Verisign, the domain name registry that controls the .com domain (as well as .net and others), just notified its registrars (the companies that actually sell domain names to end users) that the wholesale price of .com domains will be raised 7%, from $6/year to $6.42/year. Expect registrars, particularly discount registrars with little margin to play with, to raise their prices by roughly the same amount.
This doesn’t sound like much of an increase, but Verisign now has the right, pursuant to a renegotiated contract with ICANN, to continue to raise wholesale prices 7%/year pretty much indefinitely. And with roughly 65 million .com domain names registered worldwide, Verisign just added $27 million dollars per year to their bottom line.
It’s good to be a monopoly.
Wow. Verisign cashed in.
I remember back when it was 100 dollars for a year.
Now there’s motivation to RUN to your discount registrar and ‘lock-in’ a currently offered low price for the next few years or so, no?
When does Verisign plan to ‘pass-on’ this price hike?
The guile of VeriSign is matched only by the cheek of ICANN. I cannot argue with a for-proit company’s attempt to maximize its margins, but the ineptitude of the regulators, including the U.S. Department of Commerce and the U.S. Department of Justice is epic.
When ICANN and VeriSign executives told the U.S. Congress that raising prices was not a given, the audible gasp from the audience became the soundtrack for the whole scheme.
As an early critic of the .com deal, being proved right is no consolation.
Why this should all be governed and controlled by a private company is beyond me. The net is the modern road system, but with far less capital cost.
Mind you, we don’t need big brother government barging in here; we need an open source (in spirit, not just technology) alternative that gains widespread adoption.
Ah, thank God I got this baby in for $5.99 retail
John - an open source alternative to registering domains?? no comprendo
Love GoDaddy. Wasn’t all that long ago that Verisign charged a lot more than $6/yr. Bet they miss those days.
‘Wasn’t all that long ago that Verisign charged a lot more than $6/yr.’ - so what? It costs them roughly $1-$2 per domain. They have a nice little monopoly to make millions and millions.
Nice way to quickly (1 year) to boost profit margin by doing absolutely nothing.
Ahmed, uh, gee let me think.
65Million x $6/yr, vs. 65M x $29 [or even $100] per year.
GoDaddy and other low cost registrars forced Verisign to drop their prices dramatically a while back. Inching them back up obviously increases their revenue but it’s still a far cry from when they could charge whatever they wanted.
Are there that many domains left? Everytime I try to register one it’s already taken!
I don’t have issue with the price. Frankly, a dollar a month or less is prett negligilbe. My issue is with the fact that one organization gets to dictate the terms of the entire industry.
Once again, the only real monopoly is a government-sanctioned monopoly. I bear Verisign zero ill will, they’d be dumb not to raise prices. But having some unelected agency just decide what it should cost is stupid. The reason the cost and price are not connected is that it’s just dictated, nothing to do with the market. Not a surprise that it stinks.
Mike - I hate to disagree with you, but here are my thoughts….
1. pricing has come down so much - I remember (like Alaska) when it was $100. I also remember when basically you had to go thru one source to buy a name. Then it was about $35/yr.
2. While Verisign controls the top seat, companies like GoDaddy have brought rates down like nothing else. It is similar to gas/phone deregulation. The gas company still gets a cut except now there is another “source” to buy from. Of course in the gas example in GA, it has been a nightmare.
3. While I think an increase of 7% is a bit much and should probably be half of that, they should be able to increase something. Every else does. Your ads were not $x when you started, they were x/y. Everything increases.
4. Anyone else remember when it took 7-14 days for a .com to work? Now it takes hours, sometimes even less than an hour. While I am not sure if this is verisign or something else down the pipe (who runs the dns), if they are, they deserve an increase for that alone.
5. for #9 don - I am sure as the number of .com domains has exponentially grown, so has their needs to maintain them all. So I don’t know that I would say they “done absolutely nothing”
Amy - umm. If something costs 10 cents, and they charge you $100, and then charge you $10 - they are still overcharging you.
How come .infos are so cheap? Are they somehow special?
VeriSign is getting away with making extra millions. Technology makes things cheaper and cheaper, so in reality, it costs them a lot less now than it did when domains were made wholesale.
And if you want to talk ‘back in time’ - well crap, domains used to be free. Why not go that far back?
