The IE Domain Registery (IEDR), which several months ago posted losses in the region of €1.2m has today reported an operating profit of €481,000 upon a turnover of €2m. New IEDR boss David Curtin attributed the performance to a 32pc growth in registration revenues and a 50pc reduction in operating costs.
A spokesman for the IEDR told siliconrepublic.com that the company plans to plough the nearly half a million euro profit back into reducing the €1.2m losses incurred. Last November, the IEDR reported the loss after two years of silence on its financial state. The results were revealed amidst a controversy over the dismissal of its previous CEO Mike Fagan, which resulted in High Court proceedings.
The controversy raised hackles in Ireland’s internet community about the management of what is supposed to be a national resource as well as the difficulties experienced by Irish businesspeople, interest groups and individuals seeking domain names. The Minister for Communications Dermot Ahern TD was called upon to take over the management of the IEDR under a provision in the E-Commerce Act 2000, but instead he opted to have the IEDR regulated by the Commission for Communications Regulation (ComReg).
Audited results for 2003 showed a profit of €481,000 compared with a loss of €1.2m in 2002, a turnaround it said it achieved through a combination of cost reductions and volume growth in business.
Operating costs were reduced by 50.4pc and employment costs were reduced by 35.3pc. Bad debts were reduced by 76pc from €371,368 in 2002. Advertising and related costs were reduced by 74pc from €272,637 in 2002. Liquidity, the IEDR claimed, was dramatically improved as a result of a focus on working capital management.
Growth in new domains in 2003 was at a gross rate of 23pc. At the end of December 2003 there were 35,426 registered .ie domains in Ireland. From 1 January, the IEDR cut the price of registering a domain by 10pc.
In an interview with siliconrepublic.com, the new chief executive of the IEDR David Curtin said that on an operating front the IEDR has changed. “In terms of registering new domains, businesses and interest groups don’t need to furnish us with onerous documentation. A lot of the registration process takes place online and the checks take place online. For businesses we no longer need a certificate of incorporation but their company registration number, for sporting organisations a letterhead and for charities their charity registration number. The time needed to register a domain today is only a fraction of what it was. As well as this we cut prices by 10pc and as registrations increase we aim to look at further reductions.
“Another advance is in the form of a console for domain name resellers that allows them to access the database, check upcoming renewals and other technical content online and it gives them confidence in their business because we are doing this more efficiently and faster than before.”
Curtin explained that in terms of the €1.2m loss incurred in 2002, this year’s profit of €481,000 would be used to reduce that loss. “We need another good year of profitability to continue to offset that loss. Unfortunately it is a legacy of the previous regime, but as we make it easier for people to register domains and improve the volumes, we will have flexibility to look at reducing pricing going forward.
“It really is an issue of economies of scale. There are millions of .com domain names out there, and even in the UK, .co.uk domain names are much cheaper. In Ireland we only have 38,000 registered domains so unfortunately prices have to be higher.”
But there are still opportunities that Curtin said he is determined to tackle. “Because we are a managed registry, we can offer value and integrity that .com domains can’t. You are less likely to experience fraud or be spammed by a .ie domain because of the attention we give to quality registrations.
“Customers of .ie should have more confidence and be more willing to transact online, and if they email us they can do so in the knowledge that they won’t be added to a spam list. Those things have value and are intrinsic to the .ie brand and that’s the message that we will communicate throughout 2004,” Curtin concluded.
By John Kennedy