[Random-bits] Verisign/Namezero

[James Love]

This is a real interesting story, where it appears as though VeriSign
was giving money to a firm to buy domain names from VeriSign, allowing
Verisign to report higher sales, and have an equity stake in a firm that
"loans" free domain names in return for looking at ads.  Jamie



http://aol.thestreet.com/comment/siliconstreet/1123774.html

What's in a Namezero? To VeriSign, a Way to Sign Up Users
By Adam Lashinsky 
Silicon Valley Columnist
10/13/00 7:00 AM ET 

SAN FRANCISCO -- In late August, a Silicon Valley start-up called
Namezero.com, which supplies free Internet domain names, announced that
it had raised $25 million in venture financing. 

In its news release, Namezero was vague on exactly who had invested in
its "strategic third round." However, the newsletter VentureWire
reported that an unidentified corporate investor had joined the firm's
existing venture firms in the round. 

At the time, I speculated in RealMoney.com's Columnist Conversation that
the investor was VeriSign (VRSN:Nasdaq) , owner of Network Solutions,
the leading provider of domain-name registrations.  Later that day, Aug.
30, Verisign confirmed that it had made a "small" investment in
Namezero, though it wouldn't say how much because it doesn't make a
practice of disclosing the size of its investments. 

Investors who are puzzled about the 21% drop to $147.50 in Verisign's
stock over the last three days (erasing $7.6 billion in value) can look
to tiny Namezero for an explanation. Namezero buys domain names (such as
you@you.org or .net or .com) from VeriSign and lets its users "borrow"
them, assuming the user is willing to view Namezero's advertising.
Namezero pays VeriSign between $8 and $10 for the use of the name, a
service for which VeriSign typically charges retail customers $35 per
year. 

   [snip]

-- 
James Love  mailto:love@cptech.org http://www.cptech.org
Consumer Project on Technology, P.O. Box 19367, Washington, DC 20036
voice 1.202.387.8030  fax  1.202.234.5176