I N V E S T O R P R E S E N T A T I O N / / J u l y 2 0 1 4 - - PowerPoint PPT Presentation

i n v e s t o r p r e s e n t a t i o n j u l y 2 0 1 4
SMART_READER_LITE
LIVE PREVIEW

I N V E S T O R P R E S E N T A T I O N / / J u l y 2 0 1 4 - - PowerPoint PPT Presentation

I N V E S T O R P R E S E N T A T I O N / / J u l y 2 0 1 4 LEGAL DISCLAIMER This overview is furnished solely for the purpose of providing you information about Rightside Group, Ltd. (the Company). The overview is only intended for the


slide-1
SLIDE 1

I N V E S T O R P R E S E N T A T I O N / / J u l y 2 0 1 4

slide-2
SLIDE 2

2

LEGAL DISCLAIMER

This overview is furnished solely for the purpose of providing you information about Rightside Group, Ltd. (the “Company”). The overview is only intended for the use of the person to whom it is given and it is not to be reproduced or redistributed. Under no circumstance shall the overview constitute or form part of an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful. You should not construe the contents of the overview as investment, tax, legal, accounting, regulatory, financial or other advice. The overview does not purport to be all inclusive and does not take into account your investment objectives or taxation, legal, accounting, regulatory or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions as to such matters and for making your own independent assessment of the information contained in this overview Certain statements in the overview are forward-looking statements, based on the Company’s current expectations, assumptions and estimates and that involve risks and

  • uncertainties. Any statements other than statements of historical facts contained herein, including statements regarding our future results of operations and financial position;

historical results that may suggest ongoing trends for our business; the timing of the spin-off; any expectation of greater revenue, operating efficiencies or strategic benefits from the spin-off; market opportunities with respect to any general Top Level Domains (gTLDs); any growth or change of the domain name or domain name services markets or our ability to capitalize on such growth or change; the demand for premium and value-added domain services; the unit economics and demand for gTLDs; the viability of our technology; our relationships with industry partners; our business strategy and our objectives for future operations (including, without limitation, statements to the effect that the Company “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends” or “expects,” and similar expressions) are intended to be identified as forward-looking

  • statements. Actual results could differ materially and adversely from those projected or anticipated in the forward-looking statements as a result of a number of risks and

uncertainties pertaining to our business including those set forth in our Form 10 filed with the U.S. Securities and Exchange Commission on July 14, 2014. The statements in the

  • verview speak only as of the date hereof and the Company undertakes no obligation to update them after the date hereof.

Market and competitive position data in this overview has generally been obtained from industry publications and surveys or studies conducted by third-party sources. There are limitations with respect to the availability, accuracy, completeness and comparability of such data. We have not independently verified such data and can provide no assurance

  • f its accuracy or completeness. Certain statements in this overview regarding the market and competitive position data are based on our internal analyses, which involve certain

assumptions and estimates. These internal analyses have not been verified by any independent sources and there can be no assurance that the assumptions or estimates are accurate. None of the Company, their respective affiliates or any of their respective employees, directors, officers, contractors, advisors, members, successors, representatives or agents makes any representation or warranty as to the accuracy or completeness of this overview, and shall have no liability for any statements (expressed or implied) contained in, or for any omissions from, this overview or any other written or oral communications transmitted to you in the course of your evaluation of this overview. The Company has filed a Form 10 with the SEC in connection with its proposed spin-off from Demand Media. You may access the Form 10 and other documents we file with the SEC for free by visiting EDGAR on the SEC website at www.sec.gov. The information contained in this presentation is qualified in its entirety by reference to such documents.

slide-3
SLIDE 3

3

INTRODUCTION

TARYN NAIDU CEO TRACY KNOX CFO

slide-4
SLIDE 4

4

OVERVIEW OF RIGHTSIDE SPIN-OFF

  • Rightside Group, Ltd. (“Rightside” or the “Company”) currently conducts its business operations as a wholly owned

subsidiary of Demand Media

  • Demand Media has announced the planned spin-off of Rightside as a separate public company
  • The spin-off is currently expected to be completed on August 1, 2014
  • The stock is expected to be in the when-issued market on or shortly prior to the record date for the distribution
  • After the spin-off, Rightside will operate as an independent, publicly traded company
slide-5
SLIDE 5

5

SPIN-OFF RATIONALE

  • Capitalize on unique positioning as the only major pure play domain name services company with registrar and

registry businesses, each at scale

  • Provide a clearer story for investors looking to invest in internet subscription services
  • Allow for management to focus exclusively on domain name services goals and objectives, which requires a tailored

strategy given the different growth cycle of the gTLD opportunity

  • Facilitate acquisitions / business development deals using dedicated resources and capital allocation – in line with

business / financial needs

slide-6
SLIDE 6

RIGHTSIDE OVERVIEW

slide-7
SLIDE 7

7

UNIQUE END-TO-END, VERTICALLY INTEGRATED REGISTRAR-REGISTRY PLATFORM OPERATING AT SCALE

REGISTRY (SUPPLY) REGISTRAR (DISTRIBUTION) COMPLEMENTARY PRODUCTS & PREMIUM DOMAIN SERVICES

Consumers

O&O Retail Registrar O&O Wholesale Registrar

END-TO-END DOMAIN SERVICES

 

