|
VeriSign, U.S. reach accord
|
 |
March 1, 2001: 1:03 p.m. ET
Web address registrar would turn over .org addresses, keep .com, .net
|
NEW YORK (CNNfn) - VeriSign Inc., which dominates the world's master list of Web addresses, reached a preliminary agreement with federal regulators that would allow VeriSign to keep its valuable domain name registry in tact at least through 2007, the company said Thursday.
The agreement stems from the U.S. Commerce Department's fears that VeriSign is creating a monopoly on the domain name registration business. While other companies sell Web addresses, VeriSign is the only one that controls the vast list of names that have been registered, sparking the Commerce Department's concerns.
Terms of the deal, which is subject to company and regulatory approval, would allow VeriSign to keep its registry of about 30 million Web addresses longer than it otherwise would have been allowed. It can keep the .com registry through 2007, the .net through 2006 and the .org registry through 2002 without having to open them up to bids from competitors.
 In exchange, VeriSign agrees to turn over the rights to .org addresses, used mainly by non-profit groups, to the Internet Corporation for Assigned Names and Numbers (ICANN), an Internet watchdog agency created by the Commerce Department, by 2002.
Beyond 2007, VeriSign also would have the option to gain automatic approval from Commerce under certain conditions, to keep the rights to valuable .com and .net instead of having to open them up for bids.
The company also would be allowed to keep its registrar business, the sales unit, which signs up new domain names for a fee.
The deal is a victory for VeriSign, which was hurt by a decline in domain name registrations last year as many dot.com companies folded in the softening economy. VeriSign is betting that the dot.com industry will stabilize and see a profitable rebound by the second half of 2001.
"We're the ultimate Internet utility. We want a lot of other people to plug into what we have, a lot of businesses around the world," Bob Korzeniewski, VeriSign's executive vice president for corporate development, told CNNfn.com Thursday. "As long as we provide those important core Internet utility tools, we're going to do pretty well."
Analysts tend to agree.
UBS Warburg analyst Jordan Klein said VeriSign's ability to hang on to its vast registry of about 30 million names which clients pay annual fees to maintain, is key for the company.
The registry is just a big global database. It's the real cash cow," Klein said. "They get this money no matter who signs up with the registrar. It has all the infrastructure behind it."
Thursday's agreement replaces an earlier one struck with the Commerce Department and ICANN in 1999 that would have required VeriSign to divest either its registry of names or its registrar, sign-up business, in order to keep control over the registry for another four years. After that, it would have had to bid against others for the rights to maintain control.
Shares of VeriSign (VRSN: Research, Estimates) jumped $2.19 to $49.88 in Thursday afternoon trading. The stock has been trading between $258.50 and $45.87 in the past year. 
|
|
|
|
|
 |
|
