Back In February we told you that Warren Buffets’s Berkshire Hathaway purchased 3,685,700 shares of Verisign (VRSN) which at the time of acquisition represented an investment of around $165 Million dollars.
Today according to Cnbc.com, Berkshire Hathaway added another 4.49 million shares last quarter and now owns 5.35% of VeriSign.
“”While the introduction of a new category of “top level domains” (such as .aero for aviation businesses or .mobi for mobile websites) does increase the competition faced by VeriSign, the new naming options aren’t likely to steal share from the dot-com domains. ”
“Instead, firms are likely to just register both names.”
“VeriSign’s exclusive contracts with ICANN offer an attractive economic moat for the firm.
“Because increases in registration fees are built into those contracts, VeriSign will be able to generate attractive growth over the course of the next several years without needing to work for it.”
The reporter for CNBC.com doesn’t seem to understand what is going to happen in the new gTLD program and certainly we can and have debated what the effect of the new gTLD program will be on existing domain names for years now.
The reporters statement that attempts to summarize the threat from new gTLD’s to Verisign’s as “firms are likely to just register both names.” shows a great lack of knowledge on the subject.
Moreover Verisign no longer has that guaranteed rate increase and that part of the story is just wrong.