Company makes admission for first time in latest SEC filing.
Verisign made a subtle, but important, change in its risk language in its third quarter 10-Q report filed with the SEC. I picked up on this change using the Intelligize SEC document comparison tool.
Here’s the relevant content from the Q2 report:
We do not yet know the impact, if any, that these new gTLDs may have on our business, including if or how the introduction of these new gTLDs will affect registrations for .com and .net and therefore have a material adverse effect on our business, results of operations, financial condition and cash flow.
And the same section from the Q3 report:
We do not yet know the magnitude of impact that these new gTLDs may have on our business over the long term. We believe the introduction of these new gTLDs is affecting the growth in registrations for .com and, to a larger extent, .net and therefore may have a material adverse effect on our business, results of operations, financial condition and cash flows.
Verisign is now saying that new TLDs are affecting .com’s growth, whereas before it was saying they might affect growth.
A couple other notable things I picked up from the Q3 10-Q:
1. “The Company’s federal income tax returns for 2010, 2011 and 2012 continue to be under examination by the Internal Revenue Service (“the IRS”). During the three months ended September 30, 2015, the Company received notification that its federal income tax returns for 2013 and 2014 are also under examination by the IRS.”
(I don’t know if this is common or a big deal.)
2. The company’s trademark licensing deal with Symantec, which gave control of Verisign.com to Symantec, has terminated. Verisign has switched its website back from VerisignInc.com to Verisign.com.
Bret Fausett says
I don’t think it’s a zero sum game. My crystal ball says that the overall market for names will continue to grow – some people will choose com, net and org. Some people will choose cars, supply and xyz. .Com will continue to grow. The others will too.
Joseph Peterson says
The change of language is significant; yet it’s hardly surprising, is it? Inevitably, new TLDs will affect preexisting TLDs in some way. It stands to reason that, as time goes by and data accumulates, the picture comes into focus. Before, it was too early to measure much; and now short-term effects have been assessed, which leaves long-term trends to measure.
I find it interesting how publicly accountable a company like Verisign must be. Look at how we analyze these subtle shifts in its language. What do they know? When do they know it?
Meanwhile, look at Daniel Negari’s prophecy of 1 million .XYZ domains followed by the NetSol registrar-stuffing scandal. Afterward, he was still pointing to those dubious numbers as evidence of market demand. Even today, somebody is telling me that I’m wrong to question .XYZ unless I can personally supply statistics about hundreds of thousands of NetSol customers – whether they read emails, whether (in their minds) not opting out represented consent, etc.
It’s a weird double standard applied by some members of the public. Any talk of .COM / .NET growth by Verisign will be examined under a microscope. Meanwhile Daniel Negari could talk about the fantastic growth his .XYZ was enjoying, even if it was faked; and some people are fine with that.
Drew says
Nice catch. New TLDs are disrupting the market and after seeing 30% growth over Q3 2015 there’s no denying the demand is there.