Verisign points out that NTIA announcement has nothing to do with .com, but at least one analyst has downgraded the stock due to uncertainty.
Verisign issued a press release this morning reminding investors that Friday’s big news about the U.S. government transitioning internet responsibilities does not affect its lucrative contract to run the .com domain name registry.
Verisign shares were down about 6% in the first few minutes of trading today.
Last Friday National Telecommunications and Information Administration (NTIA) announced its intent to relinquish control of the functions under the IANA contract. This includes managing the root zone, a role in which Verisign plays a part.
But Verisign doesn’t get paid for playing its role in root zone management. While it was able to use its role with the root zone to apply a bit of pressure in the new TLD process, that didn’t amount to much.
Verisign’s contracts to run .com and .net are not directly affected by the NTIA’s announcement. However, at least one analyst warns that changes could affect Verisign’s ability to renew its contract in the future.
The U.S. government plays a role in the .com contract, and it’s possible that the U.S. government could bow out of it connection to awarding the .com contract in the future. But remember, it was the U.S. government that played the heavy last time the contract was renewed. ICANN agreed to annual price increases and the government later nixed them.
Given Verisign’s lucrative role in running .com, I suppose any news like this can be considered bad news. The status quo is good for Verisign.