3rd-Party Registry

+

»

In-House Brokerage Team

»

Auction Services

»

Third-Party Distribution Channels

O&O Registry 3rd-Party Registrar

»

Website Builder Tools

»

Email Hosting

»

Website Security Services

Through Resellers

slide-8
SLIDE 8

8

RIGHTSIDE BUSINESS OVERVIEW

  • Leading provider of domain name services

Largest wholesale Internet domain name registrar

Second largest registrar overall

  • Major player in the historic expansion of general Top Level

Domains (gTLDs) with 30 gTLDs in the current portfolio and an interest in 67 additional gTLD applications

  • Unique end-to-end, vertically integrated registrar-registry

platform operating at scale

  • Recurring revenue financial model
  • Opportunity for strong margin expansion as Registry

business continues to scale

  • Experienced management team with long history in the

domain name industry

Rightside’s comprehensive domain name services platform touches the entire life cycle of a domain name

10.6 12.3 13.6 14.8 15.2

2010 2011 2012 2013 Q1 2014 Number of Domains Under Management (Millions)

LARGE CUSTOMER BASE

>16 MILLION // domain names under management >2.5 MILLION // retail domain names registered >20 THOUSAND // active resellers >250 THOUSAND // customers

slide-9
SLIDE 9

9

LARGE PORTFOLIO OF OWNED AND OPERATED (O&O) gTLDs

ACTIVE APPLICATIONS TO BE RESOLVED

EXPECTED

Over 40 O&O gTLDs

61

In partnership with Donuts

6

Standalone

.Mortgage .Degree .Rehab Pay Per Click

  • Biz. Horizontal

.Gives .Market .Kaufen Horizontal Consumer Small Business Vertical .Software .Haus Professional .RIP .Lawyer .Army .Engineer .Dentist .Vet .Attorney .Airforce .Navy

slide-10
SLIDE 10

10

THE NEW gTLD PROGRAM PRESENTS NEW OPPORTUNITIES FOR REGISTRY OPERATORS

Legacy gTLDs (e.g., .COM) New gTLDs (e.g., .NINJA)

Owned Distribution

Third Party Distribution

 

Ability to Variably Price Domains (Premium Priced)

Contractual Pricing Flexibility

gTLD Portfolio Diversification

slide-11
SLIDE 11

11

STRONG EARLY ADOPTION VALIDATING THE NEW gTLD OPPORTUNITY

EARLY GA PERFORMANCE TRENDS ARE STRONG

.NINJA

SUNRISE

»

Launch Date: 2/19/2014

»

Domains Reg.: 68

LANDRUSH / EAP

»

Launch Date: 4/30/2014

»

Domains Reg.: 198

GENERAL AVAILABILITY (GA)

»

Launch Date: 5/28/2014

»

Days in GA (1): 44

»

Domains Reg. To Date: 11,856

NEW gTLD PROGRAM STATS

»

255 gTLDs launched into Sunrise and / or GA

»

Over 150 registrars selling new gTLDs

»

Over 1.5 million registrations since first GA launch

»

Estimated revenue of over $60 million to date

Source: nTLDstats.com (1) As of 7/11/14.

(Thousands)

200 400 600 800 1,000 1,200 1,400 1,600 2/7 2/21 3/7 3/21 4/4 4/18 5/2 5/16 5/30 6/13 6/27 7/11 Registrations to Date Weekly Registrations

slide-12
SLIDE 12

12

RIGHTSIDE IS UNIQUELY POSITIONED TO CAPITALIZE ON THE NEW gTLD PROGRAM

Potential to be the only major domain name services company with both registrar and registry businesses each at scale

REGISTRY REGISTRAR

slide-13
SLIDE 13

13

$9.84 $9.85 $9.81 $9.98 $10.00

2010 2011 2012 2013 Q1 2014

RECURRING REVENUE FINANCIAL MODEL (*)

STEADY UNIT ECONOMICS

(1) Average revenue per domain is calculated by dividing registrar services revenue for a period by the average number of domain names registered in that period. The average number of domain names is the simple average of the number of domain names at the beginning and end of the period. The average revenue per domain name for partial year periods is annualized.

Annual Revenue per Domain (1) Registration Renewal Rates

71% 74% 72% 70% 75%

2010 2011 2012 2013 Q1 2014

(*) These data do not conform to the data reported by Demand Media in its public filings due to differences in company rollups.

