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ex-ICANN Board member says .COM costs $0.14
April 6th, 2007 by 
Jay Westerdal
During my recent interview with Karl Auerbach, a former ICANN board member, he told Name Intelligence that Verisign spends less then 14 cents to maintain a domain name in its registry. VeriSign hasn’t complained about the load on the .COM registry due to Domain Tasting, which it currently allows. Domain Tasting is a practice where currently 97.6% of domains are never paid for but go through the whole DNS life cycle in only five days. The 2.4% of domains that are kept need to bare the whole registry cost. With a wholesale price of $6.00, the average cost to run the registry must be under 14 cents per domain or Verisign would be loosing money and crying to ICANN about Domain Tasters. These calculations come as a huge shock after the announcement by Verisign that they will raise rates 42 cents per domain. The new rate will be $6.42. People have to wonder why Verisign is raising their rates 4 times the actual manufacturing costs on their ICANN granted monopoly of .COM. Verisign already covers their manufacturing costs by a whopping 40X return on their investment. Most companies would kill to be in a position like that.
Name Intelligence gathered data for an Associated Press article that ran in February. This article showed the decline of paid domain names. Name Intelligence has a huge database of every domain transaction since 2002. It is within Verisign’s control to stop this behavior so we know it is not costing them money. However, it is Verisign’s fiduciary responsibility to its Shareholders to raise the prices by the maximum amount allowed. So, ethically, it would be wrong for Verisign’s CEO not to take advantage of domain owners.
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Posted in Domain Tasting, ICANN, Verisign |
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