Tucows 2014 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2014 Tucows annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 202

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202

We receive revenues for each domain registration or other Internet service processed through our system by
Service Providers. Our domain service revenue is principally comprised of registration fees charged to resellers in
connection with new, renewed and transferred domain name registrations. The registration 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. Payments for the full term of all services,
or billed revenue, are received at the time of activation of service and where appropriate are recorded as deferred revenue
and are recognized as earned ratably over the term of provision of service. This accounting treatment reasonably
approximates a recognition pattern that corresponds with the provision of the services during the quarters and the year.
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 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 certificates. In
addition, we derive revenue from the bulk sale of domain names and advertising from the OpenSRS Domain Expiry
Stream.
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.
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.
Page 68 of 20
2
tcx20141231_10k.ht
m
9
/
13
/
201
6
https://www.sec.gov/Archives/edgar/data/909494/000143774915004707/tcx20141231_10...