LARGE SUBSCRIPTION REVENUE BASE 68% 69% 73% 76% 83%

2010 2011 2012 2013 Q1 2014 Subscription as % of Total Revenue

RENEWAL DRIVEN REVENUES

slide-14
SLIDE 14

14

ILLUSTRATIVE MARGIN POTENTIAL FROM NEW gTLDs

.COM on Rightside Registrar .GURU on Rightside Registrar .SOCIAL on GoDaddy .SOCIAL on Rightside Registrar

Annual Revenue per Domain

$9 ~$30 $20 ~$30

Registration Fees Paid to the Registry

~$8 $20 $0 $0

Registry

Verisign Donuts Rightside Rightside

Direct Profit per Domain (1)

$1 $10 $20 $30

Direct Margin (2)

11% 33% ~100% ~100% Fair………....…..…….…..Better………………………Best

(1) Direct profit defined as domain registration revenue less registration fees paid to the registry (2) Direct margin defined as direct profit divided by revenue

New gTLD program offers potential for strong margin expansion

(For illustrative purposes

  • nly, does not demonstrate

actual revenue potential)

slide-15
SLIDE 15

15

EXPERIENCED MANAGEMENT TEAM

Taryn Naidu

CEO

Tracy Knox

CFO

Wayne McLaurin

CTO

Rick Danis

General Counsel

David Ryan

GM, Registry

Steve Banfield

GM, Registrar

Matt Delgado

SVP, Operations

Kelly Johnson

SVP, Marketing

slide-16
SLIDE 16

DOMAIN NAME MARKET OVERVIEW

slide-17
SLIDE 17

17

RIGHTSIDE SERVES A LARGE GLOBAL MARKET

  • Over 270MM domain names registered as of

December 31, 2013

» Over 7% increase YoY » 9% CAGR since 2008

  • Nearly 120MM ccTLD domain names

registered

» 12% YoY growth (more than 2x the growth of

.com & .net)

Source: Verisign Domain Name Industry Briefs and management estimates

REGISTERED DOMAIN NAME VOLUME (Millions)

50 100 150 200 250 300 2008 2009 2010 2011 2012 2013 .com / .net ccTLDS

  • ther TLDs

ESTIMATED OVER 85 MILLION NEW DOMAIN NAMES REGISTERED IN 2013

slide-18
SLIDE 18

18

INCREASING ADOPTION BY Small Business

FUNDAMENTAL SHIFT IN CONSUMER BEHAVIOR DRIVING ONLINE DOMAIN GROWTH

Global Unique Internet Buyers (Millions)

Sources: (1) IDC Worldwide New Media Market Model (May 2014). (2) Wakefield Research (April 2013).

49%

49% OF SMALL BUSINESSES WITH A WEB PRESENCE ARE NOT COMPLETELY SATISFIED WITH THEIR DOMAIN NAME (2) 28.3 80.2 2009 2013

Global Hours Spent Online – Monthly (Billions)

MORE CONSUMERS ARE ONLINE (1) … … AND SPENDING MORE TIME ONLINE (1)

566 1,067 2009 2013

55%

55% SMBs SURVEYED BELIEVE THAT THEY HAVE LOST CUSTOMERS DUE TO LOW QUALITY DOMAIN NAMES (2)

slide-19
SLIDE 19

19

EXISTING DOMAINS NEW gTLD OPPORTUNITIES

NEW gTLDs OFFER MORE HIGH QUALITY & SPECIFIC DOMAINS

ICANN is expanding the universe of available gTLDs

FCBarcelona.com zephyrsf.com 10bestwebsitehosting.com kellsirish.com sfcityattorney.org newyorkcitylawyerlocator.com Barcelona.futbol sanfrancisco.realestate webhosting.reviews kellsirish.pub sfcity.attorney findNYC.lawyer

New gTLDs provide unprecedented

  • ptions and opportunities for

businesses and consumers to brand their online presence and connect with their audiences

  • More descriptive suffixes
  • Better convey topic area or purpose
  • Better connect with intended audience
  • Inventory of high quality domain names

increases dramatically

  • Allow registrants to find and register

domain names best suited to their needs

  • Allow domain names in other non-

English languages

  • Audiences will be able to navigate

using their native language

  • New business models are developed

that capitalize on the capabilities presented by new gTLDs for enhanced

  • nline identity and navigation

DOMAIN NAMES IN NEW LANGUAGES NEW WAVE OF CREATIVITY MORE NATURAL CATEGORIZATION SCHEME INCREASED HIGH QUALITY DOMAIN INVENTORY

slide-20
SLIDE 20

RIGHTSIDE AND THE NEW gTLD PROGRAM

slide-21
SLIDE 21

21

RIGHTSIDE IS UNIQUELY POSITIONED TO CAPITALIZE ON THE NEW gTLD OPPORTUNITY

» End-to-end domain name services platform enables Rightside to market, distribute and offer services

at every stage of a gTLD’s life cycle

» Large owned and operated portfolio of new gTLDs drives new opportunities » Existing platform enables easy distribution of O&O and other gTLDs (more than 150 gTLDs) » Complementary product offerings drive usage of new gTLDs » Expertise in the identification and distribution of premium priced domain names » Long operating history and industry expertise has enabled strong relationships with ICANN and other

industry partners

slide-22
SLIDE 22

22

COMPREHENSIVE SUITE OF PRODUCTS & SERVICES

REGISTRY

»

Plans to offer one of the largest portfolios of new gTLDs

»

30 new gTLDs currently in portfolio

»

