Verisign: If New gTLD’s Are Successful We Might Be Able To Lift All Price Caps On .Com’s

Coming out of the Verisign ( NASDAQ : VRSN ) conference call this morning announcing that the contract to operate the .com contract had been renewed for six years, without any price increases, is that all price caps on .Com’s could be lifted as early as 2014 if the new gTLD program is highly successful.

Responding to questions, Verisign stated that through this contract renewal they”obtained an option for ourselves before 2018 to ask commerce to find¬†¬† we no longer have “market power” and remove all price controls from .Com domains.

Verisign went though to discuss how new gTLD’s could gain enough market share to classify .Com’s as no longer having “market power” although no one in the call described what exactly “market power” is.

Is Market Power having a greater than 50% share of all domain registrations or just significantly more than any other domain extension?

What is clear is Verisign will have a right to ask Commerce & Justice to find that Verisign no longer has market power with .Com and all Verisign then to set whatever price they want on renewals and registrations of domains , including variable pricing like the old .Tv model.

However we here at think we won’t see any shift in .Com dominance certainly over the next 6 years covered by the contract and think the issue is something Verisign is giving to its shareholder to reduce the damage caused by the lack of 28% of rate increases shareholder thought Verisign would receive over the next 6 years.


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