I think much of the blame has to lie at the feet of the poor adoption among destination marketers, but indeed it would be sad if all these names just end up being adsense sites.

My concern is still the high price for these domains - they are very costly relative to other common domains. Will the price come down now that the authentication process has been removed? Price certainly contributed to the slow adoption?

You can’t blame consumers, the travel industry, tourism organizations, etc. for not adopting a product that they really didn’t want or need to begin with. I would argue that your premise that it was a great concept to begin with is false in the sense that there really isn’t a viable market for .travel domains. The market that Tralliance perceived was there - wasn’t interested (which is now obvious), therefore the execution was doomed from the beginning.

The intended sale will not result in changes to management, policies, or to Tralliance’s relationship with the TTPC. We will continue to manage and promote the .travel domain name. Under the new structure, Tralliance will operate more efficiently and cost savings generated from the transaction will allow us to allocate more dollars to the promotion of the domain.

You can already see some of the shift. We are making ourselves available to the industry by becoming active participants at assocation meetings and trade shows. Some of our up and coming events are TIA’s NCSTD meeting at the end of February as well as ITB and Le Map Monde in March.

Heidi Siefkas-Cassemiro
Tralliance Corporation, the .travel Registry

Tralliance is sold; dot-travel domain now privately held

February 11, 2008

By Dan Luzadder

Tralliance, the company that controls the dot-travel domain, has been taken private, removing its finances and activities from the scrutiny of public markets.

Until now, Tralliance, the official registry of dot-travel addresses, has been a publicly traded subsidiary of TheGlobe.com, which in turn is publicly traded over the counter.

On Feb. 1, TheGlobe.com announced that it had sold Tralliance to the Registry Management Co., a privately held enterprise.

However, the sale did not change the ultimate ownership or control of the company by travel industry entrepreneur Mike Egan, owner and chairman of TheGlobe.com, and his financial partner, Ed Cespedes, the president of Tralliance, who together own RMC.

“We’re doing this for efficiency reasons,” Cespedes said of the sale. “Let’s face it: It costs a lot of money to keep Tralliance as a public company. It’s money that could be spent in promoting the dot-travel domain instead.”

The sale came close on the heels of significant policy changes at the start of the year that company executives said would allow them to turn the travel-oriented domain from a little-used online marketplace into a major player in the industry.

That process began last fall when Tralliance fired dot-travel’s founder, president and promoter, Ron Andruff, and announced that it would treat the dot-travel domain as a for-profit business, rather than as a service to the travel industry. Andruff, who remains a stockholder and who tried unsuccessfully after his dismissal to buy Tralliance, declined to comment last week.

Bill Maloney, executive vice president of ASTA and a former member of the Travel Partnership Corp., dot-travel’s advisory board, said he was unaware of the sale but added that taking Tralliance private raised some questions in his mind.

“What the industry loses, of course, is transparency,” Maloney said.

The sale also closely follows a decision last month by Tralliance to initiate so-called bulk sales of dot-travel domain names at discount prices. Under the new sales plan, Cespedes said, anyone buying 25,000 or more names will get a rebate.

But so far, just one such sale has been acknowledged by the company: the purchase of 200,000 destination and service-oriented domain names by Egan and Cespedes themselves.

Cespedes confirmed last week that he and Egan had created a new enterprise named LabiGroup, which in turn acquired 200,000 names to help build working destinations. The dot-travel top-level domain has struggled to find buyers willing to actually build dot-travel Web sites and use them for travel-related businesses. Until the LabiGroup purchase, only about 30,000 names had been sold, and most of them have not been used.

“Rather than keep talking about it, we said, ‘We’ll put a bulk purchase program in place and talk to guys who will commit money, real money, to dot-travel,’ ” Cespedes said. “So we are leading by example. We are putting up sites around destinations, around services and around things that we believe people are interested in concerning travel, so that when the millions of people who type in dot-travel every month — some 8 to 10 million are doing so — they will find something they’re looking for.”

Cespedes would not disclose how much LabiGroup paid for those 200,000 names, but even when allowing for pricing discounts, the purchase would have required an estimated $2 million investment.

The sales agreement values Tralliance at $7.3 million.

Benefits to new ownership

Cespedes told Travel Weekly that the new ownership would be invisible to buyers and owners of dot-travel domain names. He said it would reduce fixed costs for Tralliance as it redoubles efforts to raise the profile of the struggling domain-name business and boosts participation in dot-travel within the global travel industry.