67 other active applications to be resolved REGISTRAR

»

#1 Wholesale Registrar

»

#2 Registrar Overall

»

20k+ resellers & 250k+ customers

»

16M+ domains under management

»

Registrant domain privacy protection

»

Email hosting

»

Website builder tools

»

Website hosting plans

»

Marketing / promotional services

»

Third-party website security services

»

Experienced brokerage team driving sales and distribution of

  • wned and third party premium

domain names

»

Premium domain name expertise to identify and price premium domain names for new gTLDs OFFERINGS

»

Premium domain names

»

Auction services

»

Monetization services

DOMAIN NAME REGISTRATIONS PREMIUM DOMAIN SERVICES VALUE ADDED SERVICES

slide-23
SLIDE 23

23

RIGHTSIDE – REGISTRAR DISTRIBUTION AT SCALE

WHOLESALE SOLUTIONS DIRECT TO CONSUMER PLATFORM

  • Direct customer relationships
  • Ability to control purchase path

» E.g.: Feature O&O gTLDs at renewal

  • Incentivize through pricing and packaging
  • Ability to influence offerings through API

» Feature O&O gTLDs in purchase path

  • Incentivize through pricing and packaging

CUSTOMERS SERVED

>250K >2M

NAMES REGISTERED ACTIVE RESELLERS

>20K >14M

DOMAINS UNDER MANAGEMENT

slide-24
SLIDE 24

24

RIGHTSIDE REGISTRY PLATFORM MAKES IT EASY FOR REGISTRARS TO DISTRIBUTE RIGHTSIDE gTLDs

»

DPML

»

Extended claims

»

Tiered pricing

»

Others

»

SRS Module

»

DNS Module

~200 gTLDs

»

Built for Registrars

»

Single technical certification

»

24/7 OT&E test scheduling

  • Proven Platform:

» Over 150 gTLDs

launched on Rightside back-end to date, across Sunrise, Landrush/EAP and GA

» All major registrars

distributing Rightside gTLDs

  • Distribution Efficiencies:

Registrars already plugged in are fast tracked through the onboarding process for all registries leveraging Rightside back-end

»

1 Bank Account for all gTLDs

»

Pooled Registry connections

»

Master Service Agreement

CORE CUSTOMIZABLE ADD-ONS SCALABLE REGISTRY PLATFORM

slide-25
SLIDE 25

25

DATA-DRIVEN APPROACH TO IDENTIFY gTLD INVESTMENTS

  • .ATTORNEY
  • .ENGINEER
  • .ACTOR
  • .DENTIST
  • Over 400K ABA members
  • Over 400K IEEE Members
  • Over 2.4M actors listed on IMDB
  • Over 150K dentists in the ADA

OPPORTUNITIES ADDRESSABLE MARKETS

  • .IMMOBILIEN
  • .KAUFEN
  • 1.5MM houses available for sale or rent in Germany
  • Nearly 500K retail stores in Germany and Austria
  • ~285k domain names containing 'consulting'
  • ~225k domain names containing ‘reviews'
  • ~120k domain names containing ‘software'
  • .CONSULTING
  • .REVIEWS
  • .SOFTWARE
  • Consultants
  • Review Sites
  • Software Professionals
  • .DEMOCRAT
  • .REPUBLICAN
  • Over 40MM Registered Democrats
  • Over 30MM Registered Republicans
  • Over 500K elected officials

RIGHTSIDE gTLDs

  • 4.5MM Army veterans
  • 650K active Air Force personnel
  • 580K active Navy personnel
  • .ARMY
  • .AIRFORCE
  • .NAVY
slide-26
SLIDE 26

26

RIGHTSIDE: A LEADER IN THE NEW gTLD PROGRAM (1)

(1) Registration volume and revenue estimates as of July 11. (2) Rightside revenue includes estimates for Rightside gTLD sales, new gTLD sales at eNom and Name.com and fees in connection with our registry back-end platform. (3) Registrar channel distribution defined as the .COM market share (by registrar) that is distributing new gTLDs. For example, if eNom is ~10% of the .COM market and because eNom is distributing new gTLDs, that 10% is part of the 90%+.

New TLD Program Rightside Registry Platform (2) Rightside Registrar Rightside Registry Rightside Total TLDs in Sunrise / GA: 255 / 161 152 / 108 207 / 156 15 / 9 207 / 156 Registrar Channel Distribution (3): 90%+ 90%+ N/A 90%+ 90%+ Domain Registrations: 1.5m 758k 153k 36k 181k

slide-27
SLIDE 27

27

THE NEW gTLD PROGRAM HAS CREATED REVENUE GROWTH OPPORTUNITIES FOR RIGHTSIDE

  • 1. Domain name registrations in Rightside O&O gTLDs
  • Registration revenue driven by O&O and third party registrars
  • 2. Domain name registrations on Rightside O&O Registrar
  • Growth in registrations driven by O&O and third party gTLDs
  • Average price of a domain name in a new gTLD is approximately 2x that of .com
  • 3. Additional opportunities that take advantage of Rightside registry and

registrar platforms

  • Infrastructure
  • Value-added Services
  • Premium domain names
slide-28
SLIDE 28

