Verisign, Inc. (NASDAQ:VRSN) stock opened low on Friday, following changes in the terms for the renewed contract, which bar it from increasing its annual charges on the .com Domain. VeriSign shares fell by more than 14 percent during the early trading hours to trade at $33.61 per share.
VeriSign is a provider of Internet infrastructure services to several networks across the globe. The Internet-based company has been managing the worlds leading domain end notes, the .com and the .net Domains, since the year 2000. It also manages the .cc, .name, and .tv Domains.
Verisign, Inc. (NASDAQ:VRSN) has been increasing the .com registration fee regularly without economic drive, which has now forced the U.S. Commerce Department to bar such fee increments from taking place in the future, under the new contract terms. The company’s stock traded at a new low since October 26, having rallied 10 percent through Thursday, year to date.
The .com and .net Domain registration manager had received some calls for non-renewal of the contract from the Internet Commerce Association (ICA), the representative of website owners. However, the U.S. department of Commerce went on to renew the contract for with the Virginia based Application Software company.
The company charges $7.85 annually for the .com Registration as compared to $5.86 charged on the .net. However, the website owners can now breathe a sigh of relieve as the U.S department of Commerce will now have to approve any price hikes on the .com Domains.
CNN Money reported, “ICA claimed that Verisign, Inc. (NASDAQ:VRSN)’s price hikes were arbitrary and not done out of economic necessity. The group pointed out that VeriSign charges just $5.86 for the far less-used .net Domain name, even though both domains use the same infrastructure and have similar operational costs”.
Chief Executive Officer Jim Bidzos is quoted by Bloomberg as he addressed investors during a conference call on Friday saying, “we are extremely well positioned even without the pricing terms in the previous agreement,” and added, “we are still a growth company”. Meanwhile, some reports suggest that the new contract terms are just a piece of a pizza for ICA, whose intentions are to end the monopolistic status of VeriSign’s management of the .com and .net Domains reported CNN Money.
At the time of this writing, Verisign, Inc. (NASDAQ:VRSN) stock was trading at $34.32 per share, down $5.02, or a 12.75 percent decline from yesterday’s close.