News / May 2010

Celebrating the Domain Pioneers at the .com Gala

Last night in San Francisco, California, VeriSign celebrated the .com 25 – the people and companies that, over the past 25 years, helped shape the web as we know it. This was part of the 25YearsOf.com celebration. In addition to the .com 25, Verisign also recognized a select group of Domain Pioneers. We’re proud that Tucows, and Elliot Noss, Tucows President and CEO, were on that select list of those recognized as pioneering people and companies in the domain name space.

VeriSign visited our Toronto offices a few weeks back to give Elliot the opportunity to talk about how the Internet has impacted his life, and about where he sees things heading in the future:

The Internet is people

Look back all the way back to 1994, when Tucows.com software library launched in Flint, Michigan, you’ll see that there was a focus within Tucows around the idea that the Internet is made up not of wires and routers, but of people.

Tucows.com used a network of thousands and thousands of mirrors – mostly Internet Service Providers – who provided a local copy of the Tucows software library to their customers as an additional feature on top of an Internet connection. In 1999 Tucows extended this network of relationships by adding domain name registrations to the mix through OpenSRS. We leveraged the existing relationships that we had in the Tucows network to build out a global network of domain sellers who used the OpenSRS backend to power sales and management of domain names to their customers.

These days much is made of Web 2.0 and the social qualities of the Internet. But the truth is that the Internet has always been a synergy of technology and people. Without the physical interconnections, the Internet wouldn’t exist and conversely, without the Internet, many of these social connections wouldn’t be possible.

What was originally a way to connect computer networks to computer networks quickly morphed into a way to interconnect the billions of people on planet earth with each other at the speed of light. Mobile, ubiquitous Internet access leads to a more social Internet which empowers people through the Internet.

This generation of kids who grew up with the Internet have come to expect to be able to access it on demand, wherever they might be. They forge relationships with each other via the web, they communicate via the web and they seem to be constantly connected to each other via the web.

Much thanks goes to VeriSign for putting together the 25YearsOf.com initiative. We’re honoured to be recognized as part of this select group of Pioneers. It’s a testament to vision that both Elliot and Tucows as a whole share–that the Internet is more than a vast physical network but that it is an extension, and an extender of social interactions between people that makes the world wide web so incredible and powerful.

Tucows Inc. reports financial results for first quarter 2010

TORONTO, May 12 – Tucows Inc. (NYSE AMEX:TCX, TSX:TC), a global provider of domain names, email and other Internet services, today reported its financial results for the first quarter ended March 31, 2010. All figures are in U.S. dollars.

 
                          Summary Financial Results
         (Numbers in Thousands of US Dollars, Except Per Share Data)
 
                                               3 Months Ended  3 Months Ended
                                                   Mar. 31,       Mar. 31,
                                                     2010           2009
                                                  (unaudited)    (unaudited)
 
    Net Revenue                                        20,445         20,091
    Net Income (Loss)                                     569          1,028
    Net Income (Loss)/Share                              0.01           0.01
    Cash Flow from Operations                           1,379            913
 
 
         Summary of Revenue and Cost of Revenue before Network Costs
                     (Numbers in Thousands of US Dollars)
 
                                      Revenue             Cost of Revenue
 
                             3 Months     3 Months     3 Months    3 Months
                               Ended        Ended        Ended       Ended
                              Mar. 31,     Mar. 31,     Mar. 31,    Mar. 31,
                                2010         2009         2010        2009
                            (unaudited)  (unaudited)  (unaudited) (unaudited)
    OpenSRS:
    Domain Services            15,403       14,202       12,616       11,355
    Email Services                638        1,122          107          180
    Other Services              1,094        1,094          387          389
    -------------------------------------------------------------------------
    Total OpenSRS Services     17,135       16,418       13,110       11,924
 
    YummyNames                  1,711        1,865          203          185
    Hover                       1,130        1,301          400          513
    Butterscotch                  469          507           19            7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total                      20,445       20,091       13,732       12,629

“Our results for the first quarter of fiscal 2010 underscore the consistency in our business, anchored by the OpenSRS Domain Service, which grew 9% year-over-year in both transactions and revenue,” said Elliot Noss, President and CEO of Tucows. “We are experiencing growth both in the number of new OpenSRS customers as well as the speed at which these customers roll our service out to their customers. Our ability to consistently and reliably generate cash flow from operations continues to support our ability to return capital to our shareholders. Since implementing our open market share purchase program in February 2010, we have repurchased an additional 956,000 shares, and since the beginning of the year we have repurchased a total of 7.3 million shares, or 11% of our total shares outstanding as of the end of 2009.”

Net revenue for the first quarter of 2010 increased 1.8% to $20.4 million from $20.1 million for the first quarter of 2009.

Net income for the first quarter of 2010 was $0.6 million, or $0.01 per share, compared with $1.0 million, or $0.01 per share, for the first quarter of 2009. Net income for the first quarter of 2010 benefitted from a pre-tax gain on foreign exchange of $0.7 million (inclusive of a mark-to-market gain of $0.1 million) compared to a pre-tax loss on foreign exchange of $0.7 million (inclusive of a mark-to-market gain of $0.1 million) for the first quarter of 2009.

Deferred revenue at the end of the first quarter of fiscal 2010 was $59.5 million, an increase of 5.1% from $56.7 million at the end of the first quarter of fiscal 2009 and an increase of 5.7% from $56.3 million at the end of the fourth quarter of fiscal 2009.

