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Dot Travel Still Isn't Dead Yet

John Levine

I've writen several blog entries about the continued downward swirling motion of Tralliance, the company that runs the registry for .TRAVEL. In this month's installment, as told in their quarterly 10-Q SEC filing, they flirt with bankruptcy but may well end up more stable than before. One of the more eye-catching paragraphs says:

Based upon the Company's current financial condition, as discussed above, and without the infusion of additional capital, management does not believe that the Company will be able to fund its operations beyond the end of May 2008.

But then I read the rest of the 10-Q, which reveals that .TRAVEL is, for a change, in no immediate danger of going away. The registry is owned by an entity called Tralliance which is in turn owned by a public company called theglobe.com, which filed the 10-Q. Theglobe was the fluffiest of dot.com startups, notable for the greatest day-of-IPO price jump ever, and has in the past decade burned through $300 million in a variety of unsuccessful lines of business. (See previous blog entries.) For the past several years the controlling shareholder has been Michael Egan, who made a large fortune in an unrelated car rental business.

According to the 10-Q, Tralliance generates about $1.5 million per year in revenue, which should be enough to keep it going just fine. Something is costing $200K/mo in administrative overhead, above and beyond sales and marketing and the modest cost of actually running the registry. Assuming they can cut down on the three martini lunches or whatever, a standalone Tralliance looks like it would be viable. So the plan is to sell Tralliance to a private company held by Egan in return for cancelling all the debt from Egan's prior cash infusions, and a 10% claim on future revenue. Why, you might ask, would they do this? Because theglobe still has over a million dollars in unpaid bills from former lines of business, notably their Voiceglo voip phone service. This unhooks Tralliance from all of the debt, and the 10% of revenue will trickle money out to theglobe's creditors who might decide that getting something from the trickle is better than forcing them into bankruptcy and getting nothing, since Egan's debt is probably senior to theirs. Or even if they do force bankruptcy, it's tough noogies since by then theglobe will have no assets beyond the 10% trickle.

So it's not a particularly noble situation, but it looks like .TRAVEL can survive to fail another day. It still has the fundamental problem of all sponsored TLDs that nobody cares (except, of course for me, the proud proprietor of http://airinfo.travel) but there's not much they can do about that.

By John Levine, Author, Consultant & Speaker. More blog posts from John Levine can also be read here.

Related topics: Domain Names, Registry Services, ICANN, Top-Level Domains

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