Tucows will now exclusively use NameJet to auction Tucows’ large inventory of expired domain names.

NameJet is a domain name aftermarket auction company that consolidates an exclusive inventory of expired and deleted domains from top domain name registrars and makes them available for auction.

Starting today (February 9, 2009), thousands of daily expired domain names from Tucows will be available for auction to the general public on the NameJet Website.

We’re pleased to be working with NameJet to auction our expired domain names, and we look forward to these names being made available to a wide audience of bidders through NameJet.

TORONTO, February 9, 2009 — Tucows Inc., (AMEX:TCX, TSX:TC) a global provider of domain names, email and other Internet services, today reported its financial results for the fourth quarter 2008 ended December 31, 2008. All figures are in U.S. dollars.

“During the fourth quarter, our strong competitive position continued to drive both new registration and renewal domain transaction volumes inside of our OpenSRS wholesale services business, contributing to year-over-year growth in revenue,” said Elliot Noss, President and CEO of Tucows. “While we benefited from the sale of our equity stake in Afilias during the quarter, cash flow from operations was negatively impacted by the timing of payables, as well as one-time restructuring costs.”

Mr. Noss continued, “The domain name component of our OpenSRS Wholesale business is exhibiting solid growth, especially relative to the rest of the domain name market. Our launches of Hover, Butterscotch.com and YummyNames in 2008 have set the stage for us to grow each of these units in 2009.

“With our email migration, employee downsizing and more favorable Canadian dollar environment, combined with our recurring revenue model based on high-volume, low-cost transactions, we will produce solid cash flow from operations, which will support our share repurchase programs and generate value for our shareholders.”

Net revenue for the fourth quarter 2008 increased 5.0% to $19.2 million from $18.2 million for the fourth quarter 2007. The increase was primarily the result of growth in both new registrations and renewals from our traditional domain registration service. Net revenue for fiscal 2008 increased 5.1% to $78.5 million from $74.6 million for fiscal 2007.

Net income for the fourth quarter 2008 was $1.0 million, or $0.01 per share, compared with a net loss of $935,000, or $0.01 per share, for the fourth quarter 2007. Net income for the fourth quarter 2008 included other income of $3.1 million from the sale of the Company’s equity stake in Afilias. This benefit was partially offset by a loss on foreign exchange of $2.2 million, inclusive of a mark to market loss of $1.4 million, compared to a gain on foreign exchange of $106,000, inclusive of a mark to market loss of $667,000 in the fourth quarter 2007, largely as a result of the significant weakening of the Canadian dollar that occurred during the fourth quarter 2008.

Net income for fiscal 2008 was $2.1 million, or $0.03 per share, compared with $2.7 million, or $0.04 per share, for fiscal 2007. Net income for fiscal 2008 included other income of $5.3 million, which was composed primarily of the profit of $3.1 million from the sale of the Company’s equity stake in Afilias and the profit of $2.1 million on the sale of the Company’s retail hosting assets. These benefits were largely offset by a loss on foreign exchange of $2.8 million, inclusive of a mark to market loss of $2.0 million, compared to a gain on foreign exchange of $1.5 million, inclusive of a mark to market gain of $497,000 in fiscal 2007, largely the result of the significant weakening of the Canadian dollar that occurred during fiscal 2008.

Deferred revenue at the end the fourth quarter of fiscal 2008 was $54.2 million, an increase of 7.0% from $50.6 million at the end of the fourth quarter of 2007 and down marginally from $54.4 million at the end of the third quarter of fiscal 2008 due primarily to the impact of the sale of the Company’s retail hosting assets. Cash at the end of the fourth quarter of fiscal 2008 was $5.4 million compared with $8.1 million at the end of the fourth quarter of fiscal 2007 and $2.7 million at the end of the third quarter of fiscal 2008. This increase in cash compared to the third quarter of 2008 is primarily the result of cash proceeds of $3.2 million generated by the sale of the Company’s equity position in Afilias and the return of $500,000 from escrow on the conclusion of our acquisition of Innerwise, Inc. This was partially offset by the use of cash in operations of $229,000, the repayment of $479,000 of the Company’s bank loan, the investment of $191,000 in property and equipment and the repurchase of shares valued at $272,000.

About Tucows

Tucows is a global Internet services company. OpenSRS manages over 8 million domain names and millions of email boxes through a reseller network of over 9,000 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.