These guys are basically minting money (and they have the right to charge 7% more every single year), and you are defending their monopolistic practices? Fantastic …
comments off for the previous post? lame! btw you should also mention that some of these “sponsors” are FOM
Allen,
I doubt the costs are $25m / yr.
Is anyone going to die over $0.46?
HOWEVER, the principle behind this is what really matters and this will blow by so quietly, but is just as bad as the ole Standard Oil days (wow, just brought everybody back to 11th grade history :P)
You guys are mixing apples and oranges.
Versign used to be a Registrar, like godaddy.com and rebel.com. They no longer are. It was when they were the only Registrar that they charged $70 USD per domain.
Now, Verisign is not a Registrar, but rather operates the Registry for .com
That means that the price your Registrars pay is going up. All of them. Which means that the price you pay at ANY Registrar is going to go up. When the monopoly Regulated cost goes up for a Registrar, the end user will end up paying it.
So all end users of domains just saw their prices go up at least 7%. More if your Registrar also increases his take by 7%.
Ahmed, we’re not ‘arguing’ the same issue. If they can charge it and people pay it, then good for them [and I wish I had stock]. You can rightfully bash their practices all you want, and you certainly don’t have to buy from them. The market forced their prices down, as all good capitalist systems usually do. And if you read my post I’m hardly defending them. I buy my .com domains from GoDaddy. I don’t think it costs $23,000 to build a new car, yet people pay it b/c they want that car.
.info is cheap b/c no one wants a .info or .xxx or .biz URL extension - i.e. no demand.
Allen - you’re mixed up. Verisign is the registry and is the sole provider of domain names to registrars, like Godaddy. You can’t buy domain names from Verisign directly.
The wholesale price just went up for domain names.
Amy - you DO have to buy from Verisign…just indirectly through a registrar. Every domain name is controlled by them.
Verisign is a registry and a monopoly. GoDaddy is a registrar, and Verisign is their sole supplier for .com domain names.
The point about .info is that the cost of running a registry is not as much as Verisign claims (not that ICANN allowed any bidding).
Its a monopoly, and we are forced to pay them. In fact, the 7% allowance was part of the settlement so that Verisign would drop their lawsuit against ICANN.
Thanks Mike - but re-reading my points, I think they may still be valid…
Mike, how about we do something about the people that are buying hundreds of thousands of domains with the purpose of just putting ads on them, manipulating search engine results or create a business around hijacking any meaninful domain name with the intent of selling for a lot of profit…
http://marcelo.sampasite.com/b.....ost-30.htm
So wait Marcelo - its better Company X has it instead of Company Y?
Raising domain prices isn’t the solution.
How could we rid ourselves of this monopoly? The problem is authority. How can we verify the identity?
People you are all missing the point….
Verisign sets the market. Services like godaddy can either lose 7% per sold domain or the can gain if they up their prices. The bottom line is that Verisign is going to make more money
AhmedF, The reason .info domains are so cheap is because they are not really popular. So, the registrar behind .info is offering promotions. The price is only good for one year on an .info name. So, what happens after that year? You pay full price and the registry makes a crapload of money. Also, .info is not as desirable. It’s like comparing a Geo to a Lexus. Its in the same arena, but completely different.
Desirability has no voice in this - it is about a monopoly abusing its monopoly to make more money.
The point is that the .info registry is run at $1-2 per domain, whereas VeriSign charges $6+ With the scale of things, more volume means *less* cost per domain, not less.
btw - has anyone confirmed if the current registrars will raise their rates?
Nothing wrong with making a few extra bucks. Watch me Binge Eat For Sanjaya http://www.tmz.com/2007/04/05/.....r-sanjaya/
So a domain costs around $9.00 at godaddy per year now, that is nothing. Of course they need to raise their prices, Verisign is a BUSINESS to make money.
This is America, they have the right to make money. They make more money they spend more money and it creates more jobs and more wealth in our economy. That is why America is the greatest county in the world.
As long as Verisign is performing by the laws of the country then they are doing the smart thing to try to make more money. I never heard of a business that has the opportunity to make more money, but choose not too.
Maybe it’s time to drop “.com” and try something new? But do cheaper options even exist? Namecheap doesn’t seem to offer anything lower than $8.88/year
jackb,
The issue is that an American corporation has a government granted MONOPOLY over a global system. If the US government is fine with selling the registry to a private for profit company like they did - fine, that is their issue. Unfortunately not only do American consumers and businesses suffer, the entire world does. .Com is a global extension. Keep your monopolies on .us. Ironically, it is not the American way.
