News / February 2012

The Internet is Sentient

Prologue

There is a battle going on between the Internet and those who are threatened by the Internet’s values. This includes anyone protecting old business models; incumbent telcos and cablecos, and rights collectives representing old distribution models for intellectual property. Most importantly, the greatest threat is to the power of the nation-state itself.

This struggle is marked by the Internet achieving sentience. I use sentience here to describe the deep symbiosis of the network and the people that use it and the huge quantity of emergent properties that result. The whole is vastly greater than the sum of the parts.

Introduction/tl:dr

The Internet has achieved sentience. It is some different version of Kurzweil’s singularity, but it exists today. The Internet is self-improving, it propagates its unique values and, most importantly, it has now matured to the point where it is able to protect itself from any threat.

This sentience is a fusion of network and people. Recognizing its existence is central to understanding how society will evolve with and through it and to making this symbiosis as healthy as it can be. For many, this sentience is understood on an implied level. This will be better if made express.

It constantly improves

From its inception the Internet has been on a path of continual self-improvement. We can see this in everything from the way that content delivery became more efficient (compression, local caches, CDNs) to the way languages have become more efficient (C++ to Java to Perl to Python to Ruby to JavaScript) to the way that social has become more efficient (the progression from ICQ to Facebook/Twitter and beyond).

Every element of the Internet eventually gets improved upon with huge network effects, and those network effects are just accelerating. Not only is the Internet improving with the number of people connected, it is improving the very people connected to it.

It propagates its values

The Internet has often been described as valueless. It is not. In fact strong values have emerged. The Internet stands for openness, connectedness, sharing and fairness. It facilitates these things and propagates them. Think of the generally increasing difficulty that corruption and unfairness are having, from dictators to unfriendly business practices.

The Arab Spring and Verizon removing an unfair $2 surcharge are equally good examples. A groundswell starts and does not come from any one voice, but seems to come from the collective consciousness. It seems to come from everywhere at the same time.

It responds to threats

The Internet itself now clearly responds to things that threaten it. The response is multi-faceted, coming from many different places and in many different ways.

We see responses to legislative threats like SOPA and ACTA where people all over the world have responded to specific national legislation in a way never before seen.

We see this when we see Anonymous and others attacking various parties and entities that threaten the Internet and its values, almost like mutated white blood cells in the Internet’s bloodstream. And of course there is no specific person or thing that is Anonymous. Watching those threatened take a traditional approach to stopping it approaches farce.

We see this when we see plans arise for alternatives to the present Internet in response to threats from those who fear it. As the SOPA debate kicked into high gear a Reddit discussion on “Plan B” kicked off and has not slowed down despite the immediate threat passing. This was not even close to the only dialogue of its kind. The collective consciousness of the Internet understands the threat as continual and existential and in no way limited to SOPA, PIPA or ACTA. Those threatened, on the other hand, think they have a “PR problem” and that somehow Google and Silicon Valley have fooled people.

Finally, the Internet responding to threats to its existence is happening at an increasing rate. Draw a line through Citizen Lab, EFF and others in the late 90’s, TOR and others in the late 00’s and the responses that we have seen in the last months. This trend will accelerate.

What are the implications of sentience

When we interact with the Internet, whether it is in platform design, marketing or our own personal use of social media we need to keep the concept of sentience in mind. It can change the way we approach these tasks.

When we interact with the Internet we need to not only to expect it to change and evolve but we need to actively think about our own participation in this evolution. We are each a tiny part of the sentience of the Internet.

Perhaps most importantly for this post and for the broad theme of conflict between value systems, any attempt to legislate, regulate or otherwise control the Internet ignores sentience at its peril.

Conclusion

The genie of the Internet is out of the bottle. From now on, its sentience will protect its independence, whether one likes it or not. If those threatened try and squeeze too tightly the Internet will simply get up and walk away. The nation-state can no longer control the Internet but it can do significant damage to it, and in doing so to itself.

The hope is that acknowledging and discussing the Internet as sentient will allow us to approach its relationship with the nation-state, and other interests who feel threatened by it, in a way that more smoothly eases us into the future.

Tucows Inc. Reports Continuing Strong Financial Results for Fourth Quarter of 2011

- Company Reports 7th Consecutive Quarter of Record Revenue -

TORONTO, Feb. 15, 2012 – 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 fourth quarter ended December 31, 2011. All figures are in U.S. dollars.

