Verisign: So many people fooled

5 Apr
2007

Ugh. I just read that VeriSign is increasing the base cost of .com domains 7%, from $6.00 to $6.42.

Some background: A while ago, ICANN and VeriSign sued each over. In the settlement (as VeriSign has tons of cash, and ICANN doesn’t), ICANN agreed that VeriSign could continue to be the exclusive provider of .com/.net for the next seven years. Furthermore, VeriSign was given the ability to increase the base cost (which at that point was $6.00) upto 7% every year. The word ‘upto’ being useless, as how many corporations decide to go for 5% extra profit instead of 7%?

Anyway, VeriSign, being the opportunistic monopolistic company they are, jumped at the first chance to make some more money.

This is a company that has an exclusive lock on .com/.net domains. For every year I renew this domain, they make $6.00. Now instead, they will be making an extra 42 cents. Going by TechCrunch’s math, that means $27 million extra per year. For doing nothing.

What is rather disheartening are the people spouting out comments over at TechCrunch without having a clue what is going on. The basic arguments:

  • Domains used to be $100. Thats great – they used to be free. Stupid argument
  • Don’t use them. I don’t know what people are smoking – if you buy a .com or .net, VeriSign will get your money. The low-cost registrars still pay that fee. And they had nothing to do with how ‘cheap’ VeriSign is (ie – they did not exist until the price went down, not vice-versa)
  • Domainers. Love them or hate them, it is Google and Yahoo that give them the money on their PPC pages. $6 vs $6.42 – you think that is going to stop domainers? :)
  • Infrastructure. This one really irks me. Do you remember the cost of hosting 10 years ago? 5 years ago? Newsflash: technology makes things cheaper and cheaper. VeriSign states 30 billion DNS queries a day – and yet OpenDNS does over a billion without much problems. Somehow .info operators are able to run a registry at $1-$2 per domain, and that is with much smaller volume. Scale up from 5 million domains to 65 million domains, and the cost per domain goes down, not up.

What is just disgusting is how people are actually defending a monopoly. VeriSign answers to no one (well, they are supposed to answer to ICANN, but just observe the Registerfly debacle and how incompetent they were at that).

If something costs me 50 cents, and I used to charge you $50, but now charge $5 – I’m not doing you a favor – I’m still ripping you off.

3 Responses to Verisign: So many people fooled

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David Ulevitch

April 5th, 2007 at 9:51 pm

Thanks for the callout to OpenDNS. We look forward to doing 30 billion DNS requests a day soon. :-)

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Ahmed

April 5th, 2007 at 10:32 pm

Hey – I use you guys, I was compelled to :)

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Adam

April 6th, 2007 at 12:07 am

nice post.

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