Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: SMALL FRY who wrote (35996)	4/23/1999 9:29:00 AM
From: ayahuasca	Read Replies (1) \| Respond to of 120523

Monopoly Crumbling or Blessing In Disguise? (NASDAQ: NSOL) April 23, 1999 by Jeffrey Howes ------------------------------------------------------------------------ Shares of Herndon, VA based Network Solutions Inc. have been battered lately over fears of competition entering the Internet name registering business. On April 25th, five other 'test bed' companies, AOL, France Telecom's Oleane, the Internet Counsel of Registrars, Melbourne IT and Register.com, will begin offering domain name registrations, with 28 others to join in late June. What does this mean for NSOL? Investor fears of competition driving down rates and cutting NSOL profits had hammered the stock down to $59 a share, from a recent high of $153. On April 21st, as news was released on the arrangement the stock rebounded to $92. Is it possible that these events are, in fact, not bad news at all for NSOL? That's what Prudential analysts are concluding as they, right in the face of the competition rumors, raise their target price to $188 from $125 saying that NSOL shares "have been unfairly pushed around" by inaccurate media reports and short sellers. Under the new arrangement, Network Solutions will still maintain the only database of Internet domain names. Other companies will pay NSOL a one time fee of $10,000, and $9 per year per domain name registered. Although much less than their current $35 direct price, there are also fewer costs associated with the 'wholesale' registrations. The large customer service related expenses for resold registrations would be shifted to the registering companies, essentially reducing NSOL's cost-of-goods to a tiny automated entry on a DNS server. Also overlooked, sales of new domain names are expected to increase dramatically as the new players in the registering business, like America Online, leverage their existing marketing infrastructure to promote 'vanity' name registrations. Network solutions will continue to collect it's $9 per year per name on each and every of these registrations, regardless of who sells it, and without a penny in sales costs. That doesn't sound like such a bad deal after all, does it? Should it be a surprise that Network Solutions insiders are rumored to be grabbing up all the shares they can get their hands on at current prices? Want to learn more about the real Internet economy? We suggest reading Accidental Empires : How the Boys of Silicon Valley Make Their Millions, one of the most insightful books into the amazing world of technology.