Newsmaker: Who says there are no second acts?

Network Solutions, which used to run the Internet, now wants to sell your homemade cheese.

It's a strange fate for a brand that used to represent the government-designated domain name monopolist, but Network Solutions CEO Champ Mitchell says helping small-business owners build up a Web presence is high-growth industry that has his company turning a profit.

For years, Network Solutions presided without competition over the domain name system, maintaining the Internet's most important servers, administering the .com, .net and .org registries and acting as the sole registrar for those domain names. Now, following the company's March 2000 acquisition and October 2003 sale by VeriSign, Mitchell illustrates his business model with the story of two women in Wisconsin who used Network Solutions services to turn their homemade cheese stand into a multimillion-dollar online store.

To some close to the company, Network Solutions' trajectory recalls one-time high-flying brands that suffered hard landings after the Internet bubble. But Mitchell, a Vietnam veteran and former tobacco industry executive, is having none of that. He says there's nothing lowly about the small-business market. What's more, Mitchell maintains that improvements in local search have made an online presence imperative for small businesses, whether they're selling locally or globally. He recently spoke with CNET News.com about where he wants to take the business.

What's left of the company? We're all familiar with Network Solutions that had control over the Domain Name System, but that's clearly not the business you're in now.
Mitchell: We have several hundred thousand domain-centric buyers who are very important to us, who buy mostly domain names. We work very hard to try to keep them happy and to service them, but the growth in our business is not in the domain name business at all. And we are a growing business, which we weren't when we were spun out; we were a constricting, declining business.

We are the small-business experts online. We have in our customer base of about 4 million customers, over three-and-a-half million small businesses. To put that in perspective, that's a larger small business base than some offline giants like American Express small business have.

So what services are you providing with these small businesses, apart from domain names?
Mitchell: The domain name to us and to the small-business person is nothing but an activating device and an address. What we really provide to these folks is services online to help them move their business forward and to make their lives easier as small businesspeople.

In the United States today, the fastest growing segment online is small business, and that is because of search. We have today about 7.6 million small businesses online. Close to half of those are our customers. I think the most exciting part is that in the next 12 months, we'll add 2.6 (million) to 2.7 million more small businesses online.

Because of local search, small businesses have come to realize that they need to be found online. So the first thing they come to us for is a Web Presence Package, which generally includes a Web site, e-mail, a domain name as the activating device and their address--and frequently some additional features, perhaps private registration. But the main thing they come to us for is the presence, which gives them an identity online.

Of those three-and-a-half million small-business customers of yours, how many are just using you for domain name registration?
Mitchell: Probably 60 percent don't have a major value-added service. We have more than tripled the percentage of our business that comes from nondomain services that fall into this core group of small-business services, and that's in the last 18 months.

I hear you're not doing quite as well with the domain names themselves, Tucows is evidently beating you out in that sector.
Mitchell: No, Tucows is not beating us down. I think you may be mistaking them for Go Daddy.

OK, is Go Daddy beating you?
Mitchell: We have maintained our domain base, to everyone's surprise, at 7.3 (million) to 7.4 million domains under management. Go Daddy does have a larger number than that. They have probably a little over 8 million. Tucows is much under that. We are, as you can tell, slightly behind Go Daddy in total domains under management, and the rest of them are trailing both of us by a considerable number, by millions of domains.

But of course, you know, Go Daddy sells at an extremely low price point, and they do that to sell their software. They're really a software provider. They build their own software and use the domain as an acquisition device for customers. They don't have nearly the number of customers that we do. They have lots of people who buy lots of domains--in other words, tech folks who own lots of domains because they're the people who buy their software.

So while they have more domains under management than we do, they have only a fraction of our customer base. We have by far the largest customer base in the industry, and that's why I said nobody is beating us out.

What you want to have is the small business customer. We have a customer--two women who live on a farm in Wisconsin--and they

More Newsmakers

Their customer service

He's right that their customer service used to be really bad.

