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September 25, 2002

Two years after it acquired domain re-seller Afternic for $48 million, domain name registrar Register.com said it would close the unit. 

During a brief conference call Wednesday to announce lowered revenue expectations for the third quarter, the New York-based Register.com said the secondary market for re-selling domain names was not enough to keep the unit open. 

"After two years and a lot of hard work, we've determined the (domain re-selling) segment does not have sufficient opportunity to continue devoting resources toward it," Register.com CEO Richard Forman said. 

As a result of the charges it will have to take for shuttering the Afternic unit, and because of overall softness in sales this year, the company said it doesn't expect a profit for the third quarter. It expects sales to come in between $23 million and $25 million, reversing the 5 percent sequential growth it had previously expected from the second quarter. During the same time a year ago, Register.com took in $29.5 million. 

In addition, penalties for charge backs from apparent credit card fraud cases have become a bigger problem for the company this year. Forman said an increase in penalties related to canceled credit card charges, many of them from overseas accounts, had exposed the company to the risk of losing its credit card processing rights. Forman took no questions during a conference call Wednesday, but said the company is working to reduce the charge backs and would provide more details when it releases third quarter results in early November. 

More at: http://www.atnewyork.com/news/article.php/1469711