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Network Solutions

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Network Solutions
Company typeLimited Liability Company
Industrydomain name registration
Founded1979
Headquarters
Herndon, VA
,
United States
Key people
W. Roy Dunbar - CEO
W.G. Champion (Champ) Mitchell - Chairman
ServicesWeb hosting, Web site design, e-commerce, search engine marketing, SSL Certificates, e-mail and domain name registration services
Revenue$63.9 million (est.)
Number of employees
900
ParentGeneral Atlantic
Websitewww.networksolutions.com

Network Solutions, LLC is a technology company which was founded in 1979. The domain name registration business has become the most important division of the company; as of 2006, Network Solutions manages more than 7.6 million domain names. Their size, founding status, and longevity have made them one of the most important corporations affecting domain name price and policy.

The Company

Network Solutions started as a technology consulting company in 1979,[1] with approximately 30 employees, and focused its efforts on applications development.

Network Solutions was acquired by Science Applications International Corporation (SAIC) in 1995 and listed on NASDAQ in 1997.

John Dillon reports in MediaFilter.org, "Initially, the service was subsidized by the government. But, in May 1993, the National Science Foundation privatized the name registry (InterNIC - Internet Network Information Center) and paid NSI $5.9 million to administer it. In September 1995, NSI instituted the fee system. A few months earlier, it had been bought out by Science Applications International Corp (SAIC)."

In 2000, Network Solutions was acquired by VeriSign, Inc. for $21 billion.[1]

In 2003, Network Solutions was acquired by Pivotal Equity Group.[1] The current CEO is Champ Mitchell.[citation needed]

In 2008, Roy Dunbar was appointed as the new CEO.[2]

On February 6, 2007, Network Solutions announced that General Atlantic, a private equity firm, entered into a definitive agreement to acquire Network Solutions from Najafi Companies (formerly Pivotal Private Equity). [3] Although terms of the deal were not released, the Wall Street Journal reported in a story on May 30, 2007 that the price tag was "around $800 million." [4]

In 2003 nearly 90% of the company's revenue was from domain-name registrations, said Network Solutions Chief Executive Champ Mitchell. Since 2005, the company has added 69 services and products and today these new offerings are fueling Network Solutions' growth. Now only 45% of the company's revenue comes from domain-name registrations.[1]

At the end of July, 2007, Network Solutions had 6,659,150 domains under management and was in the top five wholesale domain registrars following Go Daddy with 19,709,215 domains and eNom with 7,646,676 domains. Tucows, the largest publicly traded registrar, has 6,622,982 domains under management with its recent acquisition of ItsYourDomain.com.[2] Melbourne IT, a publicly traded company located in Australia, trailed with 4,664,019 domains under management. [3]

In addition to being a wholesale registrar, Network Solutions provides web services such as web hosting and website design.

Registry and Registrar business

In 1992, Network Solutions was the sole bidder on a grant from the National Science Foundation to develop the domain name registration service for the Internet. In 1993,[1] Network Solutions, Inc. (NSI) was granted an exclusive contract by the National Science Foundation (NSF) to be the sole Domain name registrar for .com, .net and .org Top Level Domain (TLD) names.[5] NSI also maintained the central database of assigned names called WHOIS. Network Solutions acted as a de facto registrar, selling names directly to end users.

In 1995, the National Science Foundation gave Network Solutions authority to charge for domain name registrations. Network Solutions charged $100 for two years registration was imposed on all domains; 30% of this revenue went to NSF to create an "Internet Intellectual Infrastructure Fund." [6] [7] [5] In 1997, a lawsuit was filed charging Network Solutions with antitrust violations with regards to domain names.[8] The 30% of the registration fee that went to the NSF was ruled by a court to be an illegal tax. [9] [10] This led to a reduction in the domain name registration fee to $70. [11] [12]

In the 1990s, Network Solutions implemented a policy of censoring domain names. This came to light when Jeff Gold attempted to register the domain name shitakemushrooms.com but was unable to. Further aggravating the controversy was the fact that while Network Solutions' automated screens blocked the registration of shitakemushrooms.com, the domain name shit.com had been successfully registered.[13] Network Solutions argued that it was within its First Amendment rights to block words it found offensive, even though it was operating pursuant to contract with a Federal agency NSF. [14] [5] [15]

Network Solutions' $100 charge, which many parties believed was excessive, in addition to its monopoly position in the market, was one of the contributing pressures that resulted in the creation of the International Ad Hoc Committee and its failed attempt to take control of the domain name system, and to the US Department of Commerce, NTIA releasing the White Paper and ultimately contracting with ICANN to administer the DNS.

With the formation of ICANN, the domain name industry opened up to partial competition, with NSIF retaining its monopoly on .com, .net and .org but having to recognize a separation of registry and registrar. By the end of 1999 the fee for registration had been reduced to a wholesale rate of $6 per year to registered resellers.

