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IDN-ROI-Calculator---VeriSign---Security-(SSL-Certificates-

VIEWS: 10 PAGES: 6

IDN-ROI-Calculator---VeriSign---Security-(SSL-Certificates-

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									Instructions

Internationalized Domain Names (IDN) Return on Investment (ROI) Model
This spreadsheet allows you to calculate the approximate economics for sales of Internationalized Domain Name (IDN) registrations. Actual results may vary and will depend upon many factors including similarity between your forecasted data and your actual data. This model may not be suitable for all registrars or situations, and return on investment is not guaranteed. Follow the instructions below. You may wish to print the instruction to make using the model easier. The instructions are also on each sheet as "comments" (noted with a red mark in the upper right corner of the cell). To view the comment, place your cursor on the cell and the comment will appear. Only enter your assumptions in the boxes marked in YELLOW. This model has data in some of the assumption boxes; this data is for demonstration purposes only. You will want to change the assumptions to suit your situation. There are three sheets that contain assumptions in this model: 1. Revenue Assumptions 2. Expense Assumptions 3. Capital Expense (Capex) Assumptions The "Results" tab contains an income Statement, a Payback Analysis and a Breakeven Analysis based on the assumptions made on the previous three sheets.

Detailed Instructions:
Revenue Assumptions Tab
STEP I: Channel Forecast The assumptions in this section will determine the number of IDN registrations that will be sold by the Registrar directly and the number that will be sold by the Registrar's reseller(s). A. Enter the percentage (%) of IDN registrations that will be sold by the Registrar directly. Excel will then calculate the percentage of IDNs sold by a Registrar's reseller(s).

STEP II: Registration Forecast The assumptions in this section will determine the registrations of IDNs. A. Enter your total number of domain names (non-IDN) that you expect at end of year 0 (this year). B. Enter the total number of IDNs that you expect at the end of year 0 (this year). C. Enter the expected Renewal Rate (%) for domain names (non--IDN). D. Enter the expected Renewal Rate (%) for IDNs. E. Enter the expected growth rate (%) for domain names (non-IDNs). F. Enter the level of awareness (%) for IDNs among those who have registered other types of domain names. G. Enter the percentage (%) who intend to purchase IDNs (of those who have registered other types of domain names). H. Enter the expected replacement rate (%) (the % of IDNs registered instead of other types of domain names). I. Enter the average number of IDNs registered per customer. STEP IV: Pricing Forecast The assumptions in this section will determine the Registrar retail price and the Registrar reseller price. Prices are calculated using the mark-up as a percentage increase over the wholesale cost so that price = wholesale cost*(1+mark-up%). The Registrar's retail customers and reseller(s) pay upfront for the term of an IDN. Enter the Registrar Direct mark-up percentage (%). This is the percentage in which the Registrar marks up an IDN for direct sale to its A. customers. Enter the Registrar Reseller mark-up percentage (%). This is the percentage in which the Registrar marks-up an IDN for sale to its B. reseller(s). C. Enter the length (in years) for the Average Registration term.

Expense Assumptions Tab
STEP I: Cost of Good Sold The assumptions in this section reflect the estimated cost of good sold. Enter the estimated cost of goods sold (as a % of total revenue) for fulfillment and delivery. Do not include the wholesale costs of IDNs due A. to VeriSign.

VeriSign Global Registry Services

c35f0672-c2b1-41a8-acf4-87d9234985e4.xls

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Instructions

STEP II: Sales/Marketing The assumptions in this section reflect the estimated costs for the sales and marketing efforts, including direct marketing, sales lead generation, marketing events, etc. A. Enter the estimated amount ($) for sales and marketing for IDN. STEP III: Headcount The assumptions in this section reflect the estimated costs for employees. A. Enter the number of staff in different functions will be required to manage the IDN business. Use full-time equivalents (FTEs). B. Enter an estimated "fully loaded" cost per FTE per month (salary, bonus, taxes, insurance, workspace, individual office equipment and other directly associated costs).

STEP IV: Other General and Administrative Expenses The assumptions in this section reflect the estimated costs for other general and administrative expenses not captured elsewhere in the model. Enter the estimate cost of annual maintenance associated with the registration system and/or other capital assets. Use a percentage (%) of A. the initial value of these assets. B. Enter any additional costs not included elsewhere. Use a percentage (%) of the overall total costs.

Capital Expense (Capex) Assumptions Tab
STEP I: Capital Expenditures The assumptions in this section reflect the estimated capital expenditures and depreciation information. A. Enter the estimated amounts ($) for capital expenditures. B. Enter the number of years over which these assets will depreciated.

Results Tab
STEP I: Income Statement This section displays the Income Statement for the Registrar based on the assumptions entered on the previous sheets. STEP II: Cash Flow and Payback Analysis This section displays the Cash Flow and Payback Analysis for the Registrar based on the assumptions entered on the previous sheets. Payback is indicated by the first month displayed in blue. STEP III: Breakeven Analysis This section calculates the breakeven point in units sold. A. Use "Goal Seek" to calculate an approximate break even point in units sold or enter estimated units sold in cell C57 (Units to Sell to Break

KEY: IDN: Internationalized Domain Name

NOTE: This model is greatly simplified and is only as accurate as the assumptions that are made. Updated: January 24, 2002

VeriSign Global Registry Services

c35f0672-c2b1-41a8-acf4-87d9234985e4.xls

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VeriSign Confidential

Revenue Assumptions

Registrar Revenue Assumptions
I. Channel Forecast
A. Registrations by channel % sold through Registrar directly: % sold through reseller(s): 50% 50%

