I received two LinkedIn requests from stock analysts yesterday asking for my thoughts on what Verisign (NYSE:VRSN) will be able to charge for .com domain names going forward. I suspect this is in response to Ted Cruz’s most recent letter.
Analysts typically want a lot of my time for free so they can make boatloads of money for themselves. So instead of spending time with each individually, here’s my take on .com pricing.
Recent history of .com pricing and why it matters to Verisign:
Verisign’s contract to run .com was renewed in 2012, but there was a wrinkle.
Its previous six-year contract enabled it to raise prices 7% in four of the six years of the contract. Verisign took advantage of each of these increases, ending the contract with a $7.85 wholesale price.
ICANN and Verisign agreed to a similar deal for the six-year contract commencing 2012, but the U.S. government stepped in and said the price increases were unwarranted. It froze the price at $7.85 per year until 2018.
The contract still allows Verisign to increase prices for .com in one of two ways: Click here to continue reading…