For further information: Lawrence Chamberlain, The Equicom Group for Tucows Inc., (416) 815-0700 ext. 257, lchamberlain@equicomgroup.com

TORONTO, December 15, 2008 – Tucows Inc., (AMEX:TCX, TSX:TC) a global provider of domain names, email and other Internet services, today announced that Joichi Ito has been appointed to the Board of Directors of the Company.

“We are honoured to have one of the most influential leaders in the global Internet community join our Board,” said Elliot Noss, President and CEO of Tucows. “Mr. Ito brings to Tucows a unique understanding of the Internet’s impact on business and society. We look forward to his strategic guidance and counsel.”

“Tucows is a true pioneer in the domain name and Internet services space,” said Joi Ito. “I look forward to participating in my role¬†as a member of Tucows’ Board of Directors as the Company continues to innovate and grow.”

Mr. Ito is currently the CEO of Creative Commons, a non-profit organization devoted to information sharing initiatives for creative works, Neoteny Co. Ltd, a venture capital firm investing in Internet technologies and services, and Kula Co., Ltd., an internet software company. Mr. Ito is the Chairman of Six Apart Japan, a weblog software company; and serves as Director on numerous Boards including, Technorati, the preeminent search engine for blogs, Digital Garage, and Machinima.com. He also serves on the Board of The Mozilla Foundation. Mr. Ito has founded or co-founded several Internet companies, including PSINet Japan, Digital Garage and Infoseek Japan. He has served on the board of ICANN and continues to serve on various Japanese central and local government committees and boards, advising on IT, privacy and computer security related issues. Mr. Ito has been recognized by numerous publications as an influential Internet leader. Most recently, Mr. Ito was named by BusinessWeek as one of the 25 Most Influential People on the Web for 2008.

About Tucows

Tucows is a global Internet services company. OpenSRS manages over 8 million domain names and millions of email boxes through a reseller network of over 9,000 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.

For further information:
Leona Hobbs
Director, Communications
Tucows
416-538-5450
lhobbs@tucows.com

Today we made the decision to restructure our business, which reduced our number of employees by roughly 15%. I have just finished an all-hands meeting where I talked about today’s events with our people.

Our thoughts today are with the people who left us. They were our friends and colleagues, each made meaningful contributions to our business and were liked. We offer them our sincere thanks for their hard work and efforts and good wishes for them as they go forward.

We decided to take this step because of the uncertainty of overall economic conditions and the fact that our performance has been impacted by a number of unanticipated challenges during the first nine months of the year, including advertising revenues being dampened by the weakness in the economy and by reduced payouts to the domain channel by Google and Yahoo, which is in turn impacting domain portfolio advertising revenues and especially bulk domain portfolio sales.

I have also never seen a macro economic environment like we are seeing now. I am old enough to have lived through a number of down cycles but there are elements of this one that make it unique and that will take time to work through.

I am immensely proud of the great work our team has done together this year. The product launches of Butterscotch, Hover and Storefront. The brand launches of OpenSRS and YummyNames, and the smooth email migration to our new platform.

We are luckier than most in that what we sell, domain names and email, is more like milk and bread than like cars and refrigerators. We are also luckier than most in that we generate cash and will continue to.

As we look forward to 2009, I believe we have a strong team who will continue to innovate, to work efficiently and maintain our positive momentum. I fundamentally believe that our strength comes from our people and I look forward to working hard together over the coming weeks and months to exceed even our own expectations.

And again, today, our thoughts are with the people who have left.

Allows marketers to search and select from thousands of superior domain names to enhance marketing and branding initiatives

Toronto, October 29, 2008 – Tucows Inc., (AMEX:TCX, TSX:TC) a global provider of domain names, email and other Internet services, today announced the launch of YummyNames, a new service providing exclusive access to a large selection of premium domain names from the Tucows Domain Name Portfolio. Created especially with marketers in mind, YummyNames allows people to search for and obtain the perfect domain name for their organization from tens of thousands of high-quality domain names.

A few of the YummyNames domain names available include countryrock.com, divorced.com, lemons.com, listener.com, mygarden.com, thepub.com, tool.com and veggies.com.
Marketers seeking high-quality domain names for their company, clients or campaigns can go to http://www.yummynames.com and search through a large portfolio of premium domain names. They have the option of purchasing a name outright or leasing the domain name for a finite period of time, the latter being a payment option particularly advantageous for short-term or seasonal marketing campaigns.