Cash and cash equivalents at the end of the first quarter of fiscal 2010 were $5.2 million compared with $4.0 million at the end of the first quarter of fiscal 2009 and $9.6 million at the end of the fourth quarter of fiscal 2009. The decrease in cash compared with the fourth quarter of 2009 is primarily the result of the use of $5.2 million for the repurchase of common stock under the Company’s modified “Dutch auction” tender offer, which concluded in January 2010 and the current open market share repurchase program that was initiated in February 2010, as well as the repayment of $0.5 million of the Company’s bank loan. This use of funds was partially offset by cash flow from operations for the first quarter of 2010 of $1.4 million.

Conference Call

Tucows will host a conference call today, Wednesday, May 12, 2010 at 5:00 p.m. ET to discuss the Company’s first quarter fiscal 2010 results. To access the conference call via the Internet, go to http://tucowsinc.com/investors.

For those unable to participate in the conference call at the scheduled time, it will be archived for replay both by telephone and via the Internet beginning approximately one hour following completion of the call. To access the archived conference call by telephone, dial 1-416-849-0833 or 1-800-642-1687 and enter the pass code 72055618. The telephone replay will be available until Wednesday, May 19, 2010 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://tucowsinc.com/investors.

About Tucows

Tucows is a global Internet services company. OpenSRS manages over ten million domain names and millions of email boxes through a reseller network of over 10,000 web hosts and ISPs. Hover is the easiest way for individuals and small businesses to manage their domain names and email addresses. YummyNames owns premium domain names that generate revenue through advertising or resale. Butterscotch.com is an online video network building on the foundation of Tucows.com. More information can be found at http://tucowsinc.com.

This news release contains, in addition to historical information, forward-looking statements related to such matters as our business, including the price per share at which Tucows will purchase shares and the level of under subscription. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks, which could cause actual results to differ materially from those described in the forward-looking statements. Information about potential factors that could affect Tucows’ business, results of operations and financial condition is included in the Risk Factors sections of Tucows’ filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available to Tucows as of the date of this document, and except to the extent Tucows may be required to update such information under any applicable securities laws, Tucows assumes no obligation to update such forward-looking statements.

TUCOWS is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

OpenSRS Reveals Proven Revenue Stream For Web 2.0 Companies at Web 2.0 Expo San Francisco

Presentation Outlines Namespaces and Revenue Models

TORONTO, May 4 – Tucows Inc. (NYSE AMEX: TCX, TSX:TC), through its wholesale reseller services group OpenSRS, will present a seminar at Web 2.0 Expo San Francisco on Tuesday, May 4, 2010 at 11:10 A.M. (PDT), that will encourage providers of web-based, online publishing and presence services to consider domain names as part of their approach to namespaces.

In a presentation entitled, “My Name is URL-Namespaces & Revenue Models,” Ken Schafer, Executive Vice President of Products, Tucows Inc., will discuss the opportunity companies have to enhance the user experience and generate significant revenue by offering a domain name, or web address, as an option with any service that helps users establish a presence online. Prior to joining Tucows in 2006, Schafer spent 12 years developing new Internet strategies for dozens of companies, including Sony Music Canada.

“Service providers need to think a little bit more about the web addresses they give their end users,” said Schafer. “Right now they tend to think of it as an afterthought or maybe as a marketing tool. One thing that they’re really missing is the fact that those web addresses could be a real revenue opportunity.”

Schafer explains that Web 2.0 companies don’t have to choose between delivering a great user experience and generating revenue. “We all know that for Web 2.0 companies, revenue models can really be elusive at times,” Schafer said. “This is something that people can be really excited about bringing to their businesses. It’s an opportunity for them to quickly integrate a new revenue stream and for their customers to share information more easily and to build online identities.”

This marks the first time that OpenSRS is sponsoring and attending Web 2.0 Expo San Francisco.

About Tucows

Tucows is a global Internet services company. OpenSRS manages over 10 million domain names and millions of email boxes through a reseller network of over 10,000 web hosts and ISPs. Hover is the easiest way for individuals and small businesses to manage their domain names and email addresses. YummyNames owns premium domain names that generate revenue through advertising or resale. Butterscotch.com is an online video network building on the foundation of Tucows.com. More information can be found at http://tucowsinc.com.

About Web 2.0 Expo

Web 2.0 Expo, co-produced by O’Reilly Media, Inc. and UBM TechWeb, showcases the latest Web 2.0 business models, development paradigms and design strategies for the builders of the next-generation Web. This annual multi-track conference brings together people, ideas, connections, contacts, products, and companies to foster stronger Web 2.0 communities. Web 2.0 Expo events occur in San Francisco and New York and feature influential keynotes and speakers, detailed workshops, a Launch Pad start-up program, an Expo show floor, a Web2Open unconference and rich networking events. For more information, please visit: http://www.web2expo.com.

TUCOWS is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

Web 2.0 Expo
www.web2expo.com

Seminar: My Name is URL – Namespaces & Revenue Models
http://www.web2expo.com/webexsf2010/public/schedule/detail/14079
http://www.blip.tv/file/3475392/

OpenSRS
www.opensrs.com

Tucows
www.tucowsinc.com

For further information: Le Quan Truong, Director of Marketing, OpenSRS, Tel: (416) 575-9382, ltruong@tucows.com

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