribution platform.

    Q1 2012 Financial Summary:

    • Content & Media revenue ex-TAC grew 4% year-over-year and increased 1% compared to the fourth quarter of 2011. Year-over-year comparisons were impacted by early 2011 search algorithm changes. The 1% sequential improvement included the second consecutive quarter of revenue growth for eHow.
    • Registrar revenue grew 17% year-over-year and 3% compared to the fourth quarter of 2011. During the first quarter of 2012, the number of registered domains grew by a net 593,000 compared to 442,000 in the first quarter of 2011, due to growth from new partners and organic growth from resellers.
    • Loss from operations and net loss include $1.8 million of accelerated non-cash amortization expense associated with content intangible assets removed from service in conjunction with the Company’s previously announced plan to improve its content creation and distribution platform.
    • Free cash flow increased by $11.8 million year-over-year. The increase was driven by an 81% reduction of investment in intangible assets to $2.7 million. The intangible assets investment decline was the result of planned decreased content spend on eHow as the Company continued to make improvements to its content creation and distribution platform.

    “Our first quarter growth and significant free cash flow marks a great start for 2012, particularly in light of a tough year-over-year comparison due to early 2011 search algorithm changes,” said Charles Hilliard, President and CFO. “Demand Media’s increased guidance reflects our first quarter performance, our improved outlook for the remainder of 2012 and, for the first time in more than a year, a return to accelerating year-over-year revenue growth beginning in Q2.”

    Business Highlights:

    • In April 2012, Demand Media invested $18 million in pursuit of its generic Top Level Domain (“gTLD”) initiative, which it believes represents a complementary strategic growth opportunity for its Registrar services.
    • On a consolidated basis, Demand Media ranked as a top 20 US web property throughout the first quarter of 2012, ranking as #18 in March 2012(1). Demand Media’s worldwide unique users exceeded 104 million in March 2012(1).
    • On a standalone basis, eHow.com ranked as the #17 website in the US in March 2012, up from #19 inJuly 2011(1).
    • LIVESTRONG.COM/eHow Health continued to rank as the #3 Health property in the US based on unique visits throughout the first quarter of 2012(1). In May 2012, LIVESTRONG.COM won the People’s Voice Webby award for Health Websites.
    • Cracked.com continued its ranking as the most visited humor site in the US throughout the first quarter of 2012(1), and more time was spent on the site than any other humor website(1). In May 2012, Cracked.com won the People’s Voice Webby award for Humor Websites.
    • In February 2012, Demand Media introduced its innovative Social Feed ads, which allow advertisers to deliver customized social media content directly into their live rich media ads.
    • In March 2012, Demand Media launched the eHow.com Tech channel, with RadioShack as its lead sponsor, to help users master everyday tech-related tasks and projects.
    • In April 2012, Demand Media launched eHow Pets, the third major channel in its partnership withYouTube.
    • During the first quarter of 2012, Demand Media repurchased 421,000 shares of common stock for $3 million under its Board-authorized $50 million share repurchase program. Since the program’s inception, the Company has repurchased 2.8 million shares of common stock for $20 million.

    (1) Source: comScore.

    Operating Metrics:

    Three months ended March 31,
    2011 2012 % 
    Change
    Content & Media Metrics:
    Owned and operated
    Page views(1) (in millions) 2,582 3,142 22 %
    RPM(2) $ 15.69 $ 12.52 (20 )%
    Network of customer websites
    Page views(1) (in millions) 3,766 4,722 25 %
    RPM(2) $ 3.01 $ 3.10 3 %
    RPM ex-TAC(3) $ 2.16 $ 2.38 10 %
    Registrar Metrics:
    End of Period # of Domains(4) (in millions) 11.4 13.3 16 %
    Average Revenue per Domain(5) $ 9.88 $ 9.94 1 %

    ____________________

    (1) Page views represent the total number of web pages viewed across (a) our owned and operated websites and/or (b) our network of customer websites, to the extent that the viewed customer web pages host the Company’s content, social media and/or monetization services.
    (2) RPM is defined as Content & Media revenue per one thousand page views.
    (3) RPM ex-TAC is defined as Content & Media Revenue ex-TAC per one thousand page views.
    (4) Domain is defined as an individual domain name paid for by a third-party customer where the domain name is managed through our Registrar service offering.
    (5) Average revenue per domain is calculated by dividing Registrar revenue for a period by the average number of domains registered in that period. Average revenue per domain for partial year periods is annualized.

