VeriSign (VRSN, Financial), the .com provider company, just announced the renewal of its .com Registry Agreement with the Internet Corporation for Assigned Names and Numbers (ICANN) effective December 1, 2024. Investors see this as a positive measure taken by Verisign to maintain the company's revenue stream from domain name registrations.
VeriSign provides domain name registry services like .com and .net domains for global citizen. They charge fees for domain name registrations and renewals.
VeriSign's Monopoly in the Domain Registry Industry
On November 22, 2024, the U.S. Senator Elizabeth Warren expressed her concerns regarding VeriSign's monopoly position in the .com domain registry industry due to its exclusive control over the .com and .net top-level domains.
Warren, along with Congressman Jerry Nadler, they argue that VeriSign over its dominance has overcharged customers by raising prices by over 30% since 2018 without significant improvements. They urged the ICANN to investigate VeriSign, and the current agreements should be renewed.
Just three days after Warren's argument, on November 25, 2024, VeriSign signed the requested renewal agreement with ICANN. The renewed agreement includes permissible fee increases based on the U.S. Consumer Price Index, but VeriSign announced they will set no changes to the pricing provisions for .com domain names.
VeriSign also agreed to the obligations to mitigate DNS abuse, enhance service level requirements for Registration Data Access Protocol, and committed to improve the security, stability, and resiliency of the .com. Warren and Nadler can be relieved as their concern is now addressed.
VeriSign Has the Moat
VeriSIgn is uniquely positioned as the sole operator of the .com, which is used by millions of websites worldwide. They have no competition in the .com market, giving them a significant competitive moat!
The famous investor Warren Buffet loves moat and through his company Berkshire Hathaway, he collects 12.8 million shares of VeriSign that valued at approximately $2.32 billion. VeriSign makes around 0.86% of Hathaway's equity portfolio.
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