28

ILLUSTRATIVE POTENTIAL UNIT ECONOMICS

Strong direct margin (1) potential on Rightside’s exclusively owned & operated gTLDs

RIGHTSIDE REGISTRAR SELLS VERISIGN gTLDs RIGHTSIDE REGISTRAR SELLS RIGHTSIDE REGISTRY NEW gTLDs RIGHTSIDE REGISTRAR SELLS THIRD-PARTY REGISTRY NEW gTLDs

* For illustrative purposes only, does not demonstrate actual revenue

~10 - 15%+ ~30%+ ~100%

.COM .PHOTOGRAPHY .NINJA

(1) Direct margin defined as Registration revenue less fees paid to the Registry or ICANN.

slide-29
SLIDE 29

EXAMPLES OF TLD USAGE

slide-30
SLIDE 30

30

FULLY DEVELOPED WEBSITES

PERFORMLY.SOCIAL – A SOCIAL MEDIA ROI SOFTWARE SITE FROM MEDIABRANDS VIVA.SOCIAL – SOCIAL CONTENT CREATORS TORINOFC.FUTBOL – OFFICIAL WEBSITE FOR TORINO FC BRITISH.REVIEWS – REVIEWS ON ANYTHING BY BRITISH REVIEWERS

slide-31
SLIDE 31

31

FULLY DEVELOPED WEBSITES (CONT’D)

WASH.NINJA (AND CARWASH.NINJA WHICH REDIRECTS TO WASH.NINJA) – STARTUP CAR CLEANING BUSINESS SOAP.NINJA – MALAYSIAN SOAP MAKING COMPANY ANALYZER.NINJA – ANALYZES WEBSITES FOR SEO STATS, PAGE RANK, SOCIAL MEDIA STATS AND MORE FINDMY.NINJA – TALENT SEARCH BUSINESS

slide-32
SLIDE 32

32

SOCIAL MEDIA AGGREGATION

ANALYSIS.NINJA – A DATA AGGREGATION SITE BY AVINASH KAUSHIK, DIGITAL MARKETING EVANGELIST AT GOOGLE SWIFT.SOCIAL – A SOCIAL NETWORK FOR SWIFT PROGRAMMING LANGUAGE MIXTAPE.NINJA – A HIP-HOP ORIENTED SOCIAL NETWORK CRAFTS.SOCIAL – A WORDPRESS SITE THAT AGGREGRATES CRAFT TRENDS FROM DIFFERENT SOCIAL NETWORKS

slide-33
SLIDE 33

33

WORDPRESS / TUMBLR

THERECIPE.NINJA – A RECIPE SITE USING WORDPRESS MOBILEGAMES.NINJA – APP REVIEWS FOR MOBILE DEVICES USING WORDPRESS PLAYPEN.NINJA – PERSONAL BLOG USING BLOGGER GOTH.NINJA – A GOTH NINJA FASHION BLOG USING TUMBLR

slide-34
SLIDE 34

34

TLD REDIRECTS (1)

REDIRECTS TO AN ALTERNATIVE WEBSITE

  • firephone.reviews – redirects to Amazon's fire phone page
  • premierleague.futbol – redirects to the English Premier League website
  • welshliberal.democrat – redirects to Welsh Liberal Democrats website
  • manoloblahnik.social – redirects to Manolo Blahnik website
  • tax.social – redirects to taxblog.com a wordpress tax blogging site with more than 60,000 members
  • cubicle.ninja – redirects to cubicleninjas.com, a web development and creative design company
  • michaelflatley.dance and flatley.dance – redirect to michaelflatley.com, the official website of Michael Flatley
  • millerlite.pub and lite.pub – redirects to millerlite.com
  • selfies.ninja – redirects to wikipedia page for Ninja

REDIRECTS TO SOCIAL MEDIA PAGES

  • grainger.social – redirects to Grainger's facebook page
  • gateprotect.social – redirects to Gateprotect's facebook page
  • internetx.social – redirects to InternetX's (a German ISP) facebook page
  • zumbafit.dance – redirects to an instructors page on zumba.com
  • pics.ninja – redirects to a personal Google+ page
  • trombone.ninja – redirects to a personal twitter page

OTHER REDIRECTS

  • Microsoft registered sites (e.g. excel.ninja, msn.dance and xbox.reviews) redirect to a Bing search for the sld (excel, msn, xbox)

(1) TLD redirects offer a better name for a registrant to use in cases where the URL cannot be completely changed. TLDs offer the first point of entry for using / renaming existing sites: registrants have the

  • pportunity to change their name, but there's a process to go through before a full renaming due to SEO considerations, existing referrals, etc.
slide-35
SLIDE 35