    Beginning July 1, 2011, the number of net new domains has been adjusted to include only new registered domains added to our platform for which the Company has recognized revenue. Excluding the impact of this change, end of period # of domains at March 31, 2012 and average revenue per domain during the three months ended March 31, 2012 would have increased 20% and decreased 4%, respectively, compared to the corresponding prior-year periods.

    Q1 2012 Operating Metrics:

    • Owned & Operated page views increased 22% year-over-year, driven primarily by strong traffic growth to Cracked.com and LIVESTRONG.COM, partially offset by lower year-over-year eHow.com page views due to early 2011 search algorithm changes. The mix shift in page view growth to relatively lower RPM properties in Q1 2012 resulted in a 20% year-over-year decline in RPM.
    • Network page views grew 25% year-over-year, primarily due to the acquisition of IndieClick in August 2011, which generated 1.6 billion page views during the quarter ended March 31, 2012, offset partly by a decline in page views associated with certain of our social media customers. Network RPM ex-TAC increased 10% year-over-year, reflecting higher RPMs from YouTube Channels that more than offset lower RPMs from IndieClick.
    • End of period domains increased 16% to 13.3 million year-over-year, driven by the addition of higher volume customers and growth from existing resellers, with average revenue per domain increasing by 1%.

    Business Outlook

    The following forward-looking information includes certain projections made by management as of the date of this press release. The Company does not intend to revise or update this information, except as required by law, and may not provide this type of information in the future. Due to a variety of factors, actual results may differ significantly from those projected. The factors that may affect results include, without limitation, the factors referenced later in this announcement under the caption “Cautionary Information Regarding Forward-Looking Statements.” These and other factors are discussed in more detail in the Company’s filings with the Securities and Exchange Commission.

    Excluding up to $4 million of 2012 expenses that the Company expects to incur related to the formation of its generic Top Level Domain (“gTLD”) initiative, the Company’s guidance for the second quarter endingJune 30, 2012 and fiscal year ending December 31, 2012 is as follows:

    Second Quarter 2012

    • Revenue in the range of $89.0 – $91.0 million
    • Revenue ex-TAC in the range of $85.0 – $87.0 million
    • Adjusted EBITDA in the range of $22.0 – $23.0 million
    • Adjusted EPS in the range of $0.07 – $0.08 per share
    • Weighted average diluted shares of 86.0 – 87.0 million

    Full Year 2012

    • Revenue in the range of $361.0 – $367.0 million
    • Revenue ex-TAC in the range of $347.0 – $353.0 million
    • Adjusted EBITDA in the range of $96.0 – $99.0 million
    • Adjusted EPS in the range of $0.33 – $0.35 per share
    • Weighted average diluted shares of 86.5 – 87.5 million

    Conference Call and Webcast Information

    Demand Media will host a corresponding conference call and live webcast at 5:00 p.m. Eastern timetoday. To access the conference call, dial 877.565.1268 (for domestic participants) or 937.999.3108 (for international participants). The conference ID is 74265713. To participate on the live call, analysts should dial-in at least 10-minutes prior to the commencement of the call. A live webcast also will be available on the Investor Relations section of the Company’s corporate website at http://ir.demandmedia.com and via replay beginning approximately two hours after the completion of the call.

    About Non-GAAP Financial Measures

    To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we use certain non-GAAP financial measures described below. The presentation of this additional financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliation of Non-GAAP Measures to Unaudited Consolidated Statements of Operations” included in this release.

