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Username: Register ORGanization
Date/Time: Mon, July 29, 2002 at 10:49 PM GMT
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Subject: Financial Information for RegisterOrg bid


a. I'd like each bidder to identify the funds that they are relying on for the transition. Do you have money in the bank set aside or are you relying on the third party partners or money from capital markets for the transition?

Following capitalisation from its parent company,, RegisterOrg has $10 million in cash currently in the bank, and can therefore finance the transition without reliance on third party partners or money from capital markets.  Consequently, RegisterOrg is uniquely situated in that it has the funding to work continuously towards transitioning the Registry on January 1, 2003.  The delay in awarding the .org contract that ICANN announced last week makes financial stability of the successful applicant even more critical as it may be necessary to shorten project times and inevitably this will lead to potentially higher costs.  This type of contingency was allowed for when we capitalized the company.

There will be very little time for the successful bidder to “ramp up’ prior to the December 31st transfer from VeriSign.  RegisterOrg has the financial resources as well as the experience and the technology to meet that challenge.  Moreover, with the current uncertainties in the economy, RegisterOrg has the financial stability to make a firm and lasting commitment beyond the transition, to assure the growth and vitality of the .org domain in the long run.

b. To what extent does your financing for the transition depend on timely receipt of all or part of the Verisign endowment? What are your plans for alternative financing if a dispute or a delay arises in the transfer of those funds?

RegisterOrg’s bid does not rely in any manner on the VeriSign endowment.  RegisterOrg intends to finance the transition exclusively from its $10 million in cash resources.  We can manage a successful transition without being jeopardized by any delays or objections from VeriSign.

c. Are you financially prepared to deal with unforeseen costs that might arise in the transition, particularly those related to the technical operation of the registry?

Yes.  RegisterOrg’s budget is based on our substantial experience in operating and transitioning registries.  We believe we have accurately assessed the start-up costs, and identified the potential for unforeseen costs.  RegisterOrg has taken a cautious approach in estimating the necessary capitalization for running the .org Registry, without sacrificing its investment in services intended to benefit the .org community.  While we have been cautious in our business planning, we think this it essential to have high funding to guarantee stability and growth.  Indeed, we believe that the ultimate operator of .org should be able to demonstrate capitalization close to the $10 million level.

Already, the potential costs to bidders are increasing since ICANN’s recent decision to delay awarding the bid for one month.  For many bidders, the additional costs associated with a compressed timeline for conducting the transition activities may prove to be too much for their limited budgets.  We believe that RegisterOrg’s $10 million cash commitment is more than sufficient to cover the transition period, including unforeseen expenses such as delays, and still fully fund a vigorous marketing strategy and outreach to the .org community that are critical to the growth of domain.

d. Are you financially prepared to deal with lower than expected numbers of new names being purchased/registrants renewing. What tolerances do you have in your cash projections before being forced to seek further funding?

Many bidders have, in our estimation, been overly optimistic with respect to time lines for generating revenue and forecasting expenditures for implementing the transition. Whilst we have significant plans to expand and revitalize the .org Registry, we are also mindful that there is no guarantee in registrant numbers, either at handover or thereafter. Beyond anything else, the new operator must be able to prove financial stability no matter what the scenario.  Accordingly, RegisterOrg constructed its bid under the assumption that the operation of the .org domain would generate NO CASH REVENUE FOR SIX MONTHS and that the number of Registrants would continue to decline in the first year of operation.  Our parent company,, which has more than $200 million in cash and cash equivalents, is fully committed to supporting RegisterOrg as necessary to successfully transition the Registry and grow the .org domain.  Therefore, in the unlikely event that unforeseen circumstances result in cash outflows that exceed $10 million, RegisterOrg would not need to rely on capital markets or outside funders to fulfill its obligations to the .org community.

I'm also concerned about the stability of the .org registry if it goes to a bidder that is relying in substantial part on the Verisign endowment for funding. How solid is the commitment from Verisign to turn over the money? I understand that there is a signed agreement between Verisign and ICANN with respect to the endowment, but what are the remedies if Verisign delays or receives a waiver on the agreement?  And most important, do the bidders relying on the endowment have the resources to function in the meantime as well as to engage in a legal dispute and perhaps protracted litigation?

It is difficult to speculate on the status of the VeriSign endowment and if and when such payment would be made to the new registry operator.  Nevertheless, as we set out in response to questions c. and d. above, RegisterOrg has the financial capacity to operate throughout the transition phase and beyond, and will not rely in any manner on the VeriSign endowment.   We believe that this financial “self sufficiency” is critical to the stable and successful redelegatation of .org.  

Jonathan Wales
Register Organization Inc.
575 Eighth Avenue
15th Floor
New York, NY 10018
+44 207 460 4060


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