In a recent development, Verisign Inc . (NASDAQ:VRSN), a global provider of domain name registry services and internet infrastructure, announced that it is entering discussions with the National Telecommunications and Information Administration (NTIA) regarding the pricing of .com domains.
The dialogue follows an exchange of letters between the two entities on August 2, 2024, concerning the Cooperative Agreement that has been a cornerstone of internet governance since 1992.
The NTIA, which oversees the agreement, has expressed its intention to renew the pact, acknowledging the critical role it plays in maintaining the security, stability, and resilience of the internet's unique identifier systems.
Verisign, which has managed the .com registry for over two decades, has been recognized by the NTIA for its effective stewardship, including its management of the .com registry and other vital functions of the internet's technical architecture.
Amidst public inquiries and NTIA's concerns, the discussions will address the pricing structure within the .com market and the overall health of the ecosystem, including both retail and secondary markets.
Verisign has pointed out that while wholesale price caps on .com domains have been in place, the benefits have not always trickled down to end-users, such as consumers and businesses. Instead, these caps have contributed to the growth of an unregulated multi-billion dollar secondary market.
The upcoming talks, as clarified by Verisign, do not obligate any immediate changes to the .com wholesale pricing. However, the company has expressed its commitment to exploring potential solutions that could benefit end-users across the Domain Name System (DNS) ecosystem.
Verisign's engagement with the NTIA is poised to address significant concerns about domain pricing, but it is premature to speculate on the outcomes of these discussions. The timeline for the talks remains undefined, and any potential changes to the Cooperative Agreement would be subject to processes established by the Internet Corporation for Assigned Names and Numbers (ICANN).
In other recent news, VeriSign, Inc. reported a mix of results in its second quarter 2024 earnings call. The company saw a 4.1% increase in revenue, growth in operating income, and earnings per share, however, it faced a 1.8 million decrease in its domain name base. This decline was attributed to shifts in U.S. registrar strategies and a weaker market in China. Despite these challenges, VeriSign continues its role as a critical internet infrastructure provider and is preparing for the renewal of the .com registry.
The company also highlighted its capital allocation strategy, which includes a significant share repurchase program and the pursuit of the new Top-Level Domain (TLD) .web. VeriSign bought back 2.2 million shares for $388 million and has authorized an additional $1.11 billion for future repurchases. Full-year 2024 revenue is projected to be between $1.553 billion and $1.563 billion, with operating income expected to range from $1.048 billion to $1.058 billion.
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