When Network Solutions relinquished its exclusive hold on the Internet's domain-name registry, the company's stock took a dramatic turn.
Shares in Network Solutions, which had been sliding throughout April in anticipation of the change, bottomed out at US$60 on Tuesday. Once the market got wind of who the new players were and how much they'd paid to work with Network Solutions, the stock rebounded dramatically on Wednesday, trading as high as $90.
Obviously, Wall Street likes what it sees. Aside from that, the business of Internet name registration appears to have encountered a lull.
"Who cares? Big deal," said Zona Research analyst Jim Balderston. "It's a registration service."
Balderston sees it as a flat-fee service business that doesn't represent much in the way of a sexy, new Net business opportunity.
"If you have high volume, a flat fee can be fine if you've got a lot of people registering." Otherwise, Balderston expects little change. Domain-name registration is "settling into normal," he said. "But we don't see the sky falling, or going back up again."
On Wednesday, the Internet Corporation for Assigned Names and Numbers named the five "test bed" companies that will compete with Network Solutions for domain-name registration. Among them is America Online, which comes as something of a surprise.
"Any time you give anybody a monopoly you're going to have a problem. Something had to give here," said Mike LeConey, an Internet analyst at Security Capital Trading.
LeConey said that it's tough to guess the market that will come out of it. A determining factor may be the final wholesale price for new registrars, now set at $9 per name until the US Department of Commerce and Network Solutions settle on a permanent rate. They were unable to reach an agreement in time for Wednesday's announcement.
"The prices currently are ridiculous," LeConey said. "If there's going to be real competition, they're going to have to lower it."