I had a really good read on this, very detail,
and very useful information.Thanks.
VOB to iPod
http://www.vob-converter.com
Wow jackb - Verisign is not a typical business. They are granted a monopoly - why can’t people get that?
And then we have registrars like Registerfly.com who do a runner with other peoples’ money and ICANN do a lip service over that.
Well, Verisign is not the only provider of top level domains. There are more than 200 others: http://www.iana.org/root-whois/index.html
make your choice.
The point is that Verisign is a monopoly - they get to charge for every single .com domain in the world every year. As they are a (natural) monopoly, they should be subject to regulatory oversight. Rather than allowing them to put their prices up, ICANN should be mandating that they put their prices down year on year. How could they do this? By becoming more efficient, by economies of scale. So, if they had to reduce prices by 1% each year, they could keep their current profit margins, they’d just have to reduce costs by 1% each year. Surely that’s what companies should be doing? Then, if they needed to reinvest in infrastructure etc, ICANN could consider their case and allow them to not reduce for a year or two.
By allowing them a 7% increase in fees, is ICANN saying:
(a) Somehow your costs have gone up by 7% and we want you to reclaim that
(b) We think you are due a profit hike on the house
(c) We know you are reducing your costs, but we think you should be rewarded by a profit hike of more than 7% on the house
Whatever it is, it doesn’t look like ICANN puts much pressure on Verisign to deliver value.
This can only be a good thing.
Increas in Domain pricing will remove some of the Domain name squaters who buy thousands of domains and stiffle Internet Growth.
Hopefully sometime soon Icann will get rid of the rules that unable “Domain Kiting “.
http://www.bobparsons.com/MayKiting.html
so does this mean that Neustar will also start raising their prices since they control .biz, .info, .uk and 20 other TLDs??
Where are the Antitrust authorities?
You know, I’m not really surprised by the increase, I’m surprised at all the money places like GoDaddy waste. A few weeks back I wrote GoDaddy really wants to keep my business, they’ve easily spent upwards of $20 in time to call me and send me postal mailings reminding me that a domain was expiring.
Can anyone make a “.com” like ending ? I guess its called a TLD?
- anyways I would like to suggest .WEB - for the “inter web” lol
_RB
Just ruminating here: if VeriSign is a monopoly (and there are all sorts of studies on the behaviour of monopolies) then that means there is no actual “free market” competition. Which means that some other form of external control is required in the public interest. In other words, government regulation…independent, not in the pockets of the monopoly…and firmly committed to safeguarding public interest.
As a comparison, look at what the oil companies are doing to us. (Not a monopoly, I forget the precise term, but close enough…a small number of companies in collusion…) Does anyone feel fairly treated by them?
I’m vaguely remembering from back in my university days that monopolies are a recipe for disaster. Wasn’t the Soviet Union a “monopoly”?
Verisign argues they do not have a monopoly, because there are other domain names besides .com. It’s true to an extent, but even today few companies brand themselves something other than .com.
From the outside world looking in on VeriSign and ICANN and the ongoing RegisterFly saga, it’s great to see the US being such stellar stewards of IP. A relatively small number of companies own all the ICANN accreditations.
Domains with .com extension are still king. Topix.net acquired the domain Topix.com for approx $1M back in January. Topix.com was originally owned by a Canadian computer graphics and animation facility that specialized in character animation, special effects, film titling, and type and broadcast design.
This shows the importance of having a good domain for your business/company and that .com extension is still king. Here’s a clipping from Domain Name Wire (http://domainnamewire.com/2007/03/13/topixcom-sells-for-1m/):
“When entrepreneurs start a web site they frequently overlook the importance of a good domain. They think that if the site takes off they can always buy the more expensive domain they want. But Topix.net is a good example of why this is a bad strategy. Buying a good domain name from the get go pays off in the long run.”
@ “Verisign argues they do not have a monopoly, because there are other domain names besides .com.” Wow, what a crock. It’s like the IRS saying it doesn’t have a monopoly on federal taxes because there are other countries besides the USA. Jackasses. Although I have traded the stock at various time over the years and made money, so maybe I should simmer down a little. Still, I don’t like monopolists telling me they are not monopolists… it’s insulting… they’re basically calling us stupid if they say that and expect us to believe it. Cheers, chrisco