    Effective Q1 2012, the Company is reporting Adjusted EBITDA instead of Adjusted OIBDA. While the dollar value of each measure is the same, a comparison of the historical reconciliation of both measures is provided in our supplemental financial schedules posted on the investor relations section of our corporate site. The non-GAAP financial measures presented in this release are the primary measures used by the Company’s management and board of directors to understand and evaluate its financial performance and operating trends, including period to period comparisons, to prepare and approve its annual budget and to develop short and long term operational plans. Additionally, Adjusted EBITDA is the primary measure used by the compensation committee of the Company’s board of directors to establish the funding targets for and fund its annual employee bonus pool. We believe our presented non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) management frequently uses them in its discussions with investors, commercial bankers, securities analysts and other users of its financial statements.

    Revenue ex-TAC is defined by the Company as GAAP revenue less traffic acquisition costs (“TAC”). TAC comprises the portion of Content & Media GAAP revenue shared with the Company’s network customers. Management believes that Revenue ex-TAC is a meaningful measure of operating performance because it is frequently used for internal managerial purposes and helps facilitate a more complete period-to-period understanding of factors and trends affecting the Company’s underlying revenue performance.

    Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) is defined by the Company as net income (loss) before income tax expense, other income (expense), interest expense (income), depreciation, amortization, stock-based compensation, as well as the financial impact of acquisition and realignment costs, the formation expenses directly related to its generic Top Level Domain (“gTLD”) initiative, and any gains or losses on certain asset sales or dispositions. Acquisition and realignment costs include such items, when applicable, as (1) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (2) legal, accounting and other professional fees directly attributable to acquisition activity, and (3) employee severance payments attributable to acquisition or corporate realignment activities. Management does not consider these expenses to be indicative of the Company’s ongoing operating results or future outlook.

    Management believes that these non-GAAP measures reflect the Company’s business in a manner that allows for meaningful period to period comparisons and analysis of trends. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period to period comparisons of the Company’s underlying recurring revenue and operating costs which is focused more closely on the current costs necessary to utilize previously acquired long-lived assets. In addition, management believes that it can be useful to exclude certain non-cash charges because the amount of such expenses is the result of long-term investment decisions in previous periods rather than day-to-day operating decisions. For example, due to the long-lived nature of a majority of its media content, the revenue generated by the Company’s content assets in a given period bears little relationship to the amount of its investment in content in that same period. Accordingly, management believes that content acquisition costs represent a discretionary long-term capital investment decision undertaken at a point in time. This investment decision is clearly distinguishable from other ongoing business activities, and its discretionary nature and long-term impact differentiate it from specific period transactions, decisions regarding day-to-day operations, and activities that would have an immediate impact on operating or financial performance if materially changed, deferred or terminated.

    Adjusted Earnings Per Share is defined by the Company as Adjusted Net Income divided by the weighted average number of shares outstanding. Adjusted Net Income is defined by the Company as net income (loss) before the effect of stock-based compensation, amortization of intangible assets acquired via business combinations, accelerated amortization of intangible assets removed from service, acquisition and realignment costs, the formation expenses directly related to its generic Top Level Domain(“gTLD”) initiative, and any gains or losses on certain asset sales or dispositions, and is calculated using the application of a normalized effective tax rate. Acquisition and realignment costs include such items, when applicable, as (1) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (2) legal, accounting and other professional fees directly attributable to acquisition activity, and (3) employee severance payments attributable to acquisition or corporate realignment activities. Management does not consider these expenses to be indicative of the Company’s ongoing operating results or future outlook.

    Management believes that Adjusted Net Income and Adjusted Earnings Per Share provide investors with additional useful information to measure the Company’s underlying financial performance, particularly from period to period, because these measures are exclusive of certain non-cash expenses not directly related to the operation of its ongoing business (such as amortization of intangible assets acquired via business combinations, as well as certain other non-cash expenses such as purchase accounting adjustments and stock-based compensation) and include a normalized effective tax rate based on the Company’s statutory tax rate.

