Internet Registrar Seeks New Identity

Network Solutions, known as the Internet registrar, is expanding into integration, electronic commerce and directory services

Ask the management of Network Solutions Inc. what matters in today's Internet marketplace and its reply sounds something like the old real estate adage, "location, location, location." That's because the company, which is best known for its role as the domain-name provider, today conducts business at the center of the Internet industry.


"We're ideally situated," said Donald Telage, president and COO of Network Solutions. "Everyone on the Internet needs an Internet protocol address and space." The Herndon, Va., company since 1993 has had the exclusive contract with the National Science Foundation to register domain names -- that is the word before .com, .org, .mil, .edu or .net in an Internet address.


In the coming year, Network Solutions plans to leverage its position to become a dominant player in network integration, directory services and electronic commerce. To meet that goal, the company last week formed the first of what is expected to be a series of new partnerships. The alliance is with VeriSign Inc., San Francisco, a digital authentication company. Network Solutions will begin in the fall to offer domain-name applicants the option of getting both a registration and a secure digital ID at the same time. "The cooperative effort between Network Solutions and VeriSign will help establish the infrastructure needed to accelerate the usage of electronic commerce on a global basis," said Stratton Sclavos, president of VeriSign.

The domain-name explosion came somewhat as a surprise to San Diego-based Science Applications International Inc., which acquired Network Solutions in March 1995. SAIC didn't go after the company for the Internet registry, but has found it gives the company instant access to every Internet player.

"All of a sudden this registration business started to grow," said Telage. "We couldn't ask the NSF to wait to create a new body of law. We had to make registrations happen in a day."

That's made life interesting for David Graves, Internet business manager at the company, who focuses on the many lawsuits surrounding trademark issues on Internet domain names. Only four suits have been filed against Network Solutions, and of those, two alleged wrongdoing by the company.

For an area without precedent, that's a good record. Network Solutions' policy is to stay out of disputes and to remain neutral whenever possible.

"We saw ourselves being caught in the middle of a new frontier of law," said Graves. "We don't want to take on the role of judge and jury."

Today, Network Solutions has an advantage no other Internet company can match: Every individual and company must first go through them to get on-line. Many customers might not even know it: Internet access providers give individual account holders their own domain name to use, such as digex.com or netcom.com.

Telage sees the Internet market as a wheel. The Bell companies and AT&T are around the rim, he said. The access providers occupy another circle. Content providers and electronic commerce companies have their own realms. Network Solutions, Telage said, sits in the middle, ready to be the cornerstone of connection. That means the company will move beyond just offering names, and that a flurry of alliances are to be expected.

Several reseller agreements are in negotiations, said Telage. Network Solutions is also in partnership talks with two of the largest Internet companies, he said. A European alliance is also in the works he said. "The Internet is not a U.S.-centric market. We are trying to think globally."

Network Solutions also plans to introduce next month a new Internet directory service, developed by Scott Williamson, vice president of directory services for the company, who also created the popular "WhoIs" technology that acts as a domain-name white pages directory. Williamson said the technology is ready, but now they are setting up equipment to handle an enormous number of people. WhoIs had 31 million hits in June.

About six months ago, Network Solutions started offering Internet consulting to Fortune 100 and global companies. Analysis includes evaluation of entire networks and advising on how to use Internet protocol solutions. "We will be pioneers in this business," claimed Telage.

The company is targeting several of its new efforts toward Internet service providers, who must get their Internet protocol number allocation from Network Solutions before they do business. "ISPs need help. They need tools. We see our role as supporting their job," said Telage. In August, the company plans to start selling Internet service providers a Web-based server that will offer faster access for the providers' customers.

Network Solutions allots certain amounts of space to each Internet service provider applicant. Telage said he sometimes asks for revised plans when a company asks for too much space or doesn't seem to have a solid structure for offering Internet service. That, along with charging companies for domain-name registration, is what gets Network Solutions on companies' bad side. "Our service often requires us not to be in a popular role," said Chuck Gomes, Internet program manager at Network Solutions.

The company came under fire in September when it started charging $50 to register a name, and again this summer when it deleted more than 9,000 users with delinquent accounts. Yet another controversy arose when the company accidentally disconnected Microsoft during that purge.

Out of 441,000 domain names, more than 9,000 were removed for delinquent fees. Few of those have called the company to pay and get their service re-installed. "Collectibility remains a problem," said Robert J. Korzeniewski, the company's chief financial officer. "You'd think we'd be like the phone company."

While Network Solutions charges $50 a year for a name, it gives $15 of that fee to an interest-bearing account that will be used for future Internet investment. The National Science Foundation, which made that a stipulation of the deal, is expected to decide what projects will receive the money.

However, even if the NSF chooses another company to take over when the domain-name registry contract ends in 1998, by then Network Solutions will have likely made its own name in Internet access, networking and commerce.


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