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Username: cyber-cynic
Date/Time: Thu, November 2, 2000 at 11:58 PM GMT
Browser: Microsoft Internet Explorer V5.0 using Windows 98
Score: 5
Subject: Glowining Financials


IOD's application shows a glowing set of financials, no not theirs - the financial projections for .web.

How so? well if you take their proposed charge of $15 registry fee, oh and don't in the first year they plan to keep the $20 registrar fee for themselves too, that makes $35 per registration multiplied by the potential demand then of course you will you will show good projected cash-flows.

Here are the NET values for year 2001 (90% Confidence model) :

Q1 : $472K   Q2 : $2,050K   Q3 : $2,886K   Q4 : $3,761K

Annual : $9,168,000.00

That is 9 million bucks after operating expenses in year1! incredible, oh and lets not forget that is after blowing 12 million on advertising in the year.

Why do I raise this, well most business ventures are such that one is required to spend capital in the first few years, and if your business model is sound, you will gradually recoup your investment until you break-even and ultimately move into profitability.

To me this business model reeks of day-light robbery, and why? - I do have a theory, whom others will strenuously deny I am sure, but then again it is just a theory.

It is based on the premise that IOD does not have very deep pockets and is seriously under-financed and it basically needs to charge a high fee to survive, which could also be the reason they are proposing to defer allowing 3rd party registrars untils year 2 sothat they can collect $35 instead of $15.

Yes but they have about half a million in the bank plus 2 million in credit lines - so what? I say. There are a few things you must not forget. These guys are not as "ready to go" as many believe. Just read their application it says so. They have to move, they have to upgrade equipment get more staff etc etc. So the half a million goes on new equipment and as cash burn goes with .coms or .webs in this case 2 million is nothing, it is 2 month's worth of advertising.

If close to the start of year 2 you hear mumblings of there are "technical reasons" why the introduction of 3rd party registrars has to be deferred .... just draw your own conclusions.

Just look at the numbers and remember this - this model makes the IOD shareholders millionaires in year one - that to me is lining the pockets of a few and not serving the public interest.

Hell, they will be making so much money, they even plan to buy their own name servers - since when is this a requirement to operate a registry.

Anyhow I have a sneaky suspicion IOD will lose it's bid for .web based on weak financials, which are unfortunately not posted for review.


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