    Discretionary Free Cash Flow is defined by the Company as net cash provided by operating activities excluding cash outflows from acquisition and realignment activities, and the formation expenses directly related to its generic Top Level Domain (“gTLD”) initiative, less capital expenditures to acquire property and equipment. Free Cash Flow is defined by the Company as Discretionary Free Cash Flow less investments in intangible assets. Management believes that Discretionary Free Cash Flow and Free Cash Flow provide investors with additional useful information to measure operating liquidity because they reflect the Company’s underlying cash flows from recurring operating activities after investing in capital assets and intangible assets. These measures are used by management, and may also be useful for investors, to assess the Company’s ability to generate cash flow for a variety of strategic opportunities, including reinvestment in the business, potential acquisitions, payment of dividends and share repurchases.

    The use of these non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense, or cash flows that affect the Company’s operations. An additional limitation of these non-GAAP financial measures is that they do not have standardized meanings, and therefore other companies may use the same or similarly-named measures but exclude different items or use different computations. Management compensates for these limitations by reconciling these non-GAAP financial measures to the most comparable GAAP financial measures within its financial press releases. Non-GAAP financial measures should be considered in addition to, not as a substitute for, measures prepared in accordance with GAAP. Further, these non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. The accompanying tables have more details on the GAAP financial measures and the related reconciliations.

    About Demand Media

    Demand Media, Inc. (NYSE: DMD) is a leading content and social media company that informs and entertains one of the Internet’s largest audiences, helps advertisers find innovative ways to engage with their customers and enables publishers to expand their online presence. Headquartered in Santa Monica, CA, Demand Media has offices in North America, South America and Europe. For more information aboutDemand Media, please visit www.demandmedia.com

    Cautionary Information Regarding Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements involve risks and uncertainties regarding the Company’s future financial performance, and are based on current expectations, estimates and projections about our industry, financial condition, operating performance and results of operations, including certain assumptions related thereto. Statements containing words such as “guidance,” “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “projections,” “business outlook,” and “estimate” or similar expressions constitute forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered an indication of future performance. Potential risks and uncertainties include, among others: changes in the methodologies of Internet search engines, including ongoing algorithmic changes made byGoogle to its search results as well as possible future changes, and the impact such changes may have on page view growth and driving search related traffic to our owned and operated websites and the websites of our network customers; changes in our content creation and distribution platform, including the possible repurposing of content to alternate distribution channels, or the sale or removal of content; our ability to successfully launch, produce and monetize new content formats; the inherent challenges of estimating the overall impact on page views and search driven traffic to our owned and operated websites based on the data available to us as Google continues to make adjustments to its search algorithms; our ability to compete with new or existing competitors; our ability to maintain or increase our advertising revenue; our ability to continue to drive and grow traffic to our owned and operated websites and the websites of our network customers; our ability to effectively monetize our portfolio of content; our dependence on material agreements with a specific business partner for a significant portion of our revenue; future internal rates of return on content investment and our decision to invest in different types of content in the future, including video and other formats of text content; our ability to attract and retain freelance creative professionals; changes in our level of investment in media content intangibles; the effects of changes in marketing expenditures or shifts in marketing expenditures; the effects of seasonality on traffic to our owned and operated websites and the websites of our network customers; our ability to continue to add partners to our registrar platform on competitive terms; our ability to successfully pursue and implement our gTLD initiative; changes in stock-based compensation; changes in amortization or depreciation expense due to a variety of factors; potential write downs, reserves against or impairment of assets including receivables, goodwill, intangibles, and media content or other assets; changes in tax laws, our business or other factors that would impact anticipated tax benefits or expenses; our ability to successfully identify, consummate and integrate acquisitions, including integrating our recent acquisitions; our ability to retain key customers and key personnel; risks associated with litigation; the impact of governmental regulation; and the effects of discontinuing or discontinued business operations. From time to time, we may consider acquisitions or divestitures that, if consummated, could be material. Any forward-looking statements regarding financial metrics are based upon the assumption that no such acquisition or divestiture is consummated during the relevant periods. If an acquisition or divestiture were consummated, actual results could differ materially from any forward-looking statements. More information about potential risk factors that could affect our operating and financial results are contained in our annual report on Form 10-K for the fiscal year ending December 31, 2011 filed with the Securities and Exchange Commission (http://www.sec.gov) on February 24, 2012, and as such risk factors may be updated in our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, including, without limitation, information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

    Furthermore, as discussed above, the Company does not intend to revise or update the information set forth in this press release, except as required by law, and may not provide this type of information in the future.

