Where does all the money go?

[mai]

We buy so many domains and most registrars make a few bucks off each, but where does the rest of the money go? Does ICANN just store it in a big bank, or is all the money actually being used for something?

I've wondered this question for ages, and Google failed to answer it. Does anybody know where the money goes?

 

[Riceman]

In the case of com and net it goes to verisign. 6.00 goes directly to them. The real money is made by them

 

[mai]

Interesting.

So what does Verisign do with all the cash? I'd imagine they have quite a few billionares...

 

[d0mainguru]

Verisign have to pay for all the servers etc, but i guess they make a few pound.

!

 

[ezimedia]

HI

Yes a very interesting question, would love to know the answer also, I never really thought about it before now,

Thanks
Tom Dahne

Expired Domain Software
http://www.expireddomainsoftware.com

 

[mai]

In compairison to the income they make, servers are dirt cheap! But it would be nice to know they're doing something good with the profit, like stop world hunger, rather than buy porno stock :p

Hmm...

 

[RJ]

Originally posted by mai
So what does Verisign do with all the cash? I'd imagine they have quite a few billionares...

They're a public company, so a lot of what they do with their profits is available.

http://www.verisign.com/corporate/investor/index.html
http://www.verisign.com/corporate/investor/annualreports.html

 

[mai]

Thanks for the links,

I've never felt such eye-strain in my life lol. My brain's in safe mode and I feel like I've just read a 20-page Terms of Service statement.

It appears that they blow a lot of money for "the goodwill of the workforce." They seem to have a large amount of offices on a global scale and throw in quite a lot of money for development.

Nevertheless, I'm still lost, but I guess that was their purpose.

 

[Peter]

Originally posted by mai
In compairison to the income they make, servers are dirt cheap! But it would be nice to know they're doing something good with the profit, like stop world hunger, rather than buy porno stock :p

Hmm...

servers maybe cheap on the scale you or I use them but verisign will need much bigger and much better servers as well as bandwidth

 

[armstrong]

Doesn't Verisign have to pay ICANN a certain fee per domain, as well? I imagine its a significant cut.

 

[.edu]

I believe a portion would go to the stockholders/investors

 

[Raf]

Wow this is an excellent question, thanks for asking it however.

 

[Wilfredo]

Yeah great topic.

 

[painperdu]

Back in the day, the US government footed the bill for maintaining the small but expontially growing Internet. They did this by contracting with the University of California, Los Angeles to do the actual maintenance. It was at this point that by the hands (brains?) of then UCLA graduate student Jon Postel invented the Domain Name System (up till the moment he devised the DNS, Postel kept track of which IP addresses led to which computers on a few pieces of loose-leaf paper!).

With the new DNS in place, the National Science Foundation (the US government entity that contracted to UCLA) sought to rid itself of the growing function ($$) of maintaining the DNS. They reasoned that a for-profit enity could better care for the costs of maintaing the DNS, so they sent out proposal requests. The winning bid came from a then small start-up headed by a former ARPANET(I think?) contractor. This small start-up was . . .Network Solutions!

Actually, Network Solutions was already doing the work for the NSF but when the time came to privatize the maintenace of the DNS NetSol was in a good position to win over others. The time came when the US under Clinton charged the Department of Commerce with the mission to fully commercialise the DNS.

This mission resulted in the forming of The Internet Corporation for Assigned Names and Numbers (ICANN).

So, let's cut this story short. NetSol (VeriSign) and other various ICANN sanctioned DNS registries are granted contracts by ICANN to run their respective TLD root servers. In turn, ICANN does recieve certain administrative fees while other fees collected per every name registered goes to the maintenance of a registries' respective DNS root server; what ever is left over is profit for the respective registries.

My, I didn't mean for this to take so long but the story is much longer than this.

One of the most fascinating aspects to this whole mess of a story is how Jon Postel as a lone grad student at UCLA was at the very root (hehe) of it all. At one point in the history of the DNS there was this one man with a pencil and paper . . .

 

[mai]

Fascinating!

Now, set aside the profit made by the registrars; let's use RegisterFly as an example. By charging $9.99 for a common TLD, they recieve $3.99 and pay for their servers, as well as make a fortune. With that deducted from the cost, we come to $6.00, which apparently goes to Verisign for .coms and .nets.

With this $6.00 figure in abundance, they pay for the highly-secure and capable servers, as well as the cost for maintaining them. Surely they make MORE than enough to support the cost of the servers, even if they are outrageously expensive.

Now how much does Verisign make per year? And besides paying for server maintanenence, WHAT do they do with the rest? Is Jon Postel this really rich guy who's sucking all the money for himself?

Sorry for slamming you with the questions, I'm just so curious :D

 

[painperdu]

I think the registrar has to pay $4 to the registry for each name, so it is the registry that gets a flat fee. I know there's a paper some where on the net that spells out exactly what the registry can charge per name as well as intial setup costs and such -this is very much regulated by the ICANN.

The registrar can charge whatever it feels the market will support.

Jon Postel passed away in '98 http://www.isoc.org/postel/

I don't think he made any vast amount of money from his work. He looked like he was a hippie: http://www.postel.org/postel.html

 

[Grrilla]

Painperdu,
Damn interesting stuff! TX for laying it out like that. Gonna follow up the links you have given.

 

[mdurrant]

Originally posted by mai
With this $6.00 figure in abundance, they pay for the highly-secure and capable servers, as well as the cost for maintaining them. Surely they make MORE than enough to support the cost of the servers, even if they are outrageously expensive.

Now how much does Verisign make per year? And besides paying for server maintanenence, WHAT do they do with the rest? Is Jon Postel this really rich guy who's sucking all the money for himself?

Their server costs are most likely in the many millions of dollars per month. There's also not one single man sitting behind a desk with an open cash register. Just like any large company, I imagine they have thousands of employees across the world.

Sure, there are executives who make millions off the company, but I assume most of the revenue is sent to investors, server fees, salaries, and a corporate war chest.

I don't know actual figures, but I can assure you companies like Walmart, Microsoft, are making several multiples of more money then Verisign, so it's probably not a mind-boggling number.

 

[mai]

Thanks for the replies everyone,

I'm satisfied