Following recent industry developments and regulatory changes, CentralNic expects, by virtue of its contracts and relationships, to benefit from a major expansion in the number of generic top level domains (“gTLDs”) such as .wiki and .college, which are expected to be operating from the end of 2013. CentralNic has been contracted as the Registry Service Provider for 60 applications for new gTLDs.
This existing business has already proven to be profitable and cash-generative, as its characteristics include:
- Revenues are received in advance, often for multiple years;
- Most of the top 50 registrars (by domains under management) maintain a credit balance with CentralNic, which is automatically topped up;
- The actual domain name inventory is created automatically at the time of purchase, so there are no cost of sales or inventory holding costs; and
- To retain their domain names, website owners are required to pay periodic renewal fees, creating an annuity income for CentralNic.
The Company has a four pronged expansion strategy:
- Increasing volumes through provision of core registry services;
- Investment in new gTLDs;
- Investment in Registrar business; and,
- Developing Markets
CentralNic has also identified opportunities to add to its domain portfolio by winning government contracts to operate country codes for developing nations, particularly in Africa. These ccTLDs can be distributed globally via CentralNic’s retail network, as well as serving the populations of the domestic emerging markets where internet penetration is just starting to explode.
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