Tucows 2015 Annual Report Download - page 10

Retail – Hover
We derive revenues from Hover's sale of retail Internet domain name registration and email services to
individuals and small businesses.
Portfolio
We derive revenue from our portfolio of domain names by displaying advertising on the domains and by making
them available for sale. When a user types one of these domain names into a web browser, they are presented with
dynamically generated links that are pay-per-click advertising. Every time a user clicks on one of these links, it generates
revenue for us through our partnership with third-parties who provide syndicated pay-per-click advertising (“parked page
vendors”).
Portfolio names are sold through our premium domain name service, auctions or in negotiated sales. The size of
our domain name portfolio varies over time, as we acquire and sell domains on a regular basis to maximize the overall
value and revenue generation potential of our portfolio. In evaluating names for sale, we consider the potential foregone
revenue from pay-per-click advertising, as well as other factors. The name will be offered for sale if, based on our
evaluation, the name is deemed non-essential to our business and management believes that deriving proceeds from the
sale is strategically more beneficial to the Company. In addition, we generate revenue from the payments for the sale of
rights to gTLD strings under ICANN’s New gTLD Program.
Portfolio names that have been acquired from third-parties or through acquisition are included as intangible assets
with indefinite lives on our consolidated balance sheet.
For information about geographic areas, see “Note 18 – Segment information” in the Notes to Consolidated
Financial Statements included in Part II, Item 8 of this Annual Report
Intellectual Property
We believe that we are well positioned in the wholesale domain registration and email markets due in part to our
highly-recognized “Tucows” and “OpenSRS” brands and the respect they confer on us as a defender of end-user rights and
reseller-friendly approaches to doing business. We were among the first group of 34 registrars to be accredited by ICANN
in 1999, and we remain active in Internet governance issues.
Our success and ability to compete depend on our ability to develop and maintain the proprietary aspects of our
brand name and technology. We rely on a combination of trademark, trade secret and copyright laws, as well as contractual
restrictions to protect our intellectual property rights.
We have registered the Tucows trademark in the United States, Canada and the European Union and we register
additional service marks and trademarks as appropriate and where such protection is available.
We seek to limit disclosure of our intellectual property by requiring all employees and consultants with access to
our proprietary information to commit to confidentiality, non-disclosure and work-for-hire agreements. All of our
employees are required to sign confidentiality and non-use agreements, which provide that any rights they may have in
copyrightable works or patentable technologies accrue to us. Before entering into discussions with potential vendors and
partners about our business and technologies, we require them to enter into a non-disclosure agreement. If these
discussions result in a license or other business relationship, we also generally require that the agreement containing the
parties’ rights and obligations include provisions for the protection of its intellectual property rights.
Customers
The majority of the customers to whom we provide reseller services are generally either web hosts or ISPs. A
small number are consultants and designers providing our services to their business clients. Both our Retail Domain
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