Tralliance, the registry for dot-travel, reached an agreement to be acquired earlier this month in a financial restructuring that will take the company private but not change ultimate control and ownership by Mike Egan and Ed Cespedes. Cespedes, president of Tralliance, talked with Travel Weekly technology editor Dan Luzadder about the sale and other recent changes for dot-travel.
Q: Why was it necessary to sell Tralliance in this financial restructuring? What does the company gain, and what does the dot-travel domain gain?
A: Tralliance was part of a public company, and because it was basically the sole subsidiary of the TheGlobe.com, it had placed upon it all the operating costs of being a public company, the heavy accounting and legal costs, the Securities and Exchange Commission reporting, all of which amounted to millions of dollars a year in costs that could be better used by promoting the domain.
Q: Your SEC filing last week indicated that closing the deal is not anticipated until at least the second quarter. What is there to accomplish between now and then?
A: Basically, because we are public, we have to get a shareholder vote and shareholder approval. That is the only holdup in completing the transaction.
Q: You have had at least one other offer for Tralliance, from [Tralliance founder and former President] Ron Andruff. Have there been other offers for the company?
A: I can't confirm or deny any offers for the company. You believe that we have had an offer from Ron Andruff because he told you that. I don't believe I have said we had an offer.
Q: ASTA's Bill Maloney remarked last week that the sale raises some concern about transparency at the company. With the sale, how will the travel industry know what is happening with the dot-travel domain?
A: Dot-travel was launched privately and was acquired by a public company. So being public was never part of the transparency of dot-travel. Tralliance still has to meet the requirements of ICANN [Internet Corporation for Assigned Names and Numbers] in reporting, but it is in our interest to keep the industry informed. I understand how, on the surface, someone might say not being public is less transparent, but that is just not the case.
Q: When dot-travel was originally conceived, it was broadly seen as an industry tool and was specifically approved by ICANN as a "sponsored domain" -- sponsored by the travel industry, for the industry. What role does the industry play now, in light of these changes, and what impact does the sale have on that role?
A: There is really no impact. The industry has always been represented by the Travel Partnership Corp. [the advisory body to dot-travel], and as part of the transaction TTPC has agreed to continue as the sponsor, so that doesn't change at all.
Q: The recent major investment by you and Mike Egan, the purchase of some 200,000 dot-travel domain names, has brought capital to the company and arguably more places for dot-travel searchers to go. What else does it accomplish?
A: What it will do is show the world that the new policies at Tralliance are working. It shows that when you go to any one of these Web sites, whatever the topic might be, generic or specific, you will find relevant, robust content, and we hope that this will, at the end of the day, make dot-travel very important as a domain.
The reality is, people need to step back and look a little bit further than the surface of the policy changes. I can't vouch for what the previous management thought, but I have to think they thought this would be a real, valid and relevant domain. In that sense, we think exactly alike. But in a business sense we are more realistic in how to accomplish that.
Q: Under the new policies, domain name buyers have 60 days to get a Web site up and running. When will we begin seeing this new crop of places to visit on dot-travel?
A: You will begin to see them 60 days from Dec. 21. The actual policy says a site must be up in 60 days, but if it does not meet policy the owners will be notified and given 30 days to cure any problems. So basically, between 60 and 90 days from Dec. 21 is when you will see the first new sites.
Q: What sort of reactions have you gotten from the industry in general about what you are doing -- the policy changes and the sale?
A: When we first announced policy changes, we were actually surprised by the intense amount of support we got. The ugly little secret about dot-travel was always how many people got rejected when they tried to get names. It was just that policies were so restrictive. It was not so much Delta Air Lines coming in and saying 'give me AmericanAirlines.travel.' It was more the nuances of the names they were designing. There was no way to control all the derivatives, legitimate or otherwise, that people were entitled to. We got an initial influx of calls from people wanting to know if they could now get this name or that.
We also had some negative perspective from people who didn't really understand what dot-travel is all about, because anyone with any size is already heavy duty with dot-com addresses. They have been promoting them for years, and the rise of another domain might be seen as causing issues. We feel the new policies are best suited to address those issues. We will see how it goes.
To contact reporter Dan Luzadder, send e-mail to [email protected].