Sounds like he's moving the company in a good direction now.

Welcome to Reality

Network Solutions had a monopoly and charged accordingly. The company doe snot have the customer base due to the fact that comapanies like GoDaddy.com and DomainPet.com are charging less. If the product was lesser quality or the customer service was not there it would be a different story, even with the lesser price. The fact that these companies are offering improved CS and products at a lower price is the winning recipe. His response that GoDaddy has less customers that purchase more domains and that their main product and focus is on the software is rediculous. Only the future can tell the outcome but I don't see Network Solutions gaining the customer base, through Small Business or otherwise. It was fun reading but not reality....

Network Solutions' SMOKE AND MIRRORS

I first became acquainted with Network Solutions when they were a minor division of Science Applications International Corporation (SAIC) where I worked for several years.

SAIC saw the "irrational exuberance" of the market in about 1998 and took Network Solutions public (at $13 per share). They sold the stock and made several billion dollars, an obscene profit for a division they only paid about $5 million for just a few years before. It was, undoubtedly, one of the best deals EVER in computing, probably second only to the price Bill Gates paid for the CP/M clone (he paid $50,000) later marketed as MS/DOS and PC/DOS (he sold copies for $50 each on every PC ever made before Windows!)

Verisign, the biggest suckers EVER, paid some 16 - 21 billion for Network Solutions, wrote it down by about $10 billion after they realized they had been 'had', and is now a much smaller and humbled company.

When their stock tanked to about 1% of its' former value, they had to dump Network Solutions and did so for $60 million in cash, a $40 million note and a retention of 15% of the stock. BUT, they retained the top level domain registration for the .com and .net domain, the real gem of the company.

So, what they sold, was the customer facing, retail end of the business, in competition with Tucows, GoDaddy, and a host of other small, very nimble and tenacious companies.

Network Solutions has only one great asset, the name, and one other asset, customers DUMB ENOUGH to stay with them and pay inflated fees for service available anywhere.

Today, Network Solutions misleads customers, tells lies about both themselves and their competition, and will try to fool unsuspecting customers into believing they are stil the authority on .com and .net registrations.

Truth be told, they play second fiddle to GoDaddy.com (over 20% behind them) and other firms. They neither innovate nor do they create. They are now in a struggle to retain customer base, and I believe they will not be successful.

Look for GoDaddy or Tucows to purchase their list when they hit bottom in a few years.

[twhiting9276]

Hillarious!

Years ago, Network solutions sold domains @ $50+, because they were it in the business. Now, they sell them @ $35 with no hosting and wonder why people take their business elsewhere?

It's time for these people to wake up and see what they're doing as what it is, ripping people off. Not only are they ripping them off, but they're refusing to support them as well. No matter what is said, the support behind netsol flat out just sucks, STILL, today.

"But of course, you know, Go Daddy sells at an extremely low price point, and they do that to sell their software. They're really a software provider. They build their own software and use the domain as an acquisition device for customers. They don't have nearly the number of customers that we do. They have lots of people who buy lots of domains--in other words, tech folks who own lots of domains because they're the people who buy their software."

I find this absolutely humorous. As a small business owner, AND a godaddy customer, I know just what drives people to GoDaddy. Not the "software" (though, the software is decent), but the fact that the pricing is unbelievably great. I mean, come on, $9 / year for a domain? Whereas, with NetSol, you end up paying almost 4x that price?

Network Solutions is trying to copy GoDaddy, that's all. They complain because they're trying to pimp software, yet that's exactly what NetSol is trying to do, pimp their own software, and services. Unfortunately, their prices are , yet again, unrealistic, in the current market.

Let's face it, NetSol is using an old, outdated model. They STILL think they have the monopoly, when clearly they have anything but. In fact, they're losing more and more customers daily (not gaining, as they would have you believe) because of the fact that they can not adapt to the internet and advertising required.

Give 'em a couple years, they'll either wise up, and quit ripping people off pricewise, or lose what few customers they have now.

