April 13, 2007 | Posted By : Liam Eagle at 1:41 AM PERMALINK | Blog Comments (0)

Just How Much Money Does the .com Increase Mean For VeriSign?

We reported last week that VeriSign had announced increases to the registry fees for the .com and .net domains.

Beginning in October, VeriSign will raise the fees 42 cents for the.com and 35 cents for the .net domain.

The increase is the maximum amount allowed by VeriSign's new contract with ICANN (7 percent). I suppose it wasn't technically a sure thing, but I certainly would have picked "maximum amount allowed by contract" in the office pool.

Tom Galvin, the VeriSign representative two whom I had the chance to speak, explained the details of the deal, specifically the price increases.

"In the entire course of the VeriSign agreement, over six years, the most the registry fee can go up is $1.86. So it doesn't give us carte blanche on how much we can raise it. It creates specific limits, saying it can only be raised in four of six years, and the cumulative amount of that total means that in six years, it can go from $6 to $7.86 at its height."

At the time of the announcement VeriSign pointed out that, according to its own research, according to its own research, the average per-year retail price for .com domains among the top 10 registrars is $20.24, and $20.25 for .net domains. The point being, of course, that the increase in price is unlikely to affect domain customers directly.

I was curious, though, just how much the change would affect the bottom line at VeriSign, being as even 42 cents can build up pretty quickly over the course of a few hundred thousand domain registrations.

According to DomainTools.com, there were 787,319 new domains registered in the last 24 hours. And, while there's no way of knowing exactly how many domains might be registered in a given day come October, I think it's fairly safe to assume the rate of domain registrations is in no immediate danger of decreasing.

So let's imagine that 787,319 .com domains are registered on October 15th. That amounts to $330,673.98. And while I'm not perfectly acquainted with the specific financials of VeriSign, $1.5 million a week seems like a fairly significant infusion of new revenue by any standard. And that's just for .com. The .net domain would be worth another $26,497.10 a day.

There could be more to the equation, but the basic fact of the matter would seem to be that the price increase will mean a major bump in revenues at VeriSign come October.