Web.com Group, one of the largest domain registrars and web services provider for small and medium businesses, has summarized its finances for the third quarter. Despite achieved level of sales growth ($137.4 million in comparison to $125.3 million last year) company's management has reduced its revenue guidance for more than $10 million. It was supposed earlier that annual revenue of Web.com Group in 2014 would be around 579 million, now the highest number is 568.7 million.
CEO David Brown explains that change in the financial projections is caused by market entry of a big number of new domains. “While we continue to expect the recently expanded top-level domain environment to increase our ability to sell domains over the medium to long term”, he said. “The increased availability of names has had a near-term negative impact on domain-related revenue.”
David Brown also pointed out that appearance of the new domains had somewhat destabilized the domain market and domain investors exercise more caution, especially the ones that invest in premium names and who work with large amount of domains. “We’ve seen that market get soft…. The reason the softness is occurring is that this marketplace is looking at all of these new gTLDs coming into place, there are more options available for people and they’re kind of stepping back away, at least temporarily, to see how things settle out”, he said. According to his estimates, almost a half of the total amount that Web.com Group is losing, around $5 million, is the impact of the new domains and consequences of their appearance of the market.