Developed and managed by a team of marketing and domain name veterans at Tucows, YummyNames is also a useful resource for SMB owners who recognize that obtaining a high-quality domain name is critical to the success of their business.

“It’s important for marketers and organizations to realize they don’t need to settle on a lousy domain name,” said Bill Sweetman, General Manager, YummyNames. “Domain names are a vital component to successfully marketing a brand ‚Äì whether it’s the launch of a new company, website or marketing campaign. A high-quality domain name is short, relevant and most important, easy to remember. We’re excited to open the Tucows portfolio of premium domains to the public through YummyNames. We’re confident users will find their perfect name.”

“YummyNames, the public face of our domain portfolio service group, provides an additional means by which to realize the value of our domain portfolio assets to drive continued growth for the Company,” said Elliot Noss, President and CEO, Tucows.

About Tucows

Tucows is a global Internet services company.

OpenSRS manages over eight million domain names and millions of email boxes through a reseller network of over 9,000 web hosts and ISPs. Our Retail group sells services directly to consumers and small businesses through Domain Direct, It’s Your Domain and NetIdentity. YummyNames owns premium domain names that generate revenue through advertising or resale. Tucows.com remains one of the most popular software download sites on the Internet.

More information can be found at http://tucowsinc.com.

There’s been a fair bit of discussion surrounding a number of issues that happened around the time Tucows announced our transition from using our in-house auction service to working with Afternic.com to provide expired domain name auction services.

In reality, there are three separate issues here, and while they are seemingly related, in fact, they all took place independently and coincidentally.

• First, there was an incident involving domain names that were won by bidders at our in-house auction service, and then withdrawn.
• Second, there was a technical issue with our integration with Afternic.com that resulted in the withdrawal of a small number of domain names from Afternic.com after they had received Pre-Orders (but before the Live Auction process had begun).
• Third, there’s an ongoing discussion about employee participation in auctions.

In this post, I’m going to focus almost entirely on the problem we had with our in-house auction service. Read the Afternic blog for more on the second issue. We‚Äôll address our policy for employee participation in auctions in a follow-up blog post later today.

Before I explain what happened with our in-house auction, I’m going to quickly summarize the lifecycle and rules of our in-house auction. When I refer to “in-house auction,” I mean the ‘old’ Tucows auction platform at http://www.tucowsauction.com/. We’re working towards the final shut down of this service right now because, as of June 12, we‚Äôve teamed with Afternic for expired domain name auction services.

When a domain name that had been registered through Tucows expired, it used to end up in our in-house auction. Domains that were sold in our in-house auction were not transferred immediately to the winning bidder. They were, in fact, placed on hold for 60 days (referred to as the “Escrow period”) so that if the Original Registrant wanted to reinstate the domain name they would have the ability to do that.

In short, that means the Original Registrant could reclaim the domain even after it sold at auction.

If this reinstatement happened, the winning bidder was automatically refunded the amount they paid for the domain name. Specifically, if the winning bidder paid by credit card, the refund happened almost immediately as a reverse charge on their credit card. If the winning bidder paid using their Tucows Reseller account, that account was credited the next month.

Once the 60 day “Escrow period” passed, and if the domain had not been reinstated by the Original Registrant, only then was the domain transferred to the winning bidder.

This policy of our in-house auction is very clearly documented at http://documentation.tucows.com/domainauction/enduser/index.html. This was also clearly documented in the auction documentation available to Resellers in our Reseller Resource Center (RRC).

These rules have been in place since the auction service was first launched in 2006.

Quoting from the documentation:

Escrow period

If won in auction, a domain is placed in escrow and held for 100 days total from the expiry date, with a 24 – 48 hour margin. The domain will be released to the winning bidder at the end of the escrow period.

Note: The original registrant can redeem the domain during the escrow period. If the original owner redeems the domain, the winner of the auction will not be granted the domain, but will be refunded the bid amount paid.

What Happened in this Incident

While we were working on the technical transition between our in-house auction and our new Afternic.com solution, a number of domains – approximately 5,800 – from Tucows’ own Domain Portfolio of over 150,000 domain names accidentally expired. Unfortunately, the script that we normally run to handle renewals of these domain names every month failed. Because of this script failure, approximately 2,800 of the 5,800 names were subsequently and automatically listed in our in-house auction.

