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NSI keeps Centraal within reach

In the face of blossoming competition, the world's dominant ".com" registrar, Network Solutions, is smart to keep the rising Centraal close to its vest.

In the face of blossoming competition, the world's dominant ".com" registrar, Network Solutions, is smart to keep the rising Centraal close to its vest.

Centraal's RealName tool eliminates the need for consumers to remember the Net addresses Network Solutions (NSI) sells and lets them immediately drill down to a specific page on a Web site instead of making them navigate from the front door.

RealNames is integrated in Microsoft Internet Explorer 5 and will be in Inktomi's search engine in the future, according to the company. The terms already generate 1.6 million search queries per day through AltaVista. Microsoft also is considering becoming a RealNames reseller.

Companies pay Centraal See Don Telage Newsmaker $100 per year for a RealName and essentially can sidestep marketing efforts to sell people on "their-name.com." For example, using RealNames, a surfer can type "Pepsi One" into their browser instead of scouring "Pepsi.com" for the page about the company's latest soft drink.

Centraal's revenue model also is promising, analysts say. Whereas NSI can close one sale by registering "eBay.com," the online auction house has 1,200 RealNames and pays Centraal each time a Net user enters its site via one of them. This pricing model ranges from 5 to 95 cents for each lead.

It would seem that the barely two-year-old Centraal is giving Network "we sell online identities" Solutions a run for its money.

But NSI has played its cards right, according to analysts, by taking a 10 percent stake in Centraal last December and by reselling RealNames on top of registering domain names, which cost $119 for a two-year hold on a name. Under the terms of the deal, NSI has the option to raise its investment in Centraal to up to 19 percent.

"It's very complementary, and they both get significant benefits because you still need the domain name," said Jim Preissler, an analyst at PaineWebber.

And NSI is glad for that.

"We're both in the branding business, and it just makes a lot of sense to work with them on this," said NSI spokeswoman Cheryl Regan. "We don't see it as a threat."

Network Solutions has been the sole registrar of domain names ending in ".com," ".net," and ".org" since 1993, but thanks to a shift in oversight of the Net's technical underpinnings, America Online and four others are getting in on the action.

Anticipating losing its exclusive contract with the U.S. government, NSI has ramped up its services, offering tools for building an entire Net presence. But although Centraal is an NSI partner, it also is a potential competitor when it comes to helping companies build brands.

"NSI is ahead of the curve, but our deal with them is not exclusive," said Centraal chief executive Keith Teare. "There is always that possible tension between us. But '.com' is not going to go away."

Some industry watchers wonder if it might have been smart for NSI to buy Centraal--if it had the chance. Now the start-up is mulling going public, which naturally would up the ante.

"From a strategic point of view, [a buyout by NSI] would make sense," said Ray Archibold, an analyst at J.P. Morgan Securities.

However, both NSI and Centraal insist they are partners, not rivals, and that no buyout is on the horizon.

"Neither party is interested in that--not at all," Teare said.

NSI spokesman Chris Clough noted that Centraal is an important part of NSI's strategy, and that is the reason behind the investment.