Enom 2013 Annual Report Download - page 9

Registrar Services
—Retail
Our flagship retail registrar brand, Name.com, provides registration services to consumers and businesses around the world and is widely
recognized for its outstanding customer support. We acquired Name.com in December 2012 in order to expand our retail business and provide a
comprehensive platform for marketing and distributing the new gTLDs. Name.com and our other retail registrar brands have more than
2 million
domain names under management and more than 225,000 customers. The services that are provided on a monthly or annual subscription basis
by our retail registrar include:
Registry Services
During 2012 we submitted gTLD registry applications to ICANN under the New gTLD Program through our subsidiary, United TLD
Holdco Limited, t/a Rightside Registry (“Rightside Registry”). In addition, we entered into a strategic collaboration agreement with Donuts Inc.
(“Donuts”), the company that submitted the largest number of new gTLD applications, pursuant to which we share equal rights to an additional
group of new gTLD applications. We currently have registry operator agreements with ICANN for the following 21 new gTLDs: .Actor,
.Airforce, .Army, .Consulting, .Dance, .Democrat, .Engineer, .Futbol, .Gives, .Haus, .Immobilien, .Kaufen, .Moda, .Navy, .Ninja, .Pub, .Rehab,
.Republican, .Reviews, .Rocks and .Social, and we launched our first seven new gTLDs, .Dance, .Democrat, .Futbol,.Immobilien, .Ninja,
.Reviews and .Social, into the marketplace in the first quarter of 2014. We also have an interest in 7 active applications made directly by
Rightside Registry and 85 active applications or registry operator agreements through our strategic alliance with Donuts. Additionally, we have
entered into a registry services agreement to provide registry back-end services to Donuts. For the year ended December 31, 2013, we incurred
approximately $8.4 million of formation expenses in connection with our investment in the new gTLD initiative.
Eleven of the gTLDs for which we have registry operator agreements have been delegated to us and inserted into the authoritative
database for the Internet, known as the “Root Zone.” The launch of each new gTLD is governed by an ICANN-coordinated process that
delegates new gTLDs according to a randomly assigned prioritization number. All of the pending applications filed by Rightside Registry or
Donuts have passed ICANN’s initial evaluation process and are progressing through the later stages of ICANN’s process for contractually
awarding and delegating gTLD operating rights. We are still in competition with other third-party applicants for many of these new gTLDs.
We will operate a registry for each gTLD that is delegated to us by ICANN under the New gTLD Program. Each of these registries
provides the system of record for every domain name associated with its respective gTLD and will distribute the domain names to registrants
exclusively through accredited registrars and their resellers. We have entered into registrar agreements wi th more than 40 leading registrars
enabling each of these registrars to provide domain name services for our portfolio of new gTLDs. Each registry establishes wholesale pricing
for its domain names, which are then priced by the registrar for sale to its customers. As part of the contracting process, registrars are technically
certified and financially qualified. The registry operator agreement with ICANN to operate a registry has a ten-year term with a presumptive
right of renewal.
Domain names are registered to customers on a subscription basis, with initial registration terms lasting from one to ten years. The full
cost of the registration fee is collected up front and recognized ratably over the life of the registration. At the end of the subscription te rm,
renewals are typically sold for the same annual wholesale price as the initial registration. Certain premium domain names have higher initial
registration prices—which may be achieved through buy-it-now, auction or offer/counter-offer pricing mechanisms. The renewal price of a
premium domain name is expected to be lower than its initial registration price.
We have developed a proprietary technology platform that provides the high-availability services associated with the registration of
domain names for each of our new gTLDs. The platform makes it easy for registrars to sell and service domain names associated with our
gTLDs. We have also developed attractive and innovative services such as the Domain Protected Marks List (“DPML”), which is a trademark
rights protection mechanism that prevents the registration of second level domain names containing a string of letters matching a registered
trademark. The DPML service or “block” feature works across multiple gTLDs of participating registries.
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Domain Name Look
-up and Registration : We offer our customers the ability to easily search for, register and renew domain names.
Users can search for
and identify an available domain name that best fits their needs, and in just a few clicks can claim and register the
name. In addition, we offer customers the ability to transfer the registration of domain names to us from other registrars using our
automated domain name transfer service. If a domain name is currently unavailable, customers can pre-order the domain name to the
extent that it becomes available in the future.
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Value-Added Services: In addition to domain name registration services, we also offer a number of other products and services
designed to help our customers easily develop, enhance and protect their domain names, including identification protection services
that help keep domain owners' information private through our ID Protect service; customizable email accounts that allow customers
to set up and manage multiple mailboxes associated with a domain name; website builder tools to help customers easily create a
professional looking web presence; web-hosting plans for deploying and maintaining web applications; and third-party website
security services, such as SSL certificates.