Summary Financial Results

(Numbers in Thousands of US Dollars, Except Per Share Data)

3 Months

Ended

December 31,

2011

(unaudited)
3 Months

Ended

December 31,

2010

(unaudited)
12 Months

Ended

December 31,

2011

(unaudited)
12 Months

Ended

December 31,

2010

(unaudited)
Net revenue 26,370 22,077 97,065 84,579
Income before provision for income taxes

and change in fair value of forward

exchange contracts
1,745 611 3,986 1,455
Net income (loss) for the period 6,055 1,237 6,170 2,117
Net earnings (loss) per common share* 0.11 0.02 0.12 0.04
Net cash provided by operating activities 2,683 2,341 5,885 6,769

* 2011 results include a tax benefit of $0.06 per share related to the release of deferred tax asset valuation allowances.

Summary of Revenues and Cost of Revenues

(Numbers in Thousands of US Dollars)

Revenue Cost of Revenue
3 Months Ended

December 31,

2011 (unaudited)
3 Months Ended

December 31,

2010 (unaudited)
3 Months Ended

December 31,

2011 (unaudited)
3 Months Ended

December 31,

2010 (unaudited)
OpenSRS:
Domain Service 20,743 17,308 17,347 14,565
Email Service 653 529 41 104
Other services 1,136 1,104 385 366
Total OpenSRS services 22,532 18,941 17,773 15,035
YummyNames 1,648 1,531 182 181
Hover 1,432 1,172 548 398
Butterscotch 759 433 6 9
Network, other costs - - 1,146 1,148
Network, depreciation and

amortization costs
- - 177 313
Total revenue/cost of revenue 26,370 22,077 19,833 17,084

“Our strong performance in the fourth quarter, highlighted by 19% year-over-year revenue growth to a record $26.4 million – our seventh consecutive quarter of record revenue – and solid cash flow from operations, concluded a year that was indicative of the consistency and reliability of our business, as well as our ability to efficiently deliver growth,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “As a result, we also delivered our best year ever in terms of revenue at just over $97 million. Looking ahead, this efficiency, combined with what we believe is the best distribution channel in the Internet economy, firmly positions us to continue to consistently generate cash flow, while introducing new services with minimal capital investment or impact on operating expenses. Ting, our recently launched US mobile phone service, is a testament to our capabilities in this regard.”

Net revenue for the fourth quarter of 2011 increased 19% to a record $26.4 million from $22.1 million for the fourth quarter of 2010 and was driven by growth in each of the Company’s business groups.

Net income for the fourth quarter of 2011 was $6.1 million, or $0.11 per share, compared with net income for the fourth quarter of 2010 of $1.2 million, or $0.02 per share. Net income per share for the fourth quarter of 2011 includes a tax benefit of $0.06 per share related to the release of deferred tax asset valuation allowances during that quarter.

Deferred revenue at the end of the fourth quarter of 2011 was $69.2 million, an increase of 11% from $62.6 million at the end of the fourth quarter of 2010 and relatively unchanged from the end of the third quarter of 2011.

Cash and cash equivalents at the end of the fourth quarter of 2011 were $6.4 million compared with $4.2 million at the end of the fourth quarter of 2010 and $4.7 million at the end of the third quarter of 2011. The increase from the end of third quarter of 2011 is primarily the result of cash flow from operations for the fourth quarter of 2011 of $2.7 million, which was partially offset by the use of $0.7 million
for repayment of the Company’s credit facility and $0.2 million for investment in equipment.

As previously announced, subsequent to the end of the fourth quarter the Company completed the repurchase of 7.6 million of its shares at a purchase price of $0.77 per share for a total of $5.8 million under its modified “Dutch auction” tender announced on December 15, 2011. Since initiating its first share buyback program in February 2007, the Company has repurchased a total of 30.8 million shares through its buyback programs, representing 40.5% of the Company’s total shares outstanding at the end of January 2007.

Conference Call

Tucows management will host a conference call today, Wednesday, February 15, 2012 at 5:00 p.m. (ET) to discuss the Company’s fourth quarter 2011 results. Participants can access the conference call via the Internet at www.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 416-849-0833 or 1-855-859-2056 and enter the pass code 48872391 followed by the pound key. The telephone replay will be available until Wednesday, February 22, 2012 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 (http://opensrs.com) manages over eleven million domain names and millions of email boxes through a reseller network of over 12,000 web hosts and ISPs. Hover (http://hover.com) is the easiest way for individuals and small businesses to manage their domain names and email addresses. Ting.com (https://ting.com) is a mobile phone service provider dedicated to bringing clarity and control to US mobile phone users. YummyNames (http://yummynames.com) owns premium domain names that generate revenue through advertising or resale. More information can be found on Tucows’ corporate website (http://tucows.com).

