Tucows made a significant move in the domain industry by acquiring eNom from Rightside in an $83.5 million deal. This acquisition will consolidate two major domain name reseller platforms, eNom, and OpenSRS. With this transaction, Tucows will gain control of 14.5 million domain names under management and integrate 28,000 active resellers.
For Rightside, this deal leaves them with a transformed business landscape, as eNom contributed a significant portion of its revenue, accounting for 72% of its earnings in the first three quarters of 2016. Following the sale of eNom, Rightside will focus on its new top-level domain names, second-level domains, Name.com, and a stake in NameJet, which is a joint venture with Web.com.
Before the acquisition, Rightside’s market capitalization stood at $158 million. The sale of eNom, coupled with the potential growth challenges in the new top-level domain market, raises questions about the company’s future as a public entity. Notably, investor J. Carlo Cannell had previously advocated for a shift away from the new top-level domain portfolio, a move that contrasts with the company’s current direction.
The eNom business, while substantial, operated on thin profit margins and relied heavily on key partnerships, notably with Namecheap, which managed 28% of the domains under eNom’s oversight. The acquisition by Tucows signals a strategic shift in the domain reseller landscape and raises questions about the future trajectory of the industry.
Following the deal, industry experts and shareholders are closely watching the implications of this transaction. The move by Tucows to consolidate domain reseller platforms signifies a strategic play in the evolving domain industry, where competition and market dynamics continue to shape the landscape.
As the domain industry undergoes significant shifts and realignments, the Tucows acquisition of eNom from Rightside marks a pivotal moment in the domain reseller market. With key players making strategic moves, the domain industry is poised for further evolution and transformation in the coming years.
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