In what domain holder have to consider a victory, Verisign, Inc. ( NASDAQ : VRSN ) was granted an six year renewal of the .Com registry but losses the ability to automatically raise prices.
Verisign’s current pricing of $7.85 per domain name registration will continue for the six-year term of the Agreement.
Under the current contract Verisign has to operate the registry which expires today they had the right to raise prices 7% in any 4 of the 6 years of its choice and in fact did elect to raise prices in 4 of 6 years.
The term of this contract is term commencing on Dec. 1, 2012 through Nov. 30, 2018
“Price increases are limited to circumstances based on the imposition of new Consensus Policy or extraordinary expenses related to security or stability threats, and now require Commerce Department prior approval.
Finally, pricing restrictions may be removed entirely if Verisign demonstrates to the Commerce Department’s satisfaction that market conditions no longer warrant such restrictions.”
You can listen to the live conference call and webcast at 8:30 Am EST.
All of the information on that is listed on our blog post of last night
Shares of Verisign are down almost 14% in pre-market trading current at $33.51 down $5.63
Verisign closed on Monday at $40 a share
Th only negative for domain holders in the announcement is the statement that ” pricing restrictions may be removed entirely if Verisign demonstrates to the Commerce Department’s satisfaction that market conditions no longer warrant such restrictions.”
Which could lead to varbile pricing domain by domain like to old .TV model with some domains having annual renewal fees into the $x,xxx or even $xxx,xxx per year.
It’s better than having price increases, but still means consumers will be losing $500 million/yr compared to a competitive tender situation. Consumers deserve much better than this weak agreement.
BTW, the sentence “pricing restrictions may be removed entirely if Verisign demonstrates to the Commerce Department’s satisfaction that market conditions no longer warrant such restrictions” is very problematic, as it could open up the entire tiered/differential/variable pricing debate, whereby VeriSign could charge a different renewal price for each and every domain name (e.g. $1 billion/yr to renew Google.com, $5 million/yr for Hotels.com, and so on). Clearly the NTIA/DOC/DOJ needs to ensure that never happens.
A good hedge against this potential “restriction” lift could be to renew your better * domains for the maximum allowed : 10 years then renew every year for a single year thereafter…
You are also adding intrinsic value to the asset/domain EMO, in addition good “forward expense’ to consider before the end of this fiscal year in case you are looking for write-offs.
*.com domains, I am not sure about other extensions.