Cespedes said the sale would not bring changes to management, policies or to Tralliance’s relationship to TTPC, which was established when the Internet Corporation for Assigned Names and Numbers, better known as ICANN, approved the domain three years ago.

Because TheGlobe.com is publicly traded, Cespedes said he could not comment on details of the transaction beyond what was revealed in the public announcement. But he said TheGlobe.com would offer more details in a regulatory filing with the Securities and Exchange Commission this week.

Terms of the transaction that have been disclosed call for Egan and business affiliates that have invested in Tralliance, primarily other Egan-controlled entities, to waive their interest in convertible promissory notes worth about $4.7 million as well as other fees and debt totaling about $6 million.

An earn-out provision, based on the performance of Tralliance after the sale, could add another $1.3 million to the deal. TheGlobe also will issue 269 million shares of common stock to the Registry Management Co., the company noted.

Cespedes said that under new policies recently approved by TTPC, he and Egan, like other purchasers of dot-travel domain names, have 60 days following the purchase of a dot-travel domain name to open a working Web site for each name.

He said LabiGroup had used a computer program to pick potential names and had then eyeballed each name (e.g. Mississippi.travel, SpringBreak.travel and SpringBreakHotel.travel) to ensure that they were not too long, made sense and were likely to attract travel shoppers.

Meeting the deadline for getting Web sites up and running for each of those 200,000 domain names presents a significant challenge, Cespedes said.

“It’s not only a lot to do but exceptionally expensive,” he said. “We have to build the sites. That takes time and more money. It is a big risk and a big investment, but we’re willing to make it, as we always have been.”

In the end, Cespedes said, there is still a lot of room for bulk and individual sales.

Cespedes said Tralliance was planning a marketing campaign later this year that would include magazine and television advertising.

He said the company had also hired a public relations expert to help raise the profile of the dot-travel domain.

Speculation can be regrettable, and reading such strong personal opinions of withdrawal from the .dot travel initiative is demonstrative of shortsightedness and frustrations from unrealistic expectations.

As representative of the dot travel initiative in Spain and sole authenticator for the Spanish market, I would like to share that there has been significant nervousness in the passed months as the last of reserved domains where being released under ICANN pressures for more transparency and independence.

You judge it as betrayal of a ‘dream’, on the contrary, I think it’s more about shaking the industry out of a lethargy to become a more proactive stakeholder of a TLD domain which depends exclusively on the participation of the industry, which in time will be recognized and valued by users and consumers alike.

Early adopters may not have received enough accolades and recognition by the sector, but frankly setting realistic measures of success is what its all about - because we are not exactly in an industry that is haled by its high rate of innovation, neither for its rapid adoption of innovation.

I believe that the .travel initiative has to be considered within the broader state of affairs of e-commerce. When looking for example at the hotel sector and at the average booking rates by propriety web sites, we can only witness that the bulk of the industry has not even reached Web 1.0 standards, let alone aspiring to reach 2010 with web 2.0 capabilities. Similarly looking at marketing expenses across the board, the hotel industry is a recognised lagger in terms of building in-house marketing expertise to tackle e-commerce with success in a non-merchant dependent business model.

As domain lead concept strategies, e-crm and social media strategies are clearly talked about concepts, these are only practiced with relative success by a few, which by no means constitutes sufficient reason for abandonment of what is proving to be the battle ground for 2008.

So I’m more inclined to follow Jens’s view that there is a shared responsibility by all, but lets be realistic - to achieve successful results in e-commerce, today more than ever its about taking control. We are in 2008, .travel is here to stay - so what are we going to do about it - marketing folks?

Our faith is being tested, traditional forms of marketing, media and advertising are in an all time low, User generated media is challenging forms of appeal and corporate communications.

Nevertheless the .travel initiative is still largely unexplored territory, which demands more from our capacity to manage change and uncertainty more than that which is required in the ‘.com-fortable’ world.

We are in need of strong and sustained leadership; strong brands and determined destinations to use the .travel as part of their online marketing strategies to drive forward their differentiated offer and services.

As representative of the dot travel initiative in Spain and sole authenticator for the Spanish market, I would like to share that there has been significant nervousness in the passed months as the last of reserved domains where being released under ICANN pressures for more transparency and independence.

