following sections give answers to the specific questions posed in the
ICANN application in the light of the business plan for new operations presented
in sections D18.104.22.168 – D22.214.171.124.9
The services to be provided by the Registry are given in full in sections
listing of the revenues of each service are given in section D126.96.36.199. A
is presented in section D188.8.131.52.5 giving a full breakdown of the
anticipated revenues and direct costs associated with each service. Quarterly
pro-forma revenue projections for the first five years in the 90% (Pessimistic
Scenario), 50% Expected Scenario, and the 10% Optimistic Scenario are
given in the attachment in pages F4-F7.
The marketing plan is described in section D184.108.40.206.
estimates of 90% (Pessimistic Scenario), 50% Expected Scenario, and the
10% Optimistic Scenario are given in the Financial Projections attachment
in pages F1-F3. Revenue and P&L projections relating to each of these
scenarios are given respectively in pages F4-F6 and pages F10-F15. These
projections are based on our analysis of the market as given is section
the Financial Projections Attachment we and two potential cost scenarios. The
first of these the “Growth Scenario” details the planned level of expenditures
that will be made if our realized revenues in the first year correspond to
either those of our 50% probability “Expected Scenario” or the 10% likelihood
“Optimistic Scenario” detailed above. The other cost scenario examined will
be called the “No Growth Scenario” and details the planned level of
expenditures if our realized revenues in the first year correspond to those of our
90% likelihood pessimistic scenario. The Growth and the No-Growth cost
scenarios apply only to fixed costs. Variable costs are the same across both
scenarios. We feel that it is reasonable to use only two fixed cost scenarios
as a very large proportion of our costs are variable as we will outsource the
majority of the work involved with application processing.
for outsourcing our Application Processing and trade mark search
functions are given in D220.127.116.11.
Plans for building the management team are given above in section D18.104.22.168.1
this proposal we request a five year term for the Registry Agreement. The
establishment of operations is considerably more complex than for the
.com/.net/.org registries. We expect that the registry will therefore only be able to
become active after approximately six months of initial start-up operations.
For this reason we request a period slightly longer that the NSI agreement
break down of marketing projections in each scenario is given in D22.214.171.124.3
and the referenced tables, and the resulting revenues are given in
D126.96.36.199.4 and the referenced tables. The resulting profit and loss in each
scenario is given in D188.8.131.52.7 and in the referenced tables.
required will be $5,000,000 as specified and explained in section
D184.108.40.206.9. This will be drawn from existing commitments from our investors
as detailed in section D13.4.4
risks are discussed in section D220.127.116.11. The break-even analysis
shown on page F-19 shows that we break even at very low levels of obtaining
only 5,879 registrations in the second year of operations and 5,521 in the
third year. As a result we believe that the probability of non-profitability
under the proposed plan is very low.
failure of the Registry is addressed in the Technical Capabilities and
Plan Section III of this document.
break even charts on the attachment for page F-19 show that an extremely
low number of registrations is necessary to make our operation a viable
concern. We therefore believe that it is extremely unlikely that the .biz
registry will fail as a business.
addition, Affinity Internet Inc established a capital fund of $60,000,000 of
only $9,000,000 has been drawn. We therefore have ample funds to
support the Registry even in the case that the world shows almost no interest in
the .biz TLD.
the worst case, our Sponsoring Organization bizTRAC has agreed that if in
any given year there are less than 1,000 registrations under the new TLD
that our fees payable to that organization would be reduced from $300,000
to $100,000. Under these circumstances we would also request ICANN to
reduce our annual payment to them from $200,000 to $50,000. We would
expect that this request would be granted in the interests of Internet
Stability. Under these circumstances we could also dramatically reduce other
costs by discontinuing all marketing, cutting back staff and employing only
a small number of people (possibly just one or two) to process applications
in house. Our minimum annual maintenance budget is given in the following
order to support this budget we would need only 397 registrations in the .biz
TLD. If this was not achieved we could certainly make up the short fall from
our existing capital.
all of these reasons we feel that the business failure of the “.biz” domain
during the term of our contract is close to impossible.
D13.4 Supporting Documentation
The following documentation is included with this submission