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VeriSign Keeps Control of 2 Key Domain Name Suffixes

April 03, 2001|From Reuters

The Internet's top naming authority on Monday modified VeriSign Inc.'s control over domain name suffixes but allowed it to keep its thumb on .com and .net for decades if it follows the rules.

The Internet Corp. for Assigned Names and Numbers, or ICANN, limited the term of VeriSign's rights to the .org name to the end of 2002 but gave it the chance to keep the .com suffix after its agreement expires and to contend for the .net name after its control ends in 2006.

Mountain View, Calif.-based VeriSign had supported the plan, which allows it to keep the popular .com name through Nov. 10, 2007, and have the right to renew for four more years if it meets certain criteria. VeriSign operates the world's largest domain name registries.

"It's a really good deal for VeriSign," said Bob Fagin, a Bear, Stearns & Co. analyst. "As long as they don't do anything really awful in terms of running .com, it's basically self-renewing, and they can at least be a contender for .net."

The original pact gave VeriSign an automatic right to operate the three registries through 2007, but jitters over VeriSign's future right to the names had sent its stock price tumbling.

The Commerce Department oversees ICANN and must approve the agreement.

Shares of VeriSign closed up 31 cents at $35.75 on Nasdaq, close to its 12-month low of $29.88 and far from its high of $214.38.

Once VeriSign's rights to the domains expire, the .org name will be turned over to a nonprofit group and .net tendered to interested companies, ICANN said.

Under the deal, VeriSign would provide $5 million to the nonprofit group that takes over .org, invest at least $200 million in research and development, pay its full share of ICANN expenses, charge equal fees for registering names and eliminate the one-time $10,000 new registrar and other fees.

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