Sterling-based Neustar to acquire .CO Internet

Published March 21, 2014 by Robert Powell, III

Sterling-based Neustar Inc. plans to acquire .CO Internet S.A.S., the exclusive operator of the worldwide registry for Internet addresses with the “.co” top-level domain.

Started in 2010, .co has grown to more than 1.6 million web addresses registered by individuals and businesses in over 200 countries and territories.

Neustar has an existing partnership with .CO Internet to provide registry services and infrastructure support for .co extensions, the top-level domain assigned to Colombia.

“The acquisition of .CO Internet is a natural fit for us given our successful partnership over the past four years and our domain name expertise,” Lisa Hook, the president and CEO of Neustar, said in a statement.  “By combining .CO Internet’s innovative domain marketing capabilities with Neustar’s distribution network and technical resources, we will be able to broaden our registry services and the .co brand worldwide, while delivering attractive returns on this investment for our shareholders.”

The acquisition of .CO Internet expands Neustar's registry services business, which maintains the .biz and .us top-level domains and has been selected to provide services for up to 350 new domain extensions as a result of Internet Corporation for Assigned Names and Numbers’ (ICANN) ongoing global domain name expansion.

.CO Internet had an annual revenue run-rate of $21 million in 2013.  However, business combination accounting principles require the company to adjust the acquired deferred revenue to fair value.  This adjustment to fair value often results in a write-down that will reduce future revenue recognized as the services are performed, typically over a one year period. 

During 2013, Neustar recorded $4 million in revenue for its role as the back-end provider for .CO Internet, which will be eliminated upon consolidation.

The acquisition is subject to standard closing conditions and is expected to close within one month. 

Following the acquisition, .CO Internet, as a wholly-owned subsidiary of Neustar, will continue to manage the .co domain extensions from its headquarters in Bogota, Colombia.