01 August 2014

Network Solutions Answers the XYZ Question

The  Web.Com Group, Inc., which owns the domain name registrar Network Solutions, had its Q2 2014 Earnings Conference Call on July 31, 2014, beginning at 5:00 PM ET. Late into the call, THE QUESTION most of the domain name industry is interested in, was asked, and answered (sort of):

Question from Sameet Sinha - B. Riley Caris, Research Division: “… And my last question is around the .xyz domain. It seems like at least from media reports that you were giving it to your Network Solutions customers. Can you elaborate on what sort of promotion that is? Or what sort of any impact it could have? And what sort of benefit do you expect from it?”

Answer by David L. Brown - Chairman, Chief Executive Officer and President, Web.com Group, Inc. (owner of Network Solutions): “… And then finally on the xyz, we have a long history of offering domain names at very low price in order to attract customers. And then after a year with us, if they choose to renew, we have some additional revenue. And we've been testing this process for years. It has worked for us and allowed us to be very competitive in an extremely competitive and marginalized business. And so xyz could have been an example of that.”

Well yes, “free” is a “very low price.” However, it remains to be seen whether “they [customers] choose to renew” and whether Network Solutions will “have some additional revenue.” The real answer, therefore, will be coming about a year from now. [Earlier in the call, Kevin M. Carney, CFO, had mentioned a financial impact from "investments in new domain extension promotions."]

One other memorable note from the conference call: Web.com/Network Solutions said it doesn't view the Google Registrar business (now in beta) as a "competitive threat." OK. Anyone remember AltaVista?

For more on how Wall Street views the Google "competitive threat" to Web.com and Network Solutions, read: Web.com - Google's Announcement Triggers An Unavoidable Sell-Off - Web.com Group, Inc (NASDAQ:WWWW) | Seeking Alpha.

For more info (and sources for above): Q2 2014 Earnings of Web.Com Group, Inc. and Seeking Alpha

--report submitted by contributing editor, John Poole, Domain Mondo

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