[zebra_tech]

I used to agree with you, but now . . .

This is very well written and just about every word is true. Network Solutions was a train wreck of epic proportions. However, as hard as it is to forget their egregious transgressions of the past, my recent experience has been unbelievably good.

I manage over 3000 domain names. Because I pick up many of them via drop auctions I have been forced to manage domains at over 30 different registrars, including all the top ones. After years of doing this, I have come to a conclusion which shocks myself: Network Solutions has turned things around to now have the best registrar systems by far.

The Network Solutions transfer systems, which used to be horrific, are now the easiest by far (for .coms and .nets -- .infos aren't on board yet). Their policies are customer-first when it comes to security, ease-of-use, transfers, DNS management, etc.. Their online account management is amazing -- it lets me set up different accounts for different purposes and manage them together in one interface. I can give others access to some of my domains but not others so everybody has only one login but we don't see the same thing. It's awesome.

I don't have to call them for support much anymore since their systems have gotten so much better, but when I do call their VIP support line, I always get a real live human being instantly, and they are some of the most helpful and articulate phone reps I have dealt with at any company in any industry.

Most importantly, their prices aren't as high as advertised if you just ask. I am in the Network Solutions VIP program, which means $7.95 for transfers and frequent promotions for new registrations and renewals. And they don't charge the bogus ICANN fee that GoDaddy adds to every registration.

Finally, search is important to me, and I know on good authority that both Google and Overture pay attention to where your name is registered, as one indicator of site credibility. That's plenty more important than a few pennies here and there.

[apluscomputer]

NetSol's 'ole rules too cumbersome

I used to have many of my domains registered with Network Solutions. I tried to register or simply transfer a church's website over to my hosting servers whereas I would not even charge the church for anything not even hosting. To transfer the domain name an email had to be approved by the old domain administrator's email address. I informed Netsol that there was no more such email address for that person that used to run the churches website. So it was really impossible to get apporval for the changes from the old domain administrator since he died or something. Now I was also asked to send the owner of the Churches License, picture ID and comany letterhead requesting all domain transactions be handled through me. But that still was not good enough for Network Solutions. All in all this went on for three months and finally I gave up and created a whole new domain name for the church and registered it with Godaddy.com along with all the rest that I removed from Network Solution and other registrars as well. It's true that they used to have the monopoly on domain registrations, However, they do NOT now. They really need to take a good look at the public's opinions and capabilities and also understandings of technical Internet related areas and become a little more compassionate to the new domains administrators needs and comprehensions. They lost my vote and by them lowering their prices will not attract me into going back to them. I'll stay with Godaddy.com

[EcomTech]

Network Solutions Adds Monster Commerce To Their Overwhelming Mess

As previously stated to the point of ad nausium, Network solutions has overinflated pricing for their unsuspecting customers and now they have added Monster Commerce to this mess. I think that the choice for Monster Commerce in joining the Network solutions team is probably one of the worst made decisions on the part of a company such as Monster Commerce. What kind of signal does MC send out to their customers when most people truly do look at Network Solutions as a poor solution for their domain registration needs. Why would anyone that has experience in the Internet IT industry pay three times the amount for products and services when they can simply go to a GoDaddy or similar type service and pay $8 or less for a dot com name? Now, Monster Commerce, who is a shopping cart based company joins a team that overinflates pricing structures to maximize on the unsuspecting "newbie" to the industry.

Can we expect Monster Commerce pricing to go from the $99 they charge now to $199 in the future? Maybe. Maybe not immediately. But over time, watch Network solutions destroy yet another company by pricing them out of the industry. Maybe this will ultimately help other companies who compete with Monster Commerce like XCart and Paypal, especially when Paypal is basically free.

With the internal problems at both of these companies, it is not going to be easy for the two to get along. We will all have to wait and see. One thing is for sure... things are bound to change, and it is ultimately going to be costly for all.