    Demand Media, Inc. and Subsidiaries

    Unaudited Condensed Consolidated Statements of Operations

    (In thousands, except per share amounts)
    Three months ended March 31,
    2011 2012
    Revenue $ 79,523 $ 86,234
    Operating expenses
    Service costs (exclusive of amortization of intangible assets shown separately below) (1) (2) 37,654 41,262
    Sales and marketing (1) (2) 9,583 10,393
    Product development (1) (2) 9,251 10,124
    General and administrative (1) (2) 17,024 15,395
    Amortization of intangible assets 10,203 11,956
    Total operating expenses 83,715 89,130
    Income (loss) from operations (4,192 ) (2,896 )
    Other income (expense)
    Interest income 42 15
    Interest expense (162 ) (137 )
    Other income (expense), net (257 ) (19 )
    Total other expense (377 ) (141 )
    Income (loss) before income taxes (4,569 ) (3,037 )
    Income tax expense (1,013 ) 1,195
    Net loss $ (5,582 ) $ (1,842 )
    (1) Stock-based compensation expense included in the line items above:
    Service costs $ 237 $ 708
    Sales and marketing 900 1,536
    Product development 1,116 1,688
    General and administrative 6,674 3,459
    Total stock-based compensation expense $ 8,927 $ 7,391
    (2) Depreciation included in the line items above:
    Service costs $ 4,044 $ 3,650
    Sales and marketing 72 134
    Product development 321 282
    General and administrative 572 898
    Total depreciation $ 5,009 $ 4,964
    Loss per common share:
    Net loss $ (5,582 ) $ (1,842 )
    Cumulative preferred stock dividends (3) (2,477 ) —
    Net loss attributable to common stockholders $ (8,059 ) $ (1,842 )
    Basic and diluted net loss per share $ (0.13 ) $ (0.02 )
    Weighted average number of shares 63,759 82,942
    (3) As a result of the Company’s initial public offering which was completed on January 31, 2011, all shares of the Company’s preferred stock were converted to common stock.
    Demand Media, Inc. and Subsidiaries

    Unaudited Condensed Consolidated Balance Sheets

    (In thousands)
    December 31,
    2011    		 March 31, 
    2012
    Current assets
    Cash and cash equivalents $ 86,035 $ 95,568
    Accounts receivable, net 32,665 32,323
    Prepaid expenses and other current assets 8,656 7,995
    Deferred registration costs 50,636 56,540
    Total current assets 177,992 192,426
    Property and equipment, net 32,626 34,481
    Intangible assets, net 111,304 101,864
    Goodwill 256,060 256,060
    Deferred registration costs 9,555 11,249
    Other long-term assets 2,566 4,239
    Total assets $ 590,103 $ 600,319
    Liabilities, Convertible Preferred Stock and Stockholders’ Equity
    Current liabilities
    Accounts payable $ 10,046 $ 7,871
    Accrued expenses and other current liabilities 33,932 33,706
    Deferred tax liabilities 18,288 18,663
    Deferred revenue 71,109 76,844
    Total current liabilities 133,375 137,084
    Deferred revenue 14,802 16,540
    Other liabilities 1,660 3,160
    Total liabilities 149,837 156,784
    Stockholders’ equity
    Common stock and additional paid-in capital 528,042 536,150
    Treasury stock (17,064 ) (20,055 )
    Accumulated other comprehensive income 59 53
    Accumulated deficit (70,771 ) (72,613 )
    Total stockholders’ equity 440,266 443,535
    Total liabilities, convertible preferred stock and stockholders’ equity $ 590,103 $ 600,319
    Demand Media, Inc. and Subsidiaries

