10 August 2009

Ancestry.com: Going public

Ancestry.com is planning to go public. Its IPO filing indicated that one reason for the decision is increased competition from the LDS Church, which will be putting millions of records online in the next few years.

The Boston Globe reported that the SEC filing (Monday, August 3) seeks approval to sell $75 million in stock and that it earned $8.1 million in the first half of 2009 on revenues of nearly $100 million. It was founded in 1984 as Ancestry Publishing and has more than 600 employees.

The Salt Lake Tribune reported that the subscription company - formerly known as The Generations Network - reported revenues of $197.6 million and a profit of $2.38 million in 2008.

The filing indicated it might use some of the new capital for acquisitions of other companies, products or technologies.

According to the SEC prospectus, Ancestry.com said the stock sale will take place sometime after 180 days from its filing on August 3. It may have to pay 25% of what it raises to CIT Lending Services to reduce its debt. The long-term debt of $117 million comes from the December 2007 sale of majority ownership to Spectrum Equity Investors and affiliates.

In required warnings about the risks of owning stock in the company, Ancestry.com cited competition, particularly from the family-research arm of The Church of Jesus Christ of Latter-day Saints that is putting millions of its records online over the next couple of years.

The company now has 44 shareholders who own 76.6 million shares of common stock.
An additional report on Domain Name Wire concerned domain disputes.

In its SEC filing to go public, Ancestry.com warned that it may have difficulty protecting its brand in domain names.

The company just took its first step to protecting its name by filing four separate arbitration requests for domain names with World Intellectual Property Organization. It seems that the company filed four “low hanging fruit” cases to establish a precedent.

The no-brainer is wwwancestry.com, which you have to wonder why the company waited to go after until it filed to go public. It is also seeking to get ancestray.com, ancestrys.com, ancestry1.com, 1ancestory.com, and ancestory1.com.

Although fighting for typos of its domain names probably won’t be difficult, its bigger challenge will be securing the domain name ‘ancestry.tld’ in country code domains and new top level domain names, should it choose to do so. The company identified country code domain names as a major challenge in its SEC filing.
In a related post on Domain Name Wire, Ancestry.com warned about country code domains, and that challenges in acquiring those country domain names as a risk.

If we are unable to protect our domain names, our reputation and brand could be affected adversely.

We have registered domain names for website destinations that we use in our business, such as Ancestry.com, Genealogy.com and myfamily.com. However, if we are unable to maintain our rights in these domain names, our competitors could capitalize on our brand recognition by using these domain names for their own benefit. In addition, our competitors could capitalize on our brand recognition by using domain names similar to ours.

Domain names similar to ours have been registered in the United States and elsewhere, and in many countries the top-level domain names “ancestry” or “genealogy” are owned by other parties. Though we own the “ancestry.co.uk” domain name in the United Kingdom, we might not be able to, or may choose not to, acquire or maintain other country-specific versions of the “ancestry” and “genealogy” domain names.

Further, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights varies from jurisdiction to jurisdiction and is unclear in some jurisdictions. We may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of, our brand or our trademarks or service marks. Protecting and enforcing our rights in our domain names and determining the rights of others may require litigation, which could result in substantial costs and divert management attention. We may not prevail if any such litigation is initiated.

The Domain Name Wire commented that Ancestry is not a trademark by itself, and that persuading a judge or arbitrator to hand over a domain could be tough.

For more information, read the complete articles at the links above.

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