Summary: VeriSign announced the U.S. government approved a contract extending its lucrative management over ".com" internet domain names until 2012. The stock jumped 7.5% on the news. VeriSign's deal with ICANN (Internet Corporation for Assigned Names and Numbers), which required Federal approval, permits the company to raise its pricing by up to 7% for 4 of the next 6 years. The U.S. Commerce Dept. decision had been delayed almost a year following criticism from VeriSign competitors. As manager of the .com registry, VeriSign translates the words in an internet address into numbers that a server understands. Other domain name registrars pay VeriSign a fee for this service. A CIBC analyst says the VeriSign price increases will mean "an additional 10 cents in 2008 earnings, potentially growing to 94 cents, additive, in 2012."
Related links: Press release Media coverage: Reuters, Internet News. Commentary: RBC Upgrades Verisign After Jamba Sale, VeriSign's News Corp. Deal Signifies Renewed Focus - But Big Challenges Remain, 9 Reasons Why I'm Short Verisign (NASDAQ:VRSN) . Conference call transcripts: VeriSign Q3 2006 .
Potentially impacted stocks and ETFs: Verisign (VRSN) • Competitors: Web.com Inc (NASDAQ:WWWW), 24/7 (TFSM) • ETFs: First Trust Dow Jones Internet Index (NYSEARCA:FDN), Internet Infrastructure HOLDRs (NYSE:IIH)
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