35

TLDs REGISTERED BY BRANDS

EXAMPLES OF BRANDS THAT HAVE REGISTERED DOMAINS BUT ARE NOT BEING USED YET

  • amazon.consulting – Amazon
  • wal-mart.reviews – Walmart
  • yahoo.ninja – Yahoo
  • foxmovies.reviews – 20th Century Fox
  • nike.social – Nike
  • hurley.moda – Hurley
  • canon.reviews – Canon
  • citibank.social – Citibank
  • tylenol.reviews – Johnson & Johnson
slide-36
SLIDE 36

FINANCIAL OVERVIEW

slide-37
SLIDE 37

37

FINANCIAL HIGHLIGHTS

  • Consistent, steady historical growth in the core registrar business
  • Registry business expected to accelerate growth
  • Recurring revenue financial model
  • O&O gTLDs create margin expansion opportunity
  • Strategic investments to capitalize on the new gTLD opportunity
  • Attractive long-term business model
slide-38
SLIDE 38

38

CONSISTENT, STEADY GROWTH IN THE CORE REGISTRAR BUSINESS

»

Stable and consistent revenue growth in the core registrar business continued through 2013

»

Overall growth historically impacted by volatility in the aftermarket segment

»

Overall growth expected to accelerate as the registry business continues to scale

($ Millions)

Registry business expected to accelerate growth

$96 $113 $127 $142 $33 $38

11% 17% 13% 12% 12%

2010 2011 2012 2013 Q1 2013 Q1 2014

($ Millions)

$96 $113 $127 $142 $33 $38 $43 $48 $46 $44 $12 $7

$139 $160 $173 $185 $46 $45

8% 15% 8% 7% (3%)

2010 2011 2012 2013 Q1 2013 Q1 2014

Domain Name Aftermarket

DOMAIN NAME REVENUE & GROWTH TOTAL REVENUE & GROWTH

slide-39
SLIDE 39

39

RECURRING REVENUE FINANCIAL MODEL

Strong recurring revenue with subscription accounting for 70%+ of total revenue

$96 $113 $127 $142 $43 $48 $46 $44 $139 $160 $173 $185 2010 2011 2012 2013 Subscription Revenue Non-Subscription Revenue

69% 70% 73% 76%

slide-40
SLIDE 40

40

STRATEGIC INVESTMENTS TO CAPITALIZE ON THE NEW gTLD OPPORTUNITY

  • Invested ~$18 million in application fees for new gTLDs
  • Early onboarding of strategic resellers at lower margin to secure distribution of new O&O gTLDs
  • Investment in gTLDs and distribution infrastructure ahead of the new gTLD program
  • Investment in infrastructure required for being a standalone public company
  • Acquisition of Name.com in Q4 2012 for $18 million
  • Hired 33 FTEs to drive the new gTLD program and operations
  • Operating expense investment for new registry business of $8.4 million in 2013 and $2.3 million in

Q1 2014

slide-41
SLIDE 41

41

FINANCIAL SUMMARY

68% 69% 73%

Note: Please refer to the GAAP to Non-GAAP Reconciliation in the appendix for Adjusted EBITDA reconciliation.

($ Millions)

Historical

CY2011A CY2012A CY2013A Q1 2013A Q1 2014A

Domain services $112.6 $126.9 $141.6 $33.5 $37.5 Aftermarket & Other 47.8 46.1 43.6 12.4 7.0 Total Revenue $160.5 $173.0 $185.2 $45.9 $44.6 Service costs $111.3 $127.5 $145.3 $35.6 $38.3 Sales and marketing 6.2 8.8 10.3 2.5 2.8 Product development 9.2 9.7 11.9 2.6 3.9 General and administrative 18.0 19.9 25.6 5.5 6.7 Amortization of intangible assets 9.4 8.3 7.9 2.0 1.7 Gain on other assets, net

  • (4.2)
  • (4.9)

Other (income) expense, net 0.0 0.1 0.1 (0.0) (1.3) Income (loss) before income taxes $6.4 ($1.2) ($11.6) ($2.3) ($2.6) Income tax benefit (expense) (2.6) 0.2 0.9 0.6 (1.4) Net income (loss) $3.8 ($1.0) ($10.7) ($1.7) ($3.9) Adjusted EBITDA $31.4 $22.8 $8.0 $3.6 ($2.3)

slide-42
SLIDE 42

42

INVESTMENT HIGHLIGHTS

ESTABLISHED INDUSTRY LEADER

  • Largest wholesale registrar and second largest gTLD registrar in the world
  • Over 16 million domain names under management including 2.5 million names registered directly through the retail channel
  • More than 20,000 active resellers in the wholesale network and over 250,000 consumers and small businesses served through retail outlets

FAVORABLE MARKET DYNAMICS AND A MULTI-BILLION DOLLAR OPPORTUNITY

  • 271 million domain names registered worldwide as of 2013 (1)
  • Estimated over 85 million customer registrations of new domain names in 2013 (2)
  • Strong expansion opportunity in developed market with a large untapped opportunity in several developing markets globally

LEADING PROPRIETARY TECHNOLOGY PLATFORM

  • Comprehensive registrar offering provides resellers with flexible integration options via Application Programming Interface

