18.1 Mission and Purpose of .FLOWERS
1-800-FLOWERS.COM, Inc. (“1-800-FLOWERS.COM”), is the world’s leading florist and gift shop and offers a range of products including fresh-cut flowers, floral arrangements, plants, gift baskets, and other products and services. 1-800-FLOWERS.COM’s content, products, and services can be found online via 1800Flowers.com and other online “Gift Shops.” In addition to flowers, the 1-800-FLOWERS.COM offerings include gifts such as specialty treats from The Popcorn Factory®; baked gifts from Cheryl’s®; confections from Fannie May®; gift baskets from 1-800-Baskets.com®; and wine from Winetasting.com®. The Company’s Celebrations® brand is a leading online destination for party ideas, and FineStationery.com® is the premier site for customizable invitations, announcements, and greeting cards.
In 2011, its 35th year, 1-800-FLOWERS.COM had revenues totaling $689.8 million. The company’s common stock is traded on the NASDAQ under the symbol FLWS, and in 2011, it had a marketing and sales operating expense of nearly $175 million. 1-800-FLOWERS.COM’s websites play an extremely important role in its business; the company had e-commerce revenues exceeding $485 million in 2011.
In addition to providing flowers and other gift products and services for customers, 1-800-FLOWERS.COM has helped florists expand their businesses globally via BloomNet®. BloomNet is a floral wire service provider that offers quality products and diverse services to a select network of professional retail florists who utilize BloomNet’s resources. As the leader in the flower retail industry, 1-800-FLOWERS.COM has been dedicated to helping professional florists and flower retail services thrive.
Recognizing the potential dynamic evolution of the .FLOWERS gTLD as a trusted namespace, 1-800-FLOWERS.COM has decided to create a wholly owned subsidiary, Piper Ventures, LLC (“Piper Ventures”), as the entity to file this application and bring the .FLOWERS gTLD to market. Although Piper Ventures is committed to moving forward with the .FLOWERS gTLD application, it has not, at the time of filing this application, been able to fully vet and analyze all potential use case options.
The intended future mission and purpose of the .FLOWERS gTLD is to serve as a trusted, hierarchical, and intuitive online platform provided by 1-800-FLOWERS.COM and its qualified subsidiaries and affiliates for Internet users, consumers, retailers, and wholesalers in the flower industry to access 1-800-FLOWERS.COM content, services and information, as well as interact with each other within a verified and authoritative namespace.
Piper Ventures will be analyzing and evaluating other gTLD applications, as well as general market adoption, to determine short- and long-term potential best-in-class use case options to most effectively serve and enhance 1-800-FLOWERS.COM’s online strategy as a leading online florist and gift shop.
Piper Ventures intends to initially limit registration and use of domain names within the .FLOWERS gTLD to 1-800-FLOWERS.COM and its qualified subsidiaries and affiliates. This initial limited use will allow Piper Ventures and 1-800-FLOWERS.COM to establish their operations and achieve full sustainability. This limited distribution, coupled with the other requirements set forth in Specification 9 of the template Registry Agreement, is intended to exempt Piper Ventures from its annual Code of Conduct Compliance requirements.
After Stage 2 (see below), Piper Ventures will evaluate whether opportunities exist to carry out the business strategy for the gTLD through expansion that continues the sustainable operations of the registry through fee-based registrations to parties other than 1-800-FLOWERS.COM and its qualified subsidiaries and affiliates.
Piper Ventures currently plans a three-stage rollout for the .FLOWERS gTLD:
Stage 1
The initial stage of implementation of the gTLD will involve 1-800-FLOWERS.COM registering a limited number of .FLOWERS second-level domain names.
This initial use will provide 1-800-FLOWERS.COM’s IT and security personnel the time to run a number of tests to ensure seamless and secure access using the .FLOWERS gTLD domain names, interoperability with various software and Web-based applications, and unbroken and secure use of all names. This initial allocation will also allow the appropriate internal and external staff responsible for the delegation and setup phases of the .FLOWERS gTLD to ensure a proper transition from delegation to full operation. The registration and use of these domain names are intended to be within the scope of Section 1B of Specification 9, regarding the maintenance, operation, and Purpose of the gTLD.
Stage 2
Once all testing has been successfully completed, Piper Ventures will begin allocating domain names in .FLOWERS for more widespread internal corporate use for 1-800-FLOWERS.COM and its qualified subsidiaries and affiliates. In addition, Piper Ventures may foster a verified online directory that provides Internet users, consumers, and wholesalers with the framework to find local florists.
It is in Stage 2 that Piper Ventures will evaluate expanding the operations of the gTLD to permit registration by other registrants such as licensees and⁄or strategic partners. Should an assessment of its expansion strategy lead to a decision to extend registration rights to other parties, this expansion is currently planned to take place during Stage 3. However, any expansion would be conditioned upon a review of Specification 9 (Registry Code of Conduct) set forth in the template Registry Agreement to ensure compliance with Piper Ventures’ business model.
Stage 3
Based on its experience with any expansion implemented in Stage 2, Piper Ventures and 1-800-FLOWERS.COM will assess whether their business plan and expansion strategy should be augmented by extending registration rights to a broader class of licensees, customers of 1-800-FLOWERS.COM, and other third parties. It is anticipated by Piper Ventures that changes to the domain name industry, particularly the impact of new .GENERIC gTLDs, will take at least five years to be realized and assessed. Any decision to expand the gTLDs beyond corporate, licensee, and strategic partner use will take into account this experience as well as the technical analysis of potential expansion.
Notwithstanding this potential future expanded use of the .FLOWERS namespace beginning in the sixth year of operation, Piper Ventures currently anticipates implementing a throttle mechanism to ensure that any proposed expansion is controlled and responsible.
Specifically, under the throttle mechanism Piper Ventures would cease registration of domain names to this potential expanded universe of registrants if and when Piper Ventures reaches 90 percent of the annual 50,000-domain name transaction currently provided for in the template Registry Agreement. Piper Ventures believes that it is prudent to incorporate this “time-out” into the business plan in order to reevaluate potential future growth and the necessary resources to ensure that this growth does not negatively impact the secure and stable operation of the .FLOWERS namespace when approaching the 50,000-domain name transaction threshold. This proposed “time-out” mechanism is described in greater detail in the responses to the financial questions (Question 45-50).
The potential use of the .FLOWERS gTLD may also be driven by 1-800-FLOWERS.COM’s future business strategies as identified in its annual report and investor filings, see: http:⁄⁄investor.1800flowers.com⁄.
Utilizing current projections based upon 1-800-FLOWERS.COM’s existing businesses, future business plans, current domain name portfolio, and other strategic factors, 1-800-FLOWERS.COM estimates second-level domain name registrations to be in line with the projection set forth in the financial template provided in response to Question 46.
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