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29 May 2007
A blog entry from the always interesting Ed Hasbrouck led me to the latest quarterly 10-Q financial filing by theglobe.com, which owns Tralliance, the company that runs the .travel domain. After a most exciting decade buying and selling a variety of Internet related businesses, Tralliance and .travel are now theglobe's only activity.
The 10-Q says that they're running through cash at about $500K per month, and the have only $480K in cash now, so they're about to die. As the 10-Q says:
We received a report from our independent accountants, relating to our December 31, 2006 audited financial statements, containing a paragraph stating that our recurring losses from operations and our accumulated deficit raise substantial doubt about our ability to continue as a going concern. The Company continues to incur substantial consolidated net losses and management believes the Company will continue to be unprofitable and use cash in its operations for the foreseeable future. Based upon our current cash resources of approximately $480 thousand at May 4, 2007, management does not believe the Company can operate as a going concern beyond May 2007.
This crisis was precipitated by a $2.5 million payment to MySpace to settle a lawsuit due to theglobe sending several hundred thousand illegal spams to and through MySpace last year. (Phrases like "mind bogglingly stupid" would be appropriate here.) But they're out of money, and unless they can find someone to put in a lot of cash real soon, they're dead. The most likely someone is Michael Egan, theglobe's president who made a large bundle in the car rental business. An ICANN staffer sent me a note last week to say Tralliance plans to make an announcement about its plans soon, but I haven't seen anything yet.
Incidentally, .travel has only 25,000 registrations, total. Unlike the Registerfly mess, there's no chance of losing the registration data, since Neustar actually runs the registry. But there's a real policy question of what to do if the sponsor goes away. They can look for another sponsor, but given the less than fabulous success of the domain, it'd be hard to make any money from it. If there's no sponsor, the most sensible thing to do would be to wind it down, but that could take up to a decade and I wouldn't expect Neustar to do it for free.
Given how small .travel is, the resolution is less important for what happens to this particular domain than for the precedent it sets. If ICANN ever comes through with all the new domain names they've been promising for the past decade, sooner or later some domain will do a bubble, get wildly successful while firmly cash negative, then run out of money and pop with a million registrants in limbo. That'll be fun.
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