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Username: David Coombs
Date/Time: Fri, November 3, 2000 at 12:03 AM GMT
Browser: Microsoft Internet Explorer V5.01 using Windows NT 5.0
Score: 5
Subject: Registry fee, redux

Message:
 

 
               
      Chris,

      As you probably know from my previous posts, I feel IODesigns registry fee is excessive.  As George Bush would say, I respectfully submit that you practiced some fuzzy math in your above post.  Your post said "I might point out that the roughly $6 price as proposed by Afilias shows, in their financial projections, as a loss for the first 4 years. How, I ask, can they run their registry at such a loss?"

      Now, I am certainly not saying I think Afilias should be granted the gTLD ".web" (in fact, my personal opinion is the internet would be better served with more 'targeted' TLD's than adding new truly generic gTLD's, but that's another story).  My issue with your statement is from a true financing picture.  You ask how can Afilias afford to run the registry at a loss for 4 years, it is because it is a book loss, not a real loss.  To illustrate my point, if you look at page 18 of the linked Exhibit C of Afilias Application (the Cash Flow Statement), it shows that even at the 90% confidence level (where they are showing the losses to which you refer), they are basically cash flow even from operations for the first two years and beginning in year 3 they start making a killing.

      Now my guess is, even though you are more of a tech guy, you have enough experience to understand the way it works, but the layman cause for this for any other interested reader of this post is that the registry receives these payments in advance (and the terms are anywhere from 1 to 10 years), it is more appropriate to look at the cash flow statement than the income statement for these types of companies.

Regards,
David

     
 


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