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Verisign locks in 'dot.com'
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May 21, 2001: 2:15 p.m. ET
Internet domain-name provider extends its exclusive rights until 2007
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NEW YORK (CNNfn) - Shares of VeriSign Inc. were trading more than 10 percent higher on Nasdaq early Monday afternoon after it locked in its right to exclusively manage the registry of "dot.com" Internet domain names until 2007.
VeriSign, through its Network Solutions subsidiary, is the largest supplier of Internet domain-name registration services, for which Web site operators pay an annual fee.
Each time a user requests a Web page using the familiar dot.com, dot.net and dot.org suffixes, that request is channeled through systems maintained by Network Solutions and other domain-name registrars. Those systems then route the user to a numeric address which is used to identify the Web server on the Internet.
On Friday, the U.S. Commerce Department approved a deal allowing VeriSign (VRSN: up $6.48 to $67.22, Research, Estimates) to retain control of the lucrative dot.com Web domain. In return, VeriSign will give up control of the dot.org domain, and allow rights to the dot.net domain to be open to competitive bidding.
The dot.com domain accounts for roughly three-quarters of all Internet addresses.
The deal seeks to maintain the technical stability the Internet has enjoyed under VeriSign's dominance while gradually moving to greater competition in the business of registering Internet addresses.
Rights to the .org domain and $5 million will be given to a nonprofit organization in 2002.
Competitive bidding for the .net domain will be moved up to June 2005, six months earlier than originally planned, unless the Commerce Department determines that VeriSign continues to maintain its dominant position in the marketplace. In that case, rights to .net would be auctioned off in November 2003 or January 2005.
The National Science Foundation gave exclusive control over dot.com, dot.org and dot.net to Network Solutions in 1993. VeriSign bought Network Solutions in June 2000.
VeriSign forged the latest deal with the Internet Corporation for Assigned Names and Numbers, the standards-setting body commonly known as ICANN, in early April.
Executives at VeriSign said the company was pleased with the deal, which they said provides the company with more clarity to move forward in its business. They also characterized it as beneficial to the broader Internet industry.
"With these new agreements ... and the impending rollout of new generic top level domains, the Internet has taken several steps forward to truly becoming a more open and stable global medium for businesses and consumers alike," Stratton Sclavos, VeriSign's president and chief executive, said in a statement Monday. 
-- Reuters contributed to this report.
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