To be clear: all of the domains in question were ones that prior to expiry and listing in the auction were owned by Tucows, not a third-party. These were domains that had been a part of the Tucows’ Domain Portfolio for at least a year.

Of those approximately 2,800 domains that mistakenly went into our in-house auction service, approximately 260 received bids from approximately 25 different bidders.

When the Domain Portfolio team realized what had happened, and that a substantial number of valuable domains had mistakenly been allowed to expire, we immediately attempted to reinstate all these domain names through the various methods available to us, as the Original Registrant. Those methods included simple Registry renewals and redemptions.

In the case of the domains that had been won at auction, when the names were reinstated the winning bidder was notified automatically that the Original Registrant had reclaimed the name.

This reclaiming of the names was completely within our rights as the Original Registrant, and within the publicly stated, publicly available rules of our in-house auction service.

This was all done during the window of time (Escrow period) that the Original Registrant has to reinstate a domain name that was sold in our in-house auction.

Three of the approximately 25 winning bidders contacted us about this, and we replied to each of them and explained the situation to them.

That explains what happened, and it explains how we reclaimed the names that were mistakenly allowed to expiry.

Do we regret that this happened? You bet. And we’ve made sure it won’t ever happen again. But, mistakes do happen, and I’m sure you’d understand that we have a duty to our shareholders, as a publicly traded company, to protect the value of the assets contained in the Tucows Domain Portfolio.

There’s not a lot we can do to change the perception that some might have about this incident, other than to explain it fully. I think I’ve done that here, and I’ve tried to make it very clear that we acted in a way that was consistent with our rights as the Original Registrant of the domain names, and in a way that was within the publicly stated rules of our in-house auction service.

Tucows has just announced that it is collaborating with Afternic to auction Tucows’ large daily inventory of expired domain names. You can read the full news release with further details or visit our Reseller services site for further information.

To answer some of the questions our Resellers may have about expired domain name auctions, we’ve prepared a video with Bill Sweetman, General Manager, Domain Portfolio, Tucows.

All the details, including a news release and financial statements can be found in our Investors area. We’ll be hosting a live conference call beginning at 5:00 P.M. ET today (Wednesday, May. 7th, 2008). As usual, we’ll record the call and post an archived MP3 within a few hours.

Update: the MP3 recording of the Q1 2008 conference call has been posted.

Many of you know me as one of the original OpenSRS guys, but more recently, I’ve been involved in running Tucows retail services – Domain Direct, NetIdentity and ItsYourDomain. As you may have already read, effective today, we are getting out of the hosting business. You can read the full press release in our Media Archive.

Why are we doing this and what does it have to do with you?

From a retail perspective, we believe that it is extremely important for us to be able to provide world-class quality for all of the services we offer. By examining the market, seeking feedback from our end users, and discussing our strengths and weaknesses internally, one thing became clear. In order to provide world-class quality for all of the services we offer, we must simplify our service offerings.

Many of our competitors attempt to provide a “one-stop internet services shopping experience”. We call this “the Walmart way”. We believe that we have a much higher chance at succeeding by doing very few things extremely well for our clients. You could call this “the boutique approach”. Our goal is to help our customers use their domain names and email addresses with the great services that other companies are already providing. In other words, rather than trying to compete with companies like Hostopia to offer better hosting services than they do, we are going to focus on making sure that our products work better with their great services than any other provider does.

Tucows Resellers also benefit from this increased focus. My retail team spends a lot of time with the OpenSRS and Tucows Email teams to ensure that they understand where their services are succeeding and failing from a reseller perspective. Being in the building provides us with a great opportunity to improve these services for the benefit of all Tucows resellers. With the benefit of our increased focus, we will also be able to invest more time working specifically on translating everything that we are learning about how to sell domain names and email in a competitive market into programs that Tucows resellers will be able to take advantage of. These programs could take the form of new code, new services and new marketing programs, depending on what works best in each case.

I’m very pleased with this development as I really believe it will be of tremendous benefit to all of Tucows customers – retail and resale. Of course, if you have any questions about the specifics of the transaction, please feel free to leave us a comment and either myself, or someone from the team will respond.

And of course, we will be notifying all affected customers about this change and how it will affect their hosting service – if at all. Many of our shared hosting clients are already hosted with Hostopia, so the changes should be minimal for the vast majority.