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Username: Ray
Date/Time: Tue, October 17, 2000 at 4:15 AM GMT
Browser: AOL Browser V5.0 using Windows 95
Score: 5
Subject: Financial Conclusions....


                Look, as stated in my previous post in quite detail, Afilias has made an application where they are forecasting a loss position in the 90% to 50% confidence levels.

For-profit entities can not operate as an ongoing concern if consistently in a loss position.  Thus, two issues are clear:

1) the application, if accepted, will have to be altered later thus making its original acceptance pretty ridiculous.  I would have to think that Afilias believes they would be allowed to do this.  But I do not see anywhere in ICANN's application description a clause stating that the application may be modified once in operation due to poor, but expected, financial results.

2) if the application is accepted and the new registry is indeed forced to honor it's application commitments by ICANN thus suffering mounting net losses, then does not the ongoing stability of the internet as it relates to this registry come into question?  It's a reasonable question.

Has the Afilias management team really submitted an application where they are hoping that the 10% confidence level is what will come to fruition - as this is the only scenario they are forecasting to be profitable?

.....and I have not even mentioned the fact that 50% of year 1 revenues must be deferred to year 2 due to the initial registration period being a minimum of 2 years.

I am looking for sound business answers here regarding the projected financial performance of the Afilias application.....If there are none, I suggest Affilias quickly re-think and re-submit their marketing strategy and expenditures as a % to revenues.  And if they do this, they better re-think their revenues as they are depending upon market penetration to drive the volume of registrations. 

Or increase the unit price they plan to have the registry charge their registrars.  From what I can see, a unit increase to $6.75 should about cover it (or atleast give the thing a fighting chance from a profitability standpoint).

And I do not want to hear about 'other services' that may be revenue generating.  For the long term stability of the internet, the registry operation needs to be able to stand on its own.




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