    Unaudited Condensed Consolidated Statements of Cash Flows

    (In thousands)
    Three months ended March 31,
    2011 2012
    Cash flows from operating activities:
    Net loss $ (5,582 ) $ (1,842 )
    Adjustments to reconcile net loss to net cash provided by operating activities:
    Depreciation and amortization 15,212 16,920
    Stock-based compensation 8,836 7,391
    Other 855 (1,420 )
    Net change in operating assets and liabilities, net of effect of acquisitions (101 ) (2,571 )
    Net cash provided by operating activities 19,220 18,478
    Cash flows from investing activities:
    Purchases of property and equipment (5,084 ) (4,321 )
    Purchases of intangibles (14,204 ) (2,703 )
    Cash paid for acquisitions (3,839 ) (243 )
    Net cash used in investing activities (23,127 ) (7,267 )
    Cash flows from financing activities:
    Proceeds from issuance of common stock, net 78,874 —
    Repurchases of common stock — (2,990 )
    Proceeds from exercises of stock options and contributions to ESPP 851 2,115
    Other (108 ) (796 )
    Net cash provided by (used in) financing activities 79,617 (1,671 )
    Effect of foreign currency on cash and cash equivalents 8 (7 )
    Change in cash and cash equivalents 75,718 9,533
    Cash and cash equivalents, beginning of period 32,338 86,035
    Cash and cash equivalents, end of period $ 108,056 $ 95,568
    Demand Media, Inc. and Subsidiaries

    Reconciliations of Non-GAAP Measures to Unaudited Consolidated Statements of Operations

    (In thousands, except per share amounts)
    Three months ended March 31,
    2011 2012
    Revenue ex-TAC:
    Content & Media revenue $ 51,852 $ 53,963
    Less: traffic acquisition costs (TAC) (3,190 ) (3,379 )
    Content & Media Revenue ex-TAC 48,662 50,584
    Registrar revenue 27,671 32,271
    Total Revenue ex-TAC $ 76,333 $ 82,855
    Adjusted EBITDA(1):
    Net loss $ (5,582 ) $ (1,842 )
    Income tax expense/(benefit) 1,013 (1,195 )
    Interest and other expense, net 377 141
    Depreciation and amortization(2) 15,212 16,920
    Stock-based compensation 8,927 7,391
    Acquisition and realignment costs(3) 133 61
    gTLD expense(4) — 429
    Adjusted EBITDA $ 20,080 $ 21,905
    Discretionary and Total Free Cash Flow:
    Net cash provided by operating activities $ 19,220 $ 18,478
    Purchases of property and equipment (5,084 ) (4,321 )
    gTLD expense cash flows(4) — 314
    Discretionary Free Cash Flow 14,136 14,471
    Purchases of intangible assets (14,204 ) (2,703 )
    Free Cash Flow $ (68 ) $ 11,768
    Adjusted Net Income:
    GAAP net income (loss) $ (5,582 ) $ (1,842 )
    (a) Stock-based compensation 8,927 7,391
    (b) Amortization of intangible assets – M&A 3,733 2,929
    (c) Content intangible assets removed from service(2) — 1,818
    (d) Acquisition and realignment costs(3) 133 61
    (e) gTLD expense(4) — 429
    (f) Income tax effect of items (a) – (e) & application of 38% statutory tax rate to pre-tax income (2,112 ) (4,840 )
    Adjusted Net Income $ 5,099 $ 5,946
    Non-GAAP Adjusted Net Income per share – diluted $ 0.06 $ 0.07
    Shares used to calculate non-GAAP Adjusted Net Income per share – diluted (5) 89,861 85,540
    (1) Effective Q1 2012, the Company is reporting Adjusted EBITDA instead of Adjusted OIBDA. While the dollar value of each measure does not differ, a comparison of the historical reconciliation of both measures is provided in our supplemental financial schedules posted on our investor relations site.
    (2) In conjunction with its previously announced plans to improve its content creation and distribution platform, the Company elected to remove certain content assets from service, resulting in $1.8 million of accelerated amortization expense in the first quarter of 2012.
    (3) Acquisition and realignment costs include non-cash purchase accounting adjustments, acquisition-related legal and accounting professional fees and employee severance payments attributable to corporate realignment activities. Management does not consider these costs to be indicative of the Company’s core operating results.
    (4) Comprises formation expenses directly related to the Company’s gTLDs initiative that is not expected to generate associated revenue in 2012.
    (5) Shares used to calculate non-GAAP Adjusted Net Income per share – diluted include the weighted average common stock and restricted stock for the periods presented and all dilutive common stock equivalent at each period. Amounts have been adjusted in 2011 to reflect the revised capital structure following the Company’s initial public offering which was completed on January 31, 2011, whereby the Company issued 5,175 shares of common stock and converted certain warrants and all of the convertible preferred stock into 62,155 shares of common stock as if those transactions were consummated on January 1, 2011.
    Demand Media, Inc. and Subsidiaries