You judge it as betrayal of a ‘dream’, on the contrary, I think it’s more about shaking the industry out of a lethargy to become a more proactive stakeholder of a TLD domain which depends exclusively on the participation of the industry, which in time will be recognized and valued by users and consumers alike.

Early adopters may not have received enough accolades and recognition by the sector, but frankly setting realistic measures of success is what its all about - because we are not exactly in an industry that is haled by its high rate of innovation, neither for its rapid adoption of innovation.

I believe that the .travel initiative has to be considered within the broader state of affairs of e-commerce. When looking for example at the hotel sector and at the average booking rates by propriety web sites, we can only witness that the bulk of the industry has not even reached Web 1.0 standards, let alone aspiring to reach 2010 with web 2.0 capabilities. Similarly looking at marketing expenses across the board, the hotel industry is a recognised lagger in terms of building in-house marketing expertise to tackle e-commerce with success in a non-merchant dependent business model.

As domain lead concept strategies, e-crm and social media strategies are clearly talked about concepts, these are only practiced with relative success by a few, which by no means constitutes sufficient reason for abandonment of what is proving to be the battle ground for 2008.

So I’m more inclined to follow Jens’s view that there is a shared responsibility by all, but lets be realistic - to achieve successful results in e-commerce, today more than ever its about taking control. We are in 2008, .travel is here to stay - so what are we going to do about it - marketing folks?

Our faith is being tested, traditional forms of marketing, media and advertising are in an all time low, User generated media is challenging forms of appeal and corporate communications.

Nevertheless the .travel initiative is still largely unexplored territory, which demands more from our capacity to manage change and uncertainty more than that which is required in the ‘.com-fortable’ world.

We are in need of strong and sustained leadership; strong brands and determined destinations to use the .travel as part of their online marketing strategies to drive forward their differentiated offer and services.

theglobe.com Announces Intent to Sell Substantially All of the Business and Net Assets of Tralliance Corporation and to Issue Approximately 269 Million New Shares of theglobe.com Common Stock to the Registry Management Company LLC
Friday February 1, 5:06 pm ET

FORT LAUDERDALE, Fla., Feb. 1 /PRNewswire-FirstCall/ — theglobe.com (OTC Bulletin Board: TGLO - News) announced today that it has entered into a letter of intent to sell substantially all of the business and net assets of its Tralliance Corporation subsidiary, and to issue approximately 269 million shares of its common stock, to The Registry Management Company LLC, a privately held entity controlled by Michael S. Egan, theglobe.com’s Chairman, CEO and controlling investor (the “Transaction”).
As part of the purchase consideration for the Transaction, Mr. Egan and certain of his affiliates will exchange and surrender all of their right, title and interest to secured convertible promissory notes in the aggregate principal amount of approximately $4.7 million, accrued and unpaid interest thereon, as well as outstanding rent and miscellaneous fees due and unpaid to Mr. Egan’s affiliates, which amounts collectively equal approximately $6.0 million.

In addition, The Registry Management Company will pay an earn-out to theglobe.com equal to 10% (subject to certain minimums) of The Registry Management Company’s net revenue derived from “.travel” names registered by the Company through May 5, 2015. The net present value of the minimum guaranteed earn-out payments is estimated to be approximately $1.3 million, bringing the total consideration to approximately $7.3 million.

The Transaction is subject to the negotiation and closing of a definitive purchase agreement, receipt of an independent fairness opinion, and shareholder approval. The Transaction is expected to close no earlier than the second quarter of 2008.

Safe Harbor — this press release includes forward-looking statements related to theglobe.com, inc. that involve risks and uncertainties, including, but not limited to, risks and uncertainties relating to whether or not the proposed Transaction will be consummated. No definitive agreement has been entered into between theglobe and The Registry Management Company, and even if one is executed in the future, the anticipated conditions to closing of such an agreement, some of which are specified above, may not be satisfied. Our ability to curtail or reduce expenses also involves many risks and uncertainties. These forward-looking statements are made in reliance on the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. For further information about these and other factors that could affect theglobe.com’s future results and business plans, please see the Company’s filings with the Securities and Exchange Commission, including in particular our Annual Report on Form 10-K for the year ended December 31, 2006 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2007. Copies of these filings are available online at http://www.sec.gov. Prospective investors are cautioned that forward-looking statements are not guarantees of performance. Actual results may differ materially and adversely from management expectations.

Contact:
Edward Cespedes
954-769-5948
edc@corp.theglobe.com