This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995. In particular, this release includes forward looking statements regarding our expectations as to our financial results, our future growth, the consistency of our business and our ability to generate cash. These statements are based on management’s current expectations and are subject to a number of uncertainties and risks that 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 should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements are based on information available to Tucows as of the date they are made. Tucows assumes no obligation to update any forward-looking statements, except as may be required by law.

Tucows, OpenSRS, Hover, and YummyNames are registered trademarks of Tucows Inc. or its subsidiaries.

OpenSRS Joins Parallels Domain Name Network

TORONTO and ORLANDO, FL, Feb. 15, 2012 – Tucows Inc. (NYSE: TCX) (AMEX: TCX) (TSX: TC), a global Internet services company dedicated to making simple useful services that unlock the power of the Internet, today announced that its OpenSRS wholesale services division has joined the Parallels Domain Name Network (DNN), allowing Parallels partners to quickly and easily signup to sell OpenSRS services.

Service providers using Parallels Automation, Parallels Business Automation Standard and Parallels Plesk Billing can now become OpenSRS resellers through the Parallels DNN at no charge. OpenSRS has now been integrated into Parallels billing applications with new, fully-supported plugins that enable resellers to sell and manage over 100 different domain name extensions, SSL digital certificates from five leading brands, and mobile websites.

“Joining the Parallels DNN is the logical extension of the work we’ve done over the last few months to integrate OpenSRS across Parallels software portfolio,” said Dave Woroch, EVP Sales, Tucows. “We’re excited that service providers using Parallels can now quickly become OpenSRS Resellers and take advantage of our industry-leading customer service and extensive lineup of products and services.”

The announcement was made at Parallels Summit 2012, the leading global annual gathering of the hosting and cloud industry. OpenSRS is a Gold Sponsor. Visit OpenSRS at booth #300 on the show floor to learn more about the full range of OpenSRS wholesale Internet services, and to see Parallels plugins for Parallels Business Automation, Parallels Business Automation Standard, and Parallels Plesk Billing in action.

Learn more at http://parallels.com/dnn

About Tucows

Tucows is a global Internet services company. OpenSRS (http://opensrs.com) manages over eleven million domain names and millions of email boxes through a reseller network of over 12,000 web hosts and ISPs. Hover (http://hover.com) is the easiest way for individuals and small businesses to manage their domain names and email addresses. Ting (http://ting.com) is a mobile phone service provider dedicated to bringing clarity and control to US mobile phone users. YummyNames (http://yummynames.com) owns premium domain names that generate revenue through advertising or resale. More information can be found on Tucows’ corporate website (http://tucows.com).

Tucows, OpenSRS, Hover, and YummyNames are registered trademark of Tucows Inc. or its subsidiaries.

For further information:
Le Quan Truong
Director of Marketing, OpenSRS
(416) 538-5450
ltruong@tucows.com

Tucows Fourth Quarter Investment Community Conference Call is Wednesday, February 15, 2012 AT 5:00 P.M. (ET)

TORONTO, February 9, 2012– Tucows Inc. (TSX: TC, AMEX: TCX) plans to report its fourth quarter fiscal 2011 financial results via news release on Wednesday, February 15, 2012 at approximately 4:00 p.m. (ET). Tucows management will host a conference call the same day at 5:00 p.m. (ET) to discuss the results and the outlook for the company.

Participants can access the conference call via the Internet at 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 416-849-0833 or 1-855-859-2056 and enter the pass code 48872391 followed by the pound key. The telephone replay will be available until Wednesday, February 22, 2012 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 eleven million domain names and millions of email boxes through a reseller network of over 12,000 web hosts and ISPs. Hover is the easiest way for individuals and small businesses to manage their domain names and email addresses. Ting (http://ting.com) is a mobile phone service provider dedicated to bringing clarity and control to US mobile phone users. YummyNames owns premium domain names that generate revenue through advertising or resale. More information can be found on Tucows’ corporate website.

Tucows, OpenSRS, Hover, and YummyNames are registered trademark of Tucows Inc. or its subsidiaries.

Contact:
Lawrence Chamberlain
TMX Equicom
(416) 815-0700 ext. 257
lchamberlain@equicomgroup.com

Tucows Launches Ting – A New US Mobile Phone Service

Ting Promises “Mobile That Makes Sense”

TORONTO, Feb. 2, 2012 – Tucows Inc. (NYSE AMEX:TCX, TSX:TC), a global Internet services company dedicated to making simple useful services that unlock the power of the Internet, today announced the launch of Ting, a mobile phone service dedicated to bringing clarity and control to US mobile phone customers.

Small businesses and families in the US are overpaying for mobile service and underserved by their mobile service providers. With Ting, Tucows seeks to offer a fresh alternative by emphasizing clarity, usability, a sincere commitment to customer support and significant monthly savings.
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