VeriSign: profiting from name dropping

VeriSign's new domain name service would essentially allow it to charge twice for many premium domain names, despite pending lawsuits and federal legislative action that seeks to prevent it. Competition for already registered domain names is fierce and some customers could inadvertently pay for the rights to a domain name that is not due to expire for years to come.

VeriSign's Network Solutions subsidiary (NSI) has announced Next Registration Rights, a retail service that will leverage the Waiting List Service (WSL) wholesale offering that VeriSign plans to begin offering in October.

WLS is a method of letting users register an already-registered .com or .net domain name if it becomes available in future. The WLS will be available to all domain name registrars accredited by industry manager the Internet Corp for Assigned Names and Numbers (ICANN), but NSI is the first to offer a retail version of it.

Essentially, customers are asked to pay an annual subscription fee in excess of the current going rate for a usable domain name (currently $5 to $30 per year) for a rights on a domain that they may or may not ever get the chance to use.

Unless the buyer does a bit of research beforehand (by querying publicly available Whois databases) they could find themselves using Next Registration Rights, or another future WLS service from another registrar, to buy a one-year subscription on a domain that is not due to expire for 10 years.

WLS may not even go live because some of VeriSign's rivals that offer competing services are suing to block the service, and have also managed to recruit some US Congressmen to propose legislation that would have a similar effect.

Many people find already-registered names attractive, as they are likely to have more mnemonic value, and in many cases will already have traffic arriving from links already out there on the web.

Indeed, the market for so-called "dropping" domain names is already fiercely competitive. Dozens of firms, for example Dotster Inc and eNom Inc, offer services that leverage the existing .com registry infrastructure to sell deleting names to customers.

While the WLS would essentially render most or all of these competing services technically impossible and obsolete, VeriSign says that WLS will level the playing field, offering certainty and efficiency to registrars and registrants.

Source: Computerwire/Datamonitor

Recommended research: Datamonitor, "Web Services II:Managing the future" (BFTC0761)

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