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Verisign’s Annual Report and .com price increases

by — Policy & Law 3 Comments

Verisign’s 10-K gives clues to how it is approaching a .com price increase.

.Com registry Verisign (NASDAQ: VRSN) published its 2018 annual report on Friday. I reviewed the document to look for information about Verisign’s hopes of raising the price of .com domain names.

Last year the U.S. Department of Commerce and Verisign agreed to Amendment 35 of their Cooperative Agreement. This amendment lifted a ban on price increases in .com that had been in place since the 2012 contract renewal with ICANN. It allows ICANN and Verisign to enter into a contract that would allow Verisign to increase .com prices 7% in each of the last four of each six years of the contract.

Verisign still needs ICANN’s approval to make this happen. So far it seems that Verisign is making two arguments to push this along.

First, that ICANN has historically deferred to the U.S. Department of Commerce on .com pricing.

Second, that its 2016 contract renewal anticipates this possible pricing change and that ICANN should approve it. Here’s language from Verisign’s 10-K:

Following the extension of the .com Registry Agreement on October 20, 2016, the .com Registry Agreement provides that we will continue to be the sole registry operator for domain names in the .com gTLD through November 30, 2024. As part of the extension of the .com Registry Agreement, the Company and ICANN agreed to cooperate and negotiate in good faith to amend the terms of the .com Registry Agreement: (i) by October 20, 2018, to preserve and enhance the security and stability of the internet or the .com TLD, and (ii) as may be necessary for consistency with changes to, or the termination or expiration of, the Cooperative Agreement. ICANN and Verisign are engaged in discussions related to these obligations, including modifying the .com Registry Agreement based on changes to the Cooperative Agreement arising from Amendment 35.

The use of the term obligations here suggests that Verisign will argue to ICANN that it is obliged to allow it to raise rates as allowed under Amendment 35. But take a look at the language in Amendment 35: Click here to continue reading…

Third day of NamesCon kicks off in Las Vegas

by — Uncategorized 0 Comments

Come to my two sessions today at NamesCon.

The third day of the NamesCon conference in Las Vegas is about to begin. I’m on two panels today that I invite you to attend.

At 11 am I will chat with Blake Janover of Home.loans and Mike Kugler of Vacation.rentals about their $500k new top level domain purchases. We’ll talk about what they’ve seen with SEO, how their customers have responded to the domains and more.

At 1 pm I will take part it what will surely be a lively discussion about how much Verisign gets to charge for .com domain names. Derek Newman will moderate the session that also includes Elliot Noss of Tucows (NASDAQ: TCX) and Zak Muscovitch of Internet Commerce Association.

I look forward to seeing everyone today.

My two sessions at NamesCon

by — Services 2 Comments

Join me for discussions about big new TLD sales and .com prices.

NamesCon logo

I will be both a moderator and panelist at next week’s NamesCon conference. I invite you to come to my sessions on Tuesday.

Making sense of $500k for a nTLD, 11 am Tuesday 1/29 on the RegistryOffice breakout stage

I interview two people who spent $500k on new top level domains: Blake Janover, who bought Home.Loans for $500,000 and Mike Kugler, who paid $500,300 for Vacation.Rentals. We will discuss what gave them the conviction to spend record-breaking amounts on new top level domain names and how the domains have (and haven’t) worked out for them. I interviewed Blake on my podcast a year ago and Mike about 9 months ago. Both have launched their sites and we’ll get an inside look at how their domains and websites are performing.

.Com Price Increase, 1 pm Tuesday 1/29 on the .Global Keynote stage

Derek Newman will moderate a session with me, Tucows CEO Elliot Noss, and Internet Commerce Association general counsel Zak Muscovitch discussing .com prices. In light of the U.S. government giving the green light late last year to .com price hikes, we will discuss the merits of .com price changes and who wins/loses.

I hope to see you at one or both of these sessions.

Year in Review: Verisign gets its price hikes

by — Policy & Law 3 Comments

The U.S. Government gave the green light to increase prices on .com domain names.

Picture of price tag

It’s an obscure contract issued by the U.S. government. For the domain industry, it means a lot.

On November 1, The U.S. National Telecommunications and Information Administration (NTIA) amended and extended its Cooperative Agreement with Verisign (NASDAQ: VRSN) for running .com.

Think of the Cooperative Agreement as a check on the contract between ICANN and Verisign for .com.

The NTIA’s role in this agreement was rather trivial for a while. Then in 2012, the NTIA effectively overruled a contract extension that ICANN and Verisign agreed to that would have allowed Verisign to increase .com prices 7% per year for four out of six years of the contract. That was the status quo from the previous contract, but NTIA questioned why price increases were justified.

Prices have been fixed at $7.85 ever since.

But the amended agreement restores price increases of 7% in four out of six years, although not until the last four years of each six. ICANN doesn’t have to agree to the price increases, but if it does then Verisign will be able to charge $10.29 per domain six years from now.

That might not seem like much, but it represents hundreds of millions of dollars directly to Verisign’s bottom line (and out of consumers’ pockets). Verisign’s competitors would gladly offer significantly lower prices if they could bid on the contract.

You would think Verisign would jump for joy after the contract amendment. So it was surprising when Verisign published an inflammatory article the very next day criticizing domain investors for their role in the market. Yes, the same group of people that Verisign has been marketing to for the past decade so it could sell more .com domain name registrations.

Verisign adds nearly 2 million .com/.net domains in Q3

by — Services 0 Comments

.Com continues to chug along.

Verisign (NASDAQ: VRSN) reported third-quarter 2018 results yesterday.

On the domain name side, the company processed 9.5 million new .com/.net registrations during Q3. After accounting for deletions, 1.99 million .com/.net domains were added to the domain base. At 151.7 million, it’s up 4% year-over-year.

The results exceeded Verisign’s guidance of 1.3 million to 1.8 million for the quarter.

The company expects to add 0.9 to 1.4 million .com/.net domains to the base during Q4 of this year.

After this quarter, the company will change how it provides guidance on net adds. It will switch from quarterly guidance to annual guidance.

As I’ve noted before, it’s fairly easy to pull levers to hit this guidance mark. Switching to annual guidance will allow the company more time to decide which levers to pull for better long-term performance.

With regards to the Cooperative Agreement between Verisign and the NTIA, Verisign CEO James Bidzos said the company is confident that an amended agreement can be executed before it expires at the end of next month.