Controversy over Domain name front running

On January 8, 2008 Domain Name Wire published a story alleging that Network Solutions practices domain name front running.[16] "If you try to register a domain at Network Solutions, but decide not to register it, you won’t be able to register it anywhere else," the article says.[16] "Network Solutions registers the domain in its company name with the words 'This Domain is available at NetworkSolutions.com'."[16] Circle ID reported on January 8, 2008 that Jonathon Nevett, Vice President of Policy at Network Solutions and one of the seven members of the ICANN community who was consulted by the ICANN committee looking at domain tasting abuse,[17] had offered a response to the news story stating Network Solution's policy.[18] The policy was "a security measure to protect our customers," said Nevett.[18] "When a customer searches for an available domain name at our website, but decides not to purchase the name immediately after conducting the search," Nevett added, "after the search ends, we will put the domain name on reserve."[18] Nevett said that if the domain was "not purchased within 4 days, it will be released back to the registry and will be generally available for registration."[16] However, during the 4 day period the domain is still up for sale to the general public solely through Network Solutions and is not, in fact, reserved for a specific person at all.[citation needed]

Jay Westerdal, one of the seven members of the ICANN community who was consulted by the ICANN committee looking at domain tasting abuse,[17] published an article on Domain Tools on January 8, 2008 stating that Network Solutions is exposing the domains to domain tasters.[19] The domain tasters "will snipe those domain up milliseconds after Network Solutions deletes them," says Westerdal.[19] "It is a deplorable action that Network Solution would announce potential domain names to the entire world," Westerdal added.[19] On January 8, 2008, Tucows, the largest publicly traded domain name registrar, published an article on their company web site titled "Registrar Reputation and Trust" criticizing Network Solutions policy.[20] "Potential Registrants are effectively forced to purchase the domain from Network Solutions for a period of four days at which point the domain is dropped," wrote Tucows employee James Koole.[20] Koole says that Tucows has found a way to address the issue of domain tasting and have policies in place that uphold the rights of Registrants.[20] "Tucows works to prevent domain name tasting by charging our Resellers a monetary fee on domain name registrations that are cancelled within the five-day Add Grace Period (AGP)," Koole said.[20] "Tucows doesn’t use WHOIS query data or search data from our API to front-run domain names," Koole added.[20]

On January 9, 2008, Cnet reported that Network Solutions will soon not register domains when people search for domains from the company's Whois search page, will offer only an "under construction" page for sites that it has reserved, and newly reserved pages won't be linked to the numerical Internet addresses that allow Web browsers to locate the pages.[21] Network Solutions will continue to register domains when people search for domains from the company's home page.[21]

Citations

  1. ^ a b c d Company History | Network Solutions
  2. ^ W. Roy Dunbar Named CEO
  3. ^ "Network Solutions Announces Ownership Change". Businesswire. 2007-02-06. Retrieved 2007-02-07. {{cite news}}: Check date values in: |date= (help)
  4. ^ Wall Street Journal. "How Najafi Cos. Hit The Buyout Jackpot" by Pui-Wing Tam. May 30, 2007.
  5. ^ a b c Cybertelecom :: DNS history
  6. ^ FTC Staff Advisory Letter from David Medine to David Graves, Netsol (Aug. 21, 1997)
  7. ^ Domain Name Solution Causes New Problems, IEEE Computer Oct. 1999
  8. ^ Network Solutions sued for domain-name antitrust, Sunworld April 1997
  9. ^ Thomas v Network Solutions and NSF, Civ. No. 97-2412 (TFH) (Apr 3, 1998) copy from CourtTV
  10. ^ Judge rules domain fees illegal, CNET April 9, 1998
  11. ^ How to Get Your Own Domain Name, PCWorld.com (June 8, 2000) archived at CNN
  12. ^ Domain fees lowered, CNET (Mar 16, 1998)
  13. ^ Food domain found "obscene", CNET (Apr. 27, 1998)
  14. ^ NSI lets a bad word slip, CNET (Feb. 23, 1999)
  15. ^ Censorship shock: no porn allowed on net, The Sunday Times (Oct. 22, 2006)
  16. ^ a b c d Domain Name Wire. "Network Solutions Faces PR Nightmare Over Domain FrontRunning" January 8, 2008.
  17. ^ a b ICANN. "SAC 022 SSAC Advisory on Domain Name Front Running" (Page 10). October, 2007.
  18. ^ a b c Circle ID. "Network Solutions Responds to Front Running Accusations" by CircleID Reporter. January 8, 2008.
  19. ^ a b c Domain Tools. "Network Solutions steals domain ideas; Confirmed!" by Jay Westerdal. January 8, 2008.
  20. ^ a b c d e Tucows. "Registrar Reputation and Trust" by James Koole. January 8, 2008.
  21. ^ a b Cnet. "Network Solutions amends Net registration process" by Stephen Shankland. January 9, 2008.

See also

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