    Unaudited GAAP Revenue, by Revenue Source

    (In thousands)
    Three months ended March 31,
    2011 2012
    Content & Media:
    Owned and operated websites $ 40,524 $ 39,348
    Network of customer websites   11,328   14,615
    Total revenue – Content & Media   51,852   53,963
    Registrar   27,671   32,271
    Total revenue $ 79,523 $ 86,234
    Three months ended March 31,
    2011 2012
    Content & Media:
    Owned and operated websites   51 %   46 %
    Network of customer websites   14 %   17 %
    Total revenue – Content & Media   65 %   63 %
    Registrar   35 %   37 %
    Total revenue   100 %   100 %

     

    Source: Demand Media, Inc.

  • ICANN System for New gTLDs Still Down

    It was recently reported that The Internet Corporation for Assigned Names and Numbers’ (ICANN) system for submitting applications for new generic top-level domains (gTLDs) has been down as of late, and now ICANN engineers are saying that it will be at least another week before the system is back online.

    The application platform, called TLD application system (TAS), was taken down after a glitch was reported which allowed applicants to see each other’s user names and file names. ICANN set April 12th as the last day to submit applications before taking the system offline, after its board of directors approved an increase of the number of gTLDs from the current amount of 22 last June. ICANN Chief Operating Officer Akram Atallah comments on the latest postponement – “No later than April 27, 2012 – we will provide an update on the reopening of the system and the publication of the applied-for new domain names.”

    ICANN head of media relations and chief security officer Jeff “The Dark Tangent” Moss adds, “Under certain circumstances that were hard to replicate users that had previously deleted files could end up seeing file names of users that had uploaded a file. Certain data was being revealed to users that were not seeking data, it was just showing up on their screen.”

    The Dark Tangent goes on to say, “We’re putting everyone on notice: we know what file names and user names were displayed to what people who were logged in and when. We want to do this very publicly because we want to prevent any monkey business. We are able to reconstruct what file names and user names were displayed.”

    So, ICANN is still fixing the glitch, and wants everyone to know that it has its eye on them. Check back soon for an update.

  • ICANN System for New gTLDs Still Offline

    ICANN System for New gTLDs Still Offline

    The Internet Corporation for Assigned Names and Numbers’ system for submitting applications for new generic top-level domains (gTLDs) has been down for almost a week, and ICANN is not yet sure when it will be back online.

    The application platform, called TLD application system (TAS), was taken down after a glitch was reported which allowed applicants to see each other’s user names and file names. ICANN set April 12th as the last day to submit applications before taking the system offline, after its board of directors approved an increase of the number of gTLDs from the current amount of 22 last June. ICANN had said it would publish an updated list of domain names applied for no later than Friday.

    ICANN COO Akram Atallah had said, “We will update the target date for publication as part of our update on the timing of the reopening, no later than Friday, 20 April at 23.59 UTC,” in response to organizations seeking a list of applied-for domain names, which was initially set for April 30th. Now ICANN is saying that April 20th is no longer feasible, and is not exactly sure when the system will be back up. Regarding the technical issue affecting the system, Atallah states that there was a problem with how the TAS “handled interrupted deletions of file attachments.” ICANN is investigating an effective solution, as well as logging which applicants’ information became visible, and who saw what. After going over customer service tickets, ICANN says it is apparent that the problem began on March 19th.

    The ability to create new TLDs via ICANN’s plan has come under fire from trademark holders, citing that it will be difficult to protect their content amidst a new influx of domains.