January 6, 2003 5:00 AM PST

VeriSign splits off domain registrar

It's back to the future for Network Solutions.

VeriSign has created a wholly owned subsidiary to operate a new version of the domain name business it bought three years ago. As part of the move, the company will revamp the Network Solutions brand, which has been downplayed since the VeriSign purchase.

The new Network Solutions subsidiary will comprise the registrar business, which sells domain names directly to consumers and businesses, as well as Web and e-mail services. The registry business, which sells domain names to other registrars, will remain with VeriSign. A little more than one-fifth of VeriSign's 3,000 employees will work for the Network Solutions subsidiary.

"It was time to make a division," said Champion Mitchell, the president of Network Solutions, which will operate separately from VeriSign. Network Solutions, which provided the first domain registration services in 1993, remains the largest seller of Web addresses, managing more than 9 million names.

There has been some speculation that VeriSign would spin off its domain businesses altogether after the number of available domain names on the Web began to decline and the company's government granted monopoly on Web address sales ran out. Mitchell did not rule out the possibility of a sale, but he said that for the past year, the company has been focusing on a turnaround and will continue to do so in the future.

As part of the plan, Network Solutions is introducing new Web services packages for small and medium-sized businesses, revamping its Web site, opening a new customer service center and launching a mileage program with four major airlines.

VeriSign has traveled a rocky road in recent years, suffering from massive job cuts, net losses, shoddy customers service and charges that its marketing tactics were too aggressive.

Mitchell, who joined the company in late 2001, said VeriSign's domain name business hadn't adjusted to the fact that it had to compete in the marketplace for domain name sales after its monopoly contract expired. "There were a lot of people who had not gotten over the monopoly mentality," Mitchell said. "Those people are no longer with us."

As part of the announcement, Network Solutions introduced Web services packages including one that will allow customers to build a five-page Web business with two e-mail boxes for about $9 per month. It's also implementing a 30-day trial period that lets customers build a Web site before buying it. And the company is offering 1,000 frequent-flier miles on Delta Air Lines, United Airlines, American Airlines, and US Airways to customers who register a new domain name, renew or transfer an existing one, or sign up for its new Web site services.

In the future, Mitchell said he plans to focus on untapped markets for domain names. The company is working on promotional partnerships with other businesses besides airlines, including office-supply companies and wholesale warehouses.

 

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