II. Registration Forecast
Domain Name Growth Total Domain Names Total IDNs Domain Name renewal rate IDN renewal rate Annual growth rate for new Domain Names Awareness of IDN among Registrants of other Domain Names Intent to purchase Now Year 0 100,000 25,000 Year 1 Year 2 Year 3

A. B. C. D. E. F. G.

60% 60% 10% 50% 16%

60% 60% 12% 65% 18%

60% 60% 15% 80% 20%

IDNs Replacing Other Domain Names H. Other Domain Name replacement rate New Growth (IDNs) IDNs per Customer I. IDNs per customer (avg. number purchased) IDN Registrations Year 1 Addressable Domain Name Market Beginning of year Domain Name Total Renewal Domain Names New Domain Names (added) Base level Domain Names Awareness of IDN among ASCII.ASCII Domain Name Registrants Intent to purchase New IDNs registered Replacement of ASCII Base New Growth (IDNs) IDN renewals Total IDN registrations and renewals Total Revenue $

4% 96%

4% 96%

4% 96%

1.0

3.0

2.0

Year 2 70,000 42,000 8,400 50,400 32,760 5,897 17,690 708 16,983 12,360 30,050 540,907

Year 3 50,400 30,240 7,560 37,800 30,240 6,048 12,096 484 11,612 18,030 30,126 542,272

100,000 60,000 10,000 70,000 35,000 5,600 5,600 224 5,376 15,000 20,600 370,800

$

$

III. Pricing Forecast
A. B. C. D. Sales Pricing Registrar Direct Mark-up%: Registrar Reseller Mark-up%: Average Registration Term Length Wholesale cost per IDN per year Wholesale Cost Registrar Direct Retail Price Registrar Reseller Price $ $ $ 300% 100% 1.00 $6.00 6.00 24.00 12.00

VeriSign Global Registry Services

c35f0672-c2b1-41a8-acf4-87d9234985e4.xls

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Expense Assumptions

Registrar Expense Assumptions
Year 1 Year 2 Year 3 Total 484,660 484,660

I. Cost of Goods Sold
IDN Wholesale Cost Total IDN Wholesale Cost $ $ 123,600 123,600 $ $ 180,302 180,302 $ $ 180,757 180,757 $ $

A. Other Cost of Good Sold

(% of total revenue)

5% $

18,540

$

27,045

$

27,114

$

72,699

II: Sales/Marketing
A. Marketing $ 15,000 $ 15,000 $ 15,000 $ 45,000

III. Headcount
(Full time equivalent) A. Sales and Marketing FTEs Technical FTEs Operations FTE Customer Support FTE Management FTE Total FTEs Cumulative FTEs B. Average Total Cost per FTE Headcount Total Cost $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 0.25 0.25 0.15 0.25 0.10 1.00 1.00

1.00

1.00 Total 150,000

IV. Other General & Admin Expenses
Total A. Annual Maintenance as % Capex B. % of overall cost base 10% $ 1% $ 2,071 $ $ 2,723 $ $ 2,729 $ $ 7,524

VeriSign Global Registry Services

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Capital Expenditure Assumptions

Registrar Capital Expenditures (Capex)
A. Item Software Hardware Other Other Other TOTAL $0 Total investment ($) B. Annual Depreciated Depreciation over # years Expense 5 $ 5 $ 5 $ 5 $ 5 $ Total Capex Expense Year 1 $ $ $ $ $ $0 $ $ $ $ $ Year 2 $0 $ $ $ $ $ Year 3 $0

VeriSign Global Registry Services

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Results

Income Statement, Payback Analysis, Market Comparison and Breakeven Analysis
I. Income Statement
Year 1 Revenues IDN Direct Sales IDN Reseller Sales TOTAL REVENUES Cost of Goods Sold Sales and Marketing Headcount Other G&A TOTAL EXPENSES OPERATING PROFIT Depreciation Expense Interest Expense NET INCOME $ $ $ $ $ $ $ $ $ $ $ $ 247,200 123,600 370,800 142,140 15,000 50,000 2,071 209,211 161,589 161,589 $ $ $ $ $ $ $ $ $ $ $ $ Year 2 360,605 180,302 540,907 207,348 15,000 50,000 2,723 275,071 265,836 265,836 $ $ $ $ $ $ $ $ $ $ $ $ Year 3 361,515 180,757 542,272 207,871 15,000 50,000 2,729 275,600 266,673 266,673 $ $ $ $ $ $ $ $ $ $ $ $ Program Total 969,320 484,660 1,453,980 557,359 45,000 150,000 7,524 759,882 694,097 694,097

II. Cash Flow and Payback Analysis
Cash Inflows Cash Outflows NET CASH FLOW PAYBACK ANALYSIS $ $ $ $ 370,800 $ (209,211) $ 161,589 $ 161,589 $ 540,907 $ (275,071) $ 265,836 $ 427,425 $ 542,272 (275,600) 266,673 694,097

III. Breakeven Analysis
Average Selling Price Average COGS Average Investment + Expenses Average Gross Margin Difference Units to Sell to Breakeven $ $ $ $ $ 18 7 202,524 202,524 18,245

Use "Goal Seek" to determine the average number of units that need to be sold to breakeven. 1. Under "Tools" Menu, select "Goal Seek" 2. Enter the following into the "Goal Seek" dialog box: Set cell: $C55 To value: 0 By changing cell: $C$57 3. Click "OK" 4. "Goal Seek" will display the results. 5. Click "OK" if you want to change the spreadsheet with the results of the "Goal Seek" calculation or click "Cancel" to leave the spreadsheet as it was before you used the "Goal Seek" tool.

VeriSign Global Registry Services

c35f0672-c2b1-41a8-acf4-87d9234985e4.xls

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