("API") or a turnkey white-label solution

  • Turnkey reseller solution allows a reseller to quickly and easily integrate Rightside’s entire suite of products into its own website
  • Additional value-added services include website hosting, email hosting, website building tools and domain privacy protection
  • Aftermarket services to help customers buy, sell and monetize high value domain names

WELL POSITIONED TO CAPITALIZE ON ICANN’S NEW gTLD PROGRAM

  • 30 signed operator agreements with an additional interest in applications or registry operator agreements for 67 new gTLDs
  • Proprietary editorial and algorithmic processes to identify high-value domain names associated with Rightside’s gTLD initiative to sell at a premium
  • Large and diverse distribution network provides channel to efficiently promote the emerging portfolio of exclusive gTLDs
  • Registry operator status will provide differentiated position as the sole supplier of particular gTLDs allowing control of pricing, branding

and availability of such gTLDs

(1) Source: “The Domain Name Industry Brief”, Verisign (April 2014). (2) Source: “The Domain Name Industry Brief”, Verisign (April 2014) and Management estimates.

slide-43
SLIDE 43

43

INVESTMENT HIGHLIGHTS (CONTINUED)

RECURRING REVENUE FINANCIAL MODEL

  • Strong subscription base accounting for ~70% of total revenue
  • Stable unit economics of approximately $10 annual revenue per domain name
  • Renewal-driven subscription revenue contributes to positive operating cash flow

MULTIPLE VECTORS TO DRIVE SIGNIFICANT GROWTH

  • Expand the large and diversified distribution network
  • Launch large offering of new gTLDs and establish the highly strategic registry business
  • Significant upsell opportunities through value-added services and extensive aftermarket services
  • International gTLD expansion opportunity via third-party registrars and resellers

EXPERIENCED MANAGEMENT TEAM WITH LONG HISTORY IN THE DOMAIN NAME INDUSTRY

  • Long and successful track record in leadership positions across virtually every aspect of the domain name services business
  • Diversified operating expertise spanning many of the largest and most successful registries, registrars, premium name service companies and hosting

companies

slide-44
SLIDE 44

APPENDIX

slide-45
SLIDE 45

45

OVERVIEW OF THE DOMAIN NAME ECOSYSTEM

  • Maintain the system of record for the registration of domain names associated with a given

gTLD (e.g., .com, .org)

  • Set wholesale pricing and establish key policies for the eligibility for registering a domain name

for the applicable gTLD

REGISTRIES REGISTRARS PREMIUM DOMAIN SERVICES PROVIDERS WHOLESALE CUSTOMERS

  • Register domain names on behalf of customers with the relevant registry
  • Set wholesale and retail prices and maintain the ongoing business relationships with resellers

and registrants, but pay fees to the relevant registry, as well as to ICANN for the gTLDs administered by ICANN, for each domain name registered

  • Specialize in the sale or ongoing monetization of higher-value domain names through auctions,

domain name brokerage networks and advertising services

DOMAIN TECHNOLOGY SERVICES PROVIDERS

  • Provide specialized solutions to registrars and registries that enable them to deliver the complex

and high-availability services required to satisfy the requirements of registrants, ICANN and the ecosystem of industry participants

  • Not-for-profit corporation that manages the domain name registration system and the system for

routing Internet users to the correct domain name or website

ICANN RETAIL CUSTOMERS

  • Resellers including large e-commerce websites, Internet service providers, and web-hosting

companies

  • Consumers and businesses that register domain names for personal or business use
slide-46
SLIDE 46

46

INTERNET PERSONALIZATION CONTINUES TO EVOLVE

Category Domain Range Examples Year Introduced # of Domains (000s) Est. Wholesale Cost

  • Est. Annual

Registry Revenue ($M)

Legacy TLDs 1M+

  • .com

1985 113,957 $7.85 $810 – $980

  • .net

1985 15,278 6.93 100 – 120

  • .biz

2001 2,674 8.63 20 – 25

  • .info

2001 5,814 8.16 40 – 50 ccTLDs 100K – 1M+

  • .uk

1985 8,544 5.86 45 – 55

  • .de

1986 13,714 4.37 55 – 65

  • .cn

1990 4,785 4.86 20 – 25 Existing gTLDs 100K – 1M

  • .name

2000 193 5.77 0.8 – 1.2

  • .mobi

2005 970 7.25 6 – 8

  • .asia

2007 287 10.00 2.5 – 3.5

  • .xxx

2011 109 62.00 6 – 7 New gTLDs < 100K

  • .guru

2014 60 20.00 1 – 1.4

  • .bike

2014 11 20.00 0.1 – 0.3

  • .club

2014 61 8.05 0.4 – 0.6

Present 2000s 1980-90s

Source: ICANNWiki, DomainTools, Company estimates.

