Tucows 2012 Annual Report Download - page 7

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2
Net Revenues
Wholesale - OpenSRS Domain Service
Historically, our OpenSRS Domain Service has constituted the largest portion of our business and encompasses
all of our services as an accredited registrar related to the registration, renewal, transfer and management of domain
names. In addition, this service fuels other revenue categories as it often is the initial service for which a reseller will
engage us, enabling us to follow on with other services and allowing us to add to our portfolio by purchasing names
registered through us upon their expiration.
With the acquisition of EPAG Domainservices GmbH (“EPAG”) in August 2011, we now offer registration
services for over 200 TLDs.
With respect to the sale of domain registrations, our pricing structure for domain names provides visibility into
the various fees that make up the cost of a domain name by breaking out the cost of the registry and ICANN fees
separately from our management fee. Effective January 2012, registry fees for the .com and .net registrations were
increased by the registry to $7.85 and $5.11, respectively. In November 2012 Verisign renewed its agreement with
ICANN to serve as the authoritative registry operator for the .com registry until November 2018. Under the terms of the
renewal, Verisign agreed to continue the current pricing of $7.85 per domain name registration throughout the term of
the agreement and in December 2012, announced their intention, effective July 1, 2013, to increase the registry fee for
.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.