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- Aug 28, 2009
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Hey JP. Off the top of my head I think the reserve is more like $7m. Sometimes the folks who are really out of the loop on accounting practices like to lump an additional $5m in there. That's roughly the amount we have in a deferred revenue account for multi-year renewals that haven't happened yet. So while we do have that money in hand, we haven't really earned it yet and therefore can't spend it. Though it does earn interest, which is nice.
Look, any big sum of money is going to sound like a lot. But the reason a reserve is pegged to a certain period of operating expenses is because that's what really matters. Obviously a very small business needs a lot less in reserve than a large business. In CIRA's case, yeah, we do run a sizable operation. I believe our annual operating budget (not counting payments into the reserve) is something like $8.5-9m. So we're almost at 12 months now.
Note, btw, that all figures are approximate because I don't have the budget right in front of me. It will be presented at the AGM in just a few weeks in any case.
Seriously, I'm very sympathetic to the view that our marketing efforts haven't been very effective. I've certainly got that point here already, and I'm interested in more ideas of what we could be doing differently. But tying that discontent (which is valid) to objections that we're carrying an operating reserve only, in my opinion, distracts from the important point and weakens the argument. In fact, if I think about other directors on the board, it's really the voices who are loudest on our marketing failures who immediately defend the operating reserve.
The folks who don't like the operating reserve most are the ones who want to spend it on other stuff. All that public do-gooder stuff that some folks think CIRA does but that we actually don't - like fighting online scams, child pornography and predators, stopping spam, etc. Although I do see a small and contained role for CIRA on some such issues, I don't believe we should be deliberately taxing our registrants to throw millions at public works projects. So again, ideas about what CIRA should and shouldn't be doing are very appropriate, but unfortunately when you've got cash there are 101 proposals for how we can or should be spending it.
What that cash is really doing, by sitting in the bank, is protecting the stability of the DNS. We have redundancy on redundancy when it comes to our servers and our protocols. A cash reserve represents a financial redundancy. And I do agree with it. Resellers would prefer we market more to drive up the end user market. PPC folks would prefer we cut the bulk rate to the absolute bone so that they can monatize traffic on a larger strata of domains. But really, our job is to protect the stability of the DNS. If that was ever threatened or disrupted the loss would be massive.
And remember, ultimately that stability is very important to the resale market also. If there was even a hint that the dot-ca namespace was unstable or less reliable than other registries and extensions, the value of the domains would plummet. Our reputation doesn't just rest on marketing but also on responsible management and accounting practices.
Anyway, keep it coming. I'm not exactly feeling the love here lately, but I'm still interested in what you have to say.
Look, any big sum of money is going to sound like a lot. But the reason a reserve is pegged to a certain period of operating expenses is because that's what really matters. Obviously a very small business needs a lot less in reserve than a large business. In CIRA's case, yeah, we do run a sizable operation. I believe our annual operating budget (not counting payments into the reserve) is something like $8.5-9m. So we're almost at 12 months now.
Note, btw, that all figures are approximate because I don't have the budget right in front of me. It will be presented at the AGM in just a few weeks in any case.
Seriously, I'm very sympathetic to the view that our marketing efforts haven't been very effective. I've certainly got that point here already, and I'm interested in more ideas of what we could be doing differently. But tying that discontent (which is valid) to objections that we're carrying an operating reserve only, in my opinion, distracts from the important point and weakens the argument. In fact, if I think about other directors on the board, it's really the voices who are loudest on our marketing failures who immediately defend the operating reserve.
The folks who don't like the operating reserve most are the ones who want to spend it on other stuff. All that public do-gooder stuff that some folks think CIRA does but that we actually don't - like fighting online scams, child pornography and predators, stopping spam, etc. Although I do see a small and contained role for CIRA on some such issues, I don't believe we should be deliberately taxing our registrants to throw millions at public works projects. So again, ideas about what CIRA should and shouldn't be doing are very appropriate, but unfortunately when you've got cash there are 101 proposals for how we can or should be spending it.
What that cash is really doing, by sitting in the bank, is protecting the stability of the DNS. We have redundancy on redundancy when it comes to our servers and our protocols. A cash reserve represents a financial redundancy. And I do agree with it. Resellers would prefer we market more to drive up the end user market. PPC folks would prefer we cut the bulk rate to the absolute bone so that they can monatize traffic on a larger strata of domains. But really, our job is to protect the stability of the DNS. If that was ever threatened or disrupted the loss would be massive.
And remember, ultimately that stability is very important to the resale market also. If there was even a hint that the dot-ca namespace was unstable or less reliable than other registries and extensions, the value of the domains would plummet. Our reputation doesn't just rest on marketing but also on responsible management and accounting practices.
Anyway, keep it coming. I'm not exactly feeling the love here lately, but I'm still interested in what you have to say.
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