Tucows 2012 Annual Report Download - page 36

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31
.net to $5.62. The management fee provides our resellers with access to our provisioning and management tools to
enable them to register and administer domain names and access to additional services like WHOIS privacy and DNS
services, enhanced domain name suggestion tools and access to our premium domain names. We earn fees in connection
with each new, renewed and transferred-in registration and from providing provisioning services to resellers and
registrars on a monthly basis. Domain registrations are generally purchased for terms of one to ten years, with a majority
having a one-year term.
Wholesale – OpenSRS Value-Added Services
We derive revenue from our hosted email service through our global distribution network. Our hosted email
service is offered on a per account, per month basis, and provides resellers with a reliable, scalable “white label” hosted
email solution that can be customized to their branding and business model requirements. The hosted email service also
includes spam and virus filtering on all accounts. End-users can access the hosted email service via a full-featured,
multi-language AJAX-enabled web interface or through traditional desktop email clients, such as Microsoft Outlook or
Apple Mail, using IMAP or POP/SMTP.
We also derive revenue from other Value-Added Services primarily from provisioning SSL and other trust
certificates. In addition, we derive revenue from the bulk sale of domain names and advertising from the OpenSRS
Domain Expiry Stream.
Other services included in Value-Added Services include web publishing tools, special discounts on 3rd party
services and fees we receive from time-to-time from vendors to expand or maintain the market position for their
services. In addition, we provide billing, provisioning and customer care software solutions to ISPs through our Platypus
billing software.
Retail – Hover
We derive revenues from Hover's sale of retail Internet domain name registration and email services to
individuals and small businesses.
Retail - Ting
We derive revenue from Ting's sale of retail mobile phones and 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 or lease. 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”).
Our parked page vendor relationships may not continue to generate levels of revenue commensurate with what
we have achieved during past periods. Our ability to generate online advertising revenue from parked page vendors
depends on their advertising networks' assessment of the quality and performance characteristics of Internet traffic
resulting from online advertisements rendered on their websites. We have no control over any of these quality
assessments. Parked page vendors may from time to time change their existing, or establish new, methodologies and
metrics for valuing the quality of Internet traffic and delivering pay-per-click advertisements. Any changes in these
methodologies, metrics and advertising technology platforms could decrease the amount of revenue that we generate
from online advertisements. In addition, parked page vendors may at any time change or suspend the nature of the
service that they provide to online advertisers. These types of changes or suspensions would adversely impact our ability
to generate revenue from pay-per-click advertising.
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