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How does a company with a monopoly on something like this and a net profit margin of 46% on a billion dollars of annualized revenue justify an increase in an already very high wholesale price? https://www.nasdaq.com/market-activity/stocks/vrsn/financial...
They have a monopoly and they’re allowed to do it.
Please note that Verisign has a profit margin of 50%. Ie, 50% of their revenue becomes pure profit. This is an insane level. Apple is at 23%. Facebook at 35%. Profit margins that high only come from rent seeking backed by the full force of the law.
It's my understanding that ICANN ensures that the namespace/numerical space infra is secure and stable.
Earlier quoted context omitted.
I prefer the term "Domain Scalping". Domain Squatting has a specific legal definition and it really only applies to people trying to sell a domain name that involves a company with a pre-existing trademark.
I think it's more speculation than scalping. Scalping implies exclusivity, and there is some legal recourse if a domain is your trademark.
It's also my understanding that the trademark rule only applies if the trademark was made before the scalper purchased the domain name. If you're a startup or just someone who wants the domain then you're out of luck. Your only options are to pay the asking price or hopefully wait until their claim on it lapses and they don't renew.
The link is not just about the amount, A section, > There are about 152 million domain name registrations .com today so Verisign will make about $82 million more in the next year following the price increase out of thin air. > Verisign will be able to increase the price of .com in the next 3 years as well. > Verisign will suck about $3 billion dollars out of the world economy just by having some powerful friends at I…
> Verisign will suck about $3 billion dollars out of the world economy just by having some powerful friends at ICANN.
It's not a zero-sum game.
If Verisign manages to extract $3B from the poverty-stricken folks who are buying up .com domains, it doesn't just disappear (unless, of course, Verizon takes it in cash and sets it on fire in the basement.)
That $3B will then be spent on whatever pet projects Verizon feels like spending it on, thus re-injecting into the global economy.
I personally think that Verisign should have to compete to run the .com registry, just like how we do FCC spectrum auctions, but hand-wavy statements like "suck about $3 billion dollars out of the world economy" do not help make that case.
When Network Solutions had a monopoly these were $100/2 years, later falling to $70/2 years. At this pace it will be a long, long time before we are back up to the bad old days.
In other words, I think the .com registry should be a non-profit, public service, rather than a money-printing machine that some lucky company gets to exploit.
Why does the world allow the USA govern the domain space at all? Some months ago the USA seized the domains used by Iran's IRGC, in addition the .org was almost up for grabs a while back, and now a sudden pricehike of the .com tld. Obviously the internet has grown way beyond the powers of a relatively tiny non-profit that is ICANN so why not upgrade it into something more proper that is governed worldwide.
Something like a summary of the discussion/chaos on the matter: https://en.wikipedia.org/wiki/Internet_governance
Only upvoting this for visibility. This decision hurts the consumer/registrant in the end, making future registrations and renewal costs less accessible to a lot of markets. For clarity, this $8.39 amount will become the wholesale cost to the registrar — we of course need to markup on top of that to cover our processing costs, overhead to offer great support, mitigate abuse, etc. Registrars do the heavy lifting in de…
Is there a reason for doing this besides ‘we can’? Not sure if there’s something we aren’t seeing or aren’t privy to.
Please note that Verisign has a profit margin of 50%. Ie, 50% of their revenue becomes pure profit. This is an insane level. Apple is at 23%. Facebook at 35%. Profit margins that high only come from rent seeking backed by the full force of the law.
Elsevier had/has also a profit margin at about 35%. As a small structure you can achieve that but at a very large scale, this is effectively the sign that natural competition is not working as expected.
With all due cynicism, has their been public research on the sort of clever accounting tricks a company with Elsevier's business model must surely be using to keep their profit margin as low as 35% ..?