Preparing to face competition in the lucrative business of registering top-level domain names, Network Solutions today announced an international marketing program and agreements with six Scandinavian Internet companies.
Network Solutions' contract with the National Science Foundation to be the sole registrar of domain names expires at the end of September. At that time, the company expects to face competition in the domain names registration business--but it has a considerable head start in terms of branding and name recognition. With the marketing program and agreements announced today, Network Solutions plans to widen that lead by expanding its presence overseas.
Senior White House adviser Ira Magaziner said earlier this month that the government is beginning negotiations with Network Solutions over how to handle the turnover of its authority over registering domain names once September 30 rolls around. The U.S. government proposed last month that the private sector establish a nonprofit organization with wide representation from all parties interested in the domain naming system. That group would be charged with making key decisions about domains, such as whether to add new top-level domains.
Individuals in any country can now register domain names directly through Network Solutions or through advertising-supported Web sites such as Register.com.
But a large part of Network Solutions' business comes through ISPs that act as resellers. In addition to reaping profits from marking up domain-name registration or bundling it with other services, Network Solutions' ISP partners receive a higher level of customer service, billing information, and technical support if they meet specified sales targets.
Typical terms lock Network Solutions' partners into 12- to 24-month deals during which Network Solutions is the "preferred provider" of domain name registration. For the time being, that status doesn't mean anything because the company has no competition in registering top-level domains. But when competitors arrive on the scene after September 30, that status will mean that Network Solutions will have sewn up much of the ISP market--foreign and domestic--before its competitors arrived on the scene.
The six Scandinavian countries--five ISPs and one registrar of domain names other than ".com," ".net," and ".org"--are the first in what Network Solutions promises will be long series of international partners. Next in Network Solutions' sights are ISPs, Web hosting firms, and domain name registrars in Asia as well as in other North American and European countries.
Countries outside the United States are assigned national domain name suffixes such as ".dk" for Denmark, ".se" for Sweden, and ".no" for Norway. But companies and individuals in those nations increasingly want an additional Web addresses in one of the three top-level domains.
In the first quarter of this year, nearly 100,000--or 29 percent--of Network Solutions' 340,000 registrants were companies or individuals outside the United States.
"Most of that 100,000 came without our trying to stimulate demand," Network Solutions spokesman Bob Korzeniewski noted. "Now we're trying to stimulate demand through reseller channels so we can project our brand identification on a global basis."