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New domain names approved
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November 16, 2000: 6:41 p.m. ET
Web to get new domain names to compete with .com, .org, .gov
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NEW YORK (CNNfn) - The Internet's governing body on Web site names approved seven new top domain names for addresses on the Web, the first significant expansion of domain name families in ten years.
The board of directors of the Internet Corporation for Assigned Names and Numbers, a non-profit group, approved: .biz, .info, .name, .pro, .museum, .aero and .coop. The new domain name families will compete with the seven existing domain name types, which include .net, .com, .org, .gov, .mil, and .edu.
The new suffixes, which could appear in use by mid-2001, are designed as alternatives to .com, a crowded suffix with some 20 million registrations. It is similar to adding area codes to the national phone system to accommodate growth.
Impact on VeriSign
ICANN's approval of the seven new domain names could affect the Web security firm VeriSign (VRSN: Research, Estimates). VeriSign agreed last March to acquire Network Solutions Inc. for $21 billion in stock. Until last fall, Network Solutions had been the exclusive provider of domain-name registration services under a contract it had with the U.S. Commerce Department.
While the domain name business was opened for competition last November, Network Solutions still controls the lion's share of that business and derives most of its revenue from it.
Analysts say that VeriSign stands to gain from the expansion of domain names because it is both a registry, holding and updating a master list of domain names, and a registrar, selling the domain names to businesses and the general public. Revenue from the combined businesses, which VeriSign does not break apart, made up an estimated half of VeriSign's $173.1 million in revenue in its third quarter ended Sept. 30.
As a registry, VeriSign currently enjoys a near-monopoly position, charging other registrars $6 per domain name in its database, which include all domain names except those ending in a country suffix, such as those ending in .uk or .jp. These are operated by organizations within each country.
Analysts say that VeriSign will be able to leverage its massive customer base, estimated to be around 15 million, to resell new domain names, which will proliferate following ICANN's vote Thursday.
-- Reuters contributed to this story 
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