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Demand Media mulls eNom spin-off

Kevin Murphy, February 20, 2013, 08:59:31 (UTC), Domain Registrars

Are the synergies between domain name registrars and content farms not all they were cracked up to be?

That’s a question emerging from last night’s news that Demand Media is planning to spin off its domains business, which includes number-two registrar eNom, into a separate public company.

The company, reporting its fourth-quarter earnings, said that it’s looking into the possibility of breaking up content and domains into two separately-owned businesses.

The new domain company would comprise eNom (wholesale) and Name.com (retail) on the registrar side, any new gTLDs Demand manages to win, the formative registry back-end business, and its stake in NameJet.

“We believe that a separation of the two independent companies will better position each business to pursue their increasingly diverse strategic priorities and opportunities,” CEO Richard Rosenblatt told analysts.

The spin-off would have revenue of over $150 million a year and margins of almost 20%, chief financial officer Mel Tang added.

Rosenblatt said new gTLDs will be “transformative” for the domain industry, saying that Google, Amazon and dot-brands will help grow consumer awareness of the world beyond .com.

Demand has filed 26 new gTLD applications of its own, and has 50-50 rights to 107 more with Donuts.

Previously, Demand has stated in regulatory filings that it used data gathered from domain name lookups to create ideas for the content farm side of its business. It’s not clear if that would continue after a split.

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