Bellevue-based Donuts Inc. made headlines recently when it offered $70 million to purchase Kirkland-based Rightside. Rightside turned down the offer, and Donuts has brushed it off and pushed forward with other outside investments.
“For us, this in an obvious thing to do; to promote and encourage the space that we’re in and around us because that’s the future of what we’re doing,” said Tim Favia, vice president of corporate development. “(Donuts) does a ton of work in the core business, but we believe that it’s important to support the peripheral space as well and encourage the ecosystem around domain names and the uses for them.”
It’s in this spirit that Donuts has developed Donuts Labs, an investment arm of the company to support and encourage creativity and innovation both inside the company and outside. It’s through Donuts Labs that the two recent outside investments were made, one in Los Angeles-based Netki and Tiburon, California-based Geofrenzy. Both companies are working with digital currencies and developing technology to simplify transactions between users and banks.
“The central piece in the Lab is to invest in companies that we believe are promoting new uses for domain names. That’s good for our ecosystem, good for our business, and we also believe will fuel the next generation of growth that isn’t our typical model,” Favia said.
CEO Paul Stahura said the two outside investments — and some in-house projects he’s not ready to discuss yet — are just two examples of how the expanded top level domains can be used in myriad ways. Similar to how the use of phone numbers has expanded since the invention of the telephone. Instead of simply talking to one another, users can send text, photos, and data to a 10-digit number.
“We think that there’s going to be a new blossoming of creativity and using the domain name system, which is one of the very few worldwide systems. We think there’s innovation coming now to domain space,” Stahura said.