http://www.domainnews.com/registries/2007110519/verisign-reports-third-quarter-results/

Operating margin climbs to 23.4%  ..  Wait till Q4 when the price increase hits.. It’s great how monopolies can fatten their margins simply by raising prices.  Eventually said price increases are going to start hitting renewal rates on longtail tasting portfolios..  Between 2004 and 2007 much of the growth in “kept” domain registrations came from the “keep rates” associated with large scale commercial-registrant domain tasting. Verisign is already getting the lions share of revenues associated with tasting through it’s $6.42 .com name-shell cost..  ICANN fees take the registration closer to $7 per year then there’s your registrars margin, hosting and you see where this is going…

Before you cheer that there will be a flood of new name alternatives as previously hoarded names expire, consider: Many of these tasting portfolios contain names “nobody” would ever register as a standalone..  They are only good for marginal traffic aggregation.. typos and names which don’t have meaning but which get some traffic..  there are literally millions of these reg’d..  and many of those names only make the commercial registrant $7-8 per year in traffic revenue.  So what happens is, the taster gets a thinner and thinner margin, ultimately letting the name es-cheat back to the available pool.. and Verisign will (at some point) look like it’s loosing names.

   This probably wouldn’t have happened but the Verisign price increase in October, lower pay effective pay-rates for domain publishers at Google and greater aggressiveness by savvy IP counsel are a trifecta that will see the river of deletions intensifying next year..  If Verisign keeps raising prices,  and the economy toughens some more (again affecting pay-rates), the river will turn into Niagara Falls.