” v2”

slide-47
SLIDE 47

47

NEW gTLD MARKET OPPORTUNITY

1,300 // Applied for new gTLDs (50% Generic / 50% Brand) 1,900 // Applications for new gTLDs >$350 million // Total initial investment in application fees for new gTLDs ~$18 million // Rightside’s initial investment in application fees for new gTLDs 255 // New gTLDs currently available online ~1.4 million // Domain names registered to date

Participation from a wide range of applicants including Rightside Diversified Internet players such as Google and Amazon Consumer brands such as Nike and Walmart

A Top Level Domain, or TLD, are the characters to the right of the last dot in a domain address (e.g., “.com”). In 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) unveiled the new generic TLD (gTLD) program to significantly expand the universe of gTLDs available for businesses and consumers to register as part of a domain name.

slide-48
SLIDE 48

48

gTLD LAUNCH PHASES

.Futbol, .Reviews, .Social, .Dance, .Democrat, .Immobilien, .Ninja, .Pub, .Moda .Consulting, .Kaufen, .Rocks, .Actor .Haus, .Republican RIGHTSIDE’S REPRESENTATIVE gTLDs

Sunrise

TRADEMARK HOLDERS

(65-70 days)

  • Trademark holders may register their trademarked

domain names during this phase

  • Only rights holders who have registered with the

Trademark Clearing House (TMCH) may purchase domain names during this time

  • Both the TMCH and the registrar may require fees

for registration during this phase

  • Pre-registration is also available during this time

Landrush

EARLY APPLICATION

(30 days)

  • The general public including individuals and

companies may register for a domain name during this phase

  • A small application fee will apply during this early

registration opportunity

  • If more than one party applies for the same

domain name during this phase, a private auction will be held with the domain name going to the highest bidder

  • This phase is especially important for those

without a trademark looking to build a strong

  • nline presence
  • Pre-registration is also available during this time

General Availability

FIRST-COME, FIRST-SERVED

  • Anyone may register for a domain name during

this period of open registration

  • Domain names will be assigned on a first-come,

first-served basis

  • Premium domain names which constitute popular

terms will also be available during this time

  • They will be sold through “buy now” options and

periodic auctions

slide-49
SLIDE 49

49

Non-GAAP FINANCIAL MEASURES

To provide investors, analysts and others with additional information regarding the Company’s financial results, this presentation includes adjusted earnings before interest, income taxes, depreciation and amortization, or “Adjusted EBITDA”, a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure has been included in the Appendix to this presentation. The Company’s non-GAAP Adjusted EBITDA financial measure differs from GAAP net income (loss) in that it excludes certain expenses such as taxes, gain on other assets, net, depreciation, amortization, stock-based compensation, and the financial impact of acquisition costs. The Company uses this non-GAAP financial measure to understand and evaluate it financial performance and operating trends, including period to period comparisons, to prepare and approve its annual budget and to develop short and long term operational plans. The exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period to period comparisons of the Company’s underlying recurring revenue and operating costs which is focused more closely on the current costs necessary to utilize previously acquired long-lived assets. In addition, management believes that it can be useful to exclude certain non-cash charges because the amount of such expenses is the result of long-term investment decisions in previous periods rather than day-to-day operating decisions. Accordingly, the Company believes that this non-GAAP financial measure provides useful information to investors and others in understanding and evaluating the Company’s operating results in the same manner as the Company’s management and in comparing financial results across accounting periods and to those of peer companies. The use of this non-GAAP financial measure has certain limitations because it does not reflect all items of income and expense that affect the Company’s operations. The Company compensates for these limitations by reconciling the non-GAAP financial measure to the most comparable GAAP financial measure as set forth in the Appendix to this presentation. This non-GAAP financial measure should be considered in addition to, not as a substitute for, measures prepared in accordance with GAAP. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore financial comparability may be limited. The Company encourages investors and others to review the Company’s financial information in its entirety and not rely on a single financial measure.

slide-50
SLIDE 50

50

GAAP TO Non-GAAP RECONCILIATION

(1) Net gains on sales and withdrawals of interest in gTLD applications included in gain on other assets, net. (2) Represents the depreciation expense of our long-lived tangible assets. (3) Represents the amortization expense of our finite lived intangible assets, including that related to our investment in media content assets, included in our GAAP results of operations. (4) Represents the fair value of stock-based awards and certain warrants to purchase our stock included in our GAAP results of operations. (5) Acquisition and realignment costs include such items, when applicable, as (a) legal, accounting and other professional fees directly attributable to acquisition activity and (b) employee severance and other payments attributable to acquisition or corporate realignment activities.

($ Millions) Historical CY2011A CY2012A CY2013A Q1 2013A Q1 2014A

Net income (loss) $3.8 ($1.0) ($10.7) ($1.7) ($3.9) Add (deduct) Income tax expense (benefit) 2.6 (0.2) (0.9) (0.6) 1.4 Interest & other expense, net 0.0 0.1 0.1

  • (1.4)

Gain on gTLD application withdrawals, net (1)

  • (4.2)
  • (4.9)

Depreciation (2) 5.8 5.2 6.5 1.6 2.5 Amortization of intangible assets (3) 9.4 8.3 7.9 2.0 1.7 Stock-based compensation (4) 9.7 10.1 9.5 2.3 2.0 Acquisition and realignment costs (5)

  • 0.3

0.0 0.0 0.3 Adjusted EBITDA $31.4 $22.8 $8.0 $3.6 ($2.3)