AOL, 4 Others Win Right to Register Internet Names
America Online will be one of the first companies to go head-to-head against Network Solutions Inc. in the lucrative business of registering Internet domain names, the Internet Corp. for Assigned Names and Numbers said Wednesday.
AOL, the nation’s largest Internet access provider, will be among five initial challengers of Network Solutions, which has enjoyed a government-sanctioned monopoly for registering domain names ending in .com, .org and .net for six years.
The new companies will be able to compete with Herndon, Va.-based Network Solutions as early as Monday. An additional 29 companies are poised to enter the market this summer, said ICANN, an L.A.-based nonprofit corporation that was formed to manage the Internet domain name system.
The imminent breakup of the monopoly marks a milestone in the effort to transform the Internet into a self-governing network.
It “is an important step in the Internet’s evolution,” said George Vradenburg, AOL’s senior vice president for global and strategic policy. “Movement to an open, competitive model in domain names is, in fact, a natural step for a medium that has thrived because of its openness.”
With more than 17 million members, Dulles, Va.-based America Online is expected to be a formidable competitor to Network Solutions, a government contractor that has become a leading Internet company.
“There’s no question that if they tell their millions of customers that they can register through AOL, that is likely to have a significant impact,” said Marty Burack, executive director of Internet Society, a Reston, Va., group that represents Internet users. But he said the flip side is that AOL’s heft could stifle broad-based competition.
The five initial competitors include both large and small companies from around the world. Besides AOL, they are the Council of Internet Registrars, an international consortium of domain name registrars; France Telecom’s Oleane unit; Melbourne IT, an Australian information technology concern; and New York-based register.com.
Other companies that have been accredited by ICANN will be able to participate after the initial test period, which ends June 24.
To become a domain name registrar, each company must pay a $10,000 licensing fee to Network Solutions to use a new, shared registry system, said Christopher Clough, an NSI spokesman. Competitors must also pay Network Solutions an $18 fee to license a domain name on behalf of each of their clients for two years, Clough said.
In essence, the new competitors will be buying registration services from NSI at a wholesale rate and then reselling them--with their own bells and whistles--directly to Internet users. Network Solutions charges its customers $35 per year for domain name registration.
News of the agreement sent Network Solutions’ shares soaring $32, or 53%, to close at $92 on Nasdaq on Wednesday. Investors saw the deal as a major new revenue source for the company.
AOL shares rose $14.06 to close at $142.75 on the New York Stock Exchange on Wednesday.
