Network Solutions Inc (NSI), which has just had the monopoly for registering top level domain names pulled from under its feet, says its size and experience will outplay new competitors.
Until this year NSI held an exclusive contract with the US Government to issue '.com', '.org' and '.net' domain names. Earlier this month, the Internet Corporation for Assigned Names and Numbers (ICANN) named five companies that will test a new competitive shared registry for these domains.
A further 24 other companies have applied to be accredited registrars when the registry opens fully at the end of June.
NSI, which currently registers 300,000 domain names a month, said today it welcomes its new found competition. But warned that being a domain name registrar is not a cash cow from day one.
"It has never been any surprise to us that there was going to be competition in '.com', we have know it for about six years," Doulgas Wolford, senior vice president of Network Solutions told VNU Newswire.
"We have played a key role in accelerating competition - monopolies are a double edge sword that allow you to do one thing and one thing only," he said.
Wolford believes its competitors will find the going tough, unless they already have a robust network in place. NSI has invested $100 million in its network operations centre in the last two years. "The business is much more difficult than people think, we lost money until we had around 600,000 customers in place - the challenge for competitors will be to get a lot of customers to make money."
"If I was an Internet start-up and wanted to make money on the Internet, it wouldn't be domain names," added Wolford. "It is a scale game - it is good business for us, but tough for anyone else."
NSI plans to roll out additional services on the back of its domain names business. First will be the '.com' directory, a business to business Yellow Pages style product.
"A lot of searching goes on on the Internet, but very little finding," explained Wolford. "The directory will take our 4.2 million customers search out businesses and enrich them so it is easier to search for exactly what you want." Anyone registering '.com' with NSI will get a free listing.
Wolford believes legal issues will put smaller companies becoming registrars. "There are significant legal issues in domain names and they are increasing, not decreasing," he explained. "We have had to defend ourselves in 50 lawsuits, we've won them all but it has probably cost us $25 million in legal costs."
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