Will Verisign Advertise or Embrace Investors? Or Page Predicts Registrations Could be Down in 2020.

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Verisign reported their quarterly results, the last before their projected price increases kick in. It looks like they will need the price increases.  The results are flattish to disappointing, and I don’t think that bodes well for the future unless they start marketing.  But marketing hurts margins, and every $.01 miss on earning punishes the stock, will they have the courage to spend on marketing? I hope so.  .COM is still the best global TLD.

Even though they “say” they expect the name base to to increase 2-4%, I don’t see how that is possible as the average duration of registrations shrinks.  Secondly, I think they renewal rates reported have the “*” that true numbers cant be shown until 45 days after the quarter, which hasn’t happened yet.

Lastly, their report shares that renewal rates are based on current market factors, in my mind that means estimates.

I predict the coming projected increase in domain name prices will dampen investor sentiment for new registrations and the registered names based will actually shrink in 2020… unless they finally realize they need to market .com and .net beyond registrar subsidies. I’ve always thought a similar effort like the NYSE or NASDAQ did with companies that list on those exchanges would reinforce their leadership position in .com.

I’ll even throw in free advice on the slogan,  use “Still the One” and the accompanying song.

But there is no pressure to act.  The renewals can drop and revenue stay the same or increase, because the price increase means they get 7% more revenue on existing registrations that renew.  And the stock buybacks keep the stock up…. until the inevitable drop in registrations kicks in, maybe 2022.

The huge number of short speculative one year registrations means investors are making up a larger percentage of registrations, with lower renewal rates.  Hopefully the need for better registration numbers will give us some $.99 deals around late march. I’m waiting and hoping.

  1. $750 million in excess cash flow this past year flowed to Verisign from the pockets of domain registrants and was used for stock buybacks with no productive economic purpose except to enrich executives and multi-billionaire, monopoly-loving Warren Buffett. This actually happens year after year. And now, with 7% increases on top of that existing goldmine, add another $100 million a year to Verisign’s pot. Their bank account spilleth over.

    So, instead of “Still the One” how about Pink Floyd’s “Money” as the theme song:

    Money, get away
    Get a good job with good pay and you’re okay
    Money, it’s a gas
    Grab that cash with both hands and make a stash
    New car, caviar, four star daydream
    Think I’ll buy me a football team
    Money, get back
    I’m all right Jack keep your hands off of my stack
    Money, it’s a hit
    Don’t give me that do goody good bullshit
    I’m in the high-fidelity first class traveling set
    And I think I need a Lear jet
    Money, it’s a crime
    Share it fairly but don’t take a slice of my pie
    Money, so they say
    Is the root of all evil today
    But if you ask for a raise it’s no